[Congressional Record Volume 144, Number 139 (Wednesday, October 7, 1998)]
[House]
[Pages H9954-H9985]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      CONFERENE REPORT ON H.R. 3150, BANKRUPTCY REFORM ACT OF 1998

  Mr. GEKAS submitted the following conference report and statement on 
the bill (H.R. 3150) to amend title 11 of the United States Code, and 
for other purposes:

                  Conference Report (H. Rept. 105-794)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     3150), to amend title 11 of the United States Code, and for 
     other purposes, having met, after full and free conference, 
     have agreed to recommend and do recommend to their respective 
     Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Bankruptcy 
     Reform Act of 1998''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                TITLE I--CONSUMER BANKRUPTCY PROVISIONS

                   Subtitle A--Needs based bankruptcy

Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.

              Subtitle B--Consumer Bankruptcy Protections

Sec. 105. Definitions.
Sec. 106. Disclosures.
Sec. 107. Debtor's bill of rights.
Sec. 108. Enforcement.
Sec. 109. Sense of the congress.
Sec. 110. Discouraging abuse reaffirmation practices.
Sec. 111. Promotion alternative dispute resolution.
Sec. 112. Enhanced disclosure for credit extensions secured by a 
              dwelling.
Sec. 113. Dual use debit card.
Sec. 114. Enhanced disclosures under an open-end credit plan.
Sec. 115. Protection of savings earmarked for the postsecondary 
              education of children.
Sec. 116. Effect of discharge.
Sec. 117. Automatic stay.
Sec. 118. Reinforce the fresh start.
Sec. 119. Discouraging bad faith repeat filings.
Sec. 120. Curbing abusive filings.
Sec. 121. Debtor retention of personal property security.
Sec. 122. Relief from the automatic stay when the debtor does not 
              complete intended surrender of consumer debt collateral.
Sec. 123. Giving secured creditors fair treatment in chapter 13.
Sec. 124. Restraining abusive purchases on secured credit.
Sec. 125. Fair valuation of collateral.
Sec. 126. Exemptions.
Sec. 127. Limitation.
Sec. 128. Rolling stock equipment.
Sec. 129. Discharge under chapter 13.
Sec. 130. Bankruptcy judgeships.
Sec. 131. Additional amendments to title 11, United States code.
Sec. 132. Amendment to section 1325 of title 11, United States code.
Sec. 133. Application of the codebtor stay only when the stay protects 
              the debtor.
Sec. 134. Adequate protection for investors.
Sec. 135. Limitation on luxury goods.
Sec. 136. Giving debtors the ability to keep leased personal property 
              by assumption.
Sec. 137. Adequate protection of lessors and purchase money secured 
              creditors.
Sec. 139. Automatic stay.
Sec. 140. Extend period between bankruptcy discharges.
Sec. 141. Definition of domestic support obligation.
Sec. 142. Priorities for claims for domestic support obligations.
Sec. 143. Requirements to obtain confirmation and discharge in cases 
              involving domestic support obligations.
Sec. 144. Exceptions to automatic stay in domestic support obligation 
              proceedings.
Sec. 145. Nondischargeability of certain debts for alimony, 
              maintenance, and support.
Sec. 146. Continued liability of property.
Sec. 147. Protection of domestic support claims against preferential 
              transfer motions.
Sec. 148. Definition of household goods and antiques.
Sec. 149. Nondischargeable debts.

                TITLE II--DISCOURAGING BANKRUPTCY ABUSE

Sec. 201. Reenactment of chapter 12.

[[Page H9955]]

Sec. 202. Meetings of creditors and equity security holders.
Sec. 203. Protection of retirement savings in bankruptcy.
Sec. 204. Protection of refinance of security interest.
Sec. 205. Executory contracts and unexpired leases.
Sec. 206. Creditors and equity security holders committees.
Sec. 207. Amendment to section 546 of title 11, United States code.
Sec. 208. Limitation.
Sec. 209. Amendment to section 330(a) of title 11, United States code.
Sec. 210. Postpetition disclosure and solicitation.
Sec. 211. Preferences.
Sec. 212. Venue of certain proceedings.
Sec. 213. Period for filing plan under chapter 11.
Sec. 214. Fees arising from certain ownership interests.
Sec. 215. Claims relating to insurance deposits in cases ancillary to 
              foreign proceedings.
Sec. 216. Defaults based on nonmonetary obligations.

           TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS

Sec. 301. Definition of disinterested person.
Sec. 302. Miscellaneous improvements.

             TITLE IV--SMALL BUSINESS BANKRUPTCY PROVISIONS

Sec. 401. Flexible rules for disclosure Statement and plan.
Sec. 402. Definitions.
Sec. 403. Standard form disclosure Statement and plan.
Sec. 404. Uniform national reporting requirements.
Sec. 405. Uniform reporting rules and forms for small business cases.
Sec. 406. Duties in small business cases.
Sec. 407. Plan filing and confirmation deadlines.
Sec. 408. Plan confirmation deadline.
Sec. 409. Prohibition against extension of time.
Sec. 410. Duties of the United States trustee.
Sec. 411. Scheduling conferences.
Sec. 412. Serial filer provisions.
Sec. 413. Expanded grounds for dismissal or conversion and appointment 
              of trustee.
Sec. 414. Study of operation of title 11 of the United States code with 
              respect to small businesses.
Sec. 415. Payment of interest.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.

              TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM

Sec. 601. Creditor representation at first meeting of creditors.
Sec. 602. Audit procedures.
Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 604. Dismissal for failure to timely file schedules or provide 
              required information.
Sec. 605. Adequate time to prepare for hearing on confirmation of the 
              plan.
Sec. 606. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the 
              Federal rules of bankruptcy procedure.
Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy 
              cases.
Sec. 609. Study of bankruptcy impact of credit extended to dependent 
              students.
Sec. 610. Prompt relief from stay in individual cases.
Sec. 611. Stopping abusive conversions from chapter 13.

                       TITLE VII--BANKRUPTCY DATA

Sec. 701. Improved bankruptcy statistics.
Sec. 702. Uniform rules for the collection of bankruptcy data.
Sec. 703. Sense of the Congress regarding availability of bankruptcy 
              data.

                 TITLE VIII--BANKRUPTCY TAX PROVISIONS

Sec. 801. Treatment of certain liens.
Sec. 802. Effective notice to government.
Sec. 803. Notice of request for a determination of taxes.
Sec. 804. Rate of interest on tax claims.
Sec. 805. Tolling of priority of tax claim time periods.
Sec. 806. Priority property taxes incurred.
Sec. 807. Chapter 13 discharge of fraudulent and other taxes.
Sec. 808. Chapter 11 discharge of fraudulent taxes.
Sec. 809. Stay of tax proceedings.
Sec. 810. Periodic payment of taxes in chapter 11 cases.
Sec. 811. Avoidance of statutory tax liens prohibited.
Sec. 812. Payment of taxes in the conduct of business.
Sec. 813. Tardily filed priority tax claims.
Sec. 814. Income tax returns prepared by tax authorities.
Sec. 815. Discharge of the estate's liability for unpaid taxes.
Sec. 816. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 817. Standards for tax disclosure.
Sec. 818. Setoff of tax refunds.

            TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 901. Amendment to add chapter 15 to title 11, United States code.
Sec. 902. Amendments to other chapters in title 11, United States code.

                 TITLE X--FINANCIAL CONTRACT PROVISIONS

Sec. 1001. Treatment of certain agreements by conservators or --
              receivers of insured depository institutions.
Sec. 1002. Authority of the corporation with respect to failed and 
              failing institutions.
Sec. 1003. Amendments relating to transfers of qualified financial 
              contracts.
Sec. 1004. Amendments relating to disaffirmance or repudiation of 
              qualified financial contracts.
Sec. 1005. Clarifying amendment relating to master agreements.
Sec. 1006. Federal deposit insurance corporation improvement act of 
              1991.
Sec. 1007. Bankruptcy code amendments.
Sec. 1008. Recordkeeping requirements.
Sec. 1009. Exemptions from contemporaneous execution ---requirement.
Sec. 1010. Damage measure.
Sec. 1011. SIPC stay.
Sec. 1012. Asset-backed securitizations.
Sec. 1013. Federal reserve collateral requirements.
Sec. 1014. Severability; effective date; application of ---amendments.

                    TITLE XI--TECHNICAL CORRECTIONS

Sec. 1101. Definitions.
Sec. 1102. Adjustment of dollar amounts.
Sec. 1103. Extension of time.
Sec. 1104. Technical amendments.
Sec. 1105. Penalty for persons who negligently or fraudulently prepare 
              bankruptcy petitions.
Sec. 1106. Limitation on compensation of professional persons.
Sec. 1107. Special tax provisions.
Sec. 1108. Effect of conversion.
Sec. 1109. Amendment to table of sections.
Sec. 1110. Allowance of administrative expenses.
Sec. 1111. Priorities.
Sec. 1112. Exemptions.
Sec. 1113. Exceptions to discharge.
Sec. 1114. Effect of discharge.
Sec. 1115. Protection against discriminatory treatment.
Sec. 1116. Property of the estate.
Sec. 1117. Preferences.
Sec. 1118. Postpetition transactions.
Sec. 1119. Disposition of property of the estate.
Sec. 1120. General provisions.
Sec. 1121. Appointment of elected trustee.
Sec. 1122. Abandonment of railroad line.
Sec. 1123. Contents of plan.
Sec. 1124. Discharge under chapter 12.
Sec. 1125. Bankruptcy cases and proceedings.
Sec. 1126. Knowing disregard of bankruptcy law or rule.
Sec. 1127. Transfers made by nonprofit charitable corporations.
Sec. 1128. Prohibition on certain actions for failure to incur finance 
              charges.
Sec. 1129. Protection of valid purchase money security interests.
Sec. 1130. Trustees.

      TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1201. Effective date; application of amendments.

                TITLE I--CONSUMER BANKRUPTCY PROVISIONS

                   Subtitle A--Needs based bankruptcy

     SEC. 101. CONVERSION.

       Section 706(c) of title 11, United States Code, is amended 
     by inserting ``or consents to'' after ``requests''.

     SEC. 102. DISMISSAL OR CONVERSION.

       (a) In General.--Section 707 of title 11, United States 
     Code, is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``Sec. 707. Dismissal of a case or conversion to a case under 
       chapter 13'';

     and
       (2) in subsection (b)--
       (A) by inserting ``(1)'' after ``(b)''; and
       (B) in paragraph (1), as redesignated by subparagraph (A) 
     of this paragraph--
       (i) in the first sentence--

       (I) by striking ``but not at the request or suggestion'' 
     and inserting ``, panel trustee or'';
       (II) by inserting ``, or, with the debtor's consent, 
     convert such a case to a case under chapter 13 of this 
     title,'' after ``consumer debts''; and
       (III) by striking ``substantial abuse'' and inserting 
     ``abuse''; and

       (ii) by striking the last sentence and inserting the 
     following:
       ``(2)(A)(i) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter, the court shall presume abuse exists if the 
     debtor's current monthly income less amounts set forth in 
     clauses (ii), (iii), and (iv), and multiplied by 60 months is 
     not less than 25 percent of the debtor's nonpriority 
     unsecured claims in the case or $5,000, whichever is less.
       ``(ii) The debtor's monthly expenses shall be the 
     applicable monthly expenses under National Standards, Local 
     Standards, and Other Necessary Expenses allowance (excluding 
     payments for debts) issued by the Internal Revenue Service 
     for the area in which the debtor resides, as in effect on the 
     date of the entry of the order for relief, for the debtor, 
     the dependents of the debtor, and the spouse of the debtor in 
     a joint case, if the spouse is not otherwise a dependent.
       ``(iii) The debtor's average monthly payments on account of 
     secured debts shall be calculated as the total of all amounts 
     scheduled as contractually due to secured creditors in each 
     month of the 60 months following the date of the petition, 
     and dividing that total by 60 months.

[[Page H9956]]

       ``(iv) The debtor's expenses for payment of all priority 
     claims (including priority child support and alimony claims), 
     which shall be calculated as the total amount of debts 
     entitled to priority, and dividing the total by 60 months.
       ``(B) In any proceeding brought under this subsection, the 
     presumption of abuse may be rebutted only by demonstrating 
     extraordinary circumstances that require additional expenses 
     or adjustment of current monthly total income. In order to 
     establish extraordinary circumstances, the debtor must 
     itemize each additional expense or adjustment of income and 
     provide documentation for such expenses and a detailed 
     explanation of the extraordinary circumstances which make 
     such expenses necessary and reasonable. The debtor, and the 
     attorney for the debtor if the debtor has an attorney, shall 
     attest under oath to the accuracy of any information provided 
     to demonstrate that additional expenses or adjustment to 
     income are required. The presumption of abuse may be rebutted 
     only if such additional expenses or adjustments to income 
     cause the debtor's current monthly income less the amounts 
     set forth in clauses (ii), (iii), and (iv) of subparagraph 
     (A) when multiplied by 60 to be less than 25 percent of the 
     debtor's nonpriority unsecured claims $5,000, whichever is 
     less.
       ``(C) As part of the schedule of current income and 
     expenditures required under section 521 of this title, the 
     debtor shall include a statement of the debtor's current 
     monthly income, and the calculations which determine whether 
     a presumption arises under subparagraph (A)(i), showing how 
     each amount is calculated. The bankruptcy rules promulgated 
     under section 2075 of title 28, United States Code, shall 
     prescribe a form for such statement and may provide general 
     rules on its content.
       ``(3) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter in a case in which the presumption in 
     subparagraph (A)(i) does not apply or has been rebutted, the 
     court shall consider--
       ``(A) whether the debtor filed the petition in bad faith; 
     or
       ``(B) the totality of the circumstances (including whether 
     the debtor seeks to reject a personal services contract and 
     the financial need for such rejection as sought by the 
     debtor) of the debtor's financial situation demonstrates 
     abuse.''.
       (b) Definition.--Title 11, United States Code, is amended--
       (1) in section 101 by inserting after paragraph (10) the 
     following:
       ``(10A) `currently monthly income' means the average 
     monthly income from all sources derived which the debtor, or 
     in a joint case, the debtor and the debtor's spouse, receive 
     without regard to whether it is taxable income, in the 180 
     days preceding the date of determination, and includes any 
     amount paid by anyone other than the debtor or, in a joint 
     case, the debtor and the debtor's spouse, on a regular basis 
     to the household expenses of the debtor or the debtor's 
     dependents and, in a joint case, the debtor's spouse if not 
     otherwise a dependent;''; and
       (2) in section 704--
       (i) in paragraph (8) by striking ``and'' at the end;
       (ii) in paragraph (9) by striking the period at the end and 
     inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(10) With respect to an individual debtor under this 
     chapter, the panel trustee or bankruptcy administrator shall 
     review all materials filed by the debtor and, 10 days prior 
     to the first meeting of creditors, file with the court a 
     statement as to whether the debtor's case would be presumed 
     to be an abuse under section 707(b) of this title, and the 
     court shall provide a copy of such statement to all creditors 
     within 5 days. If, based on the filing of such statement with 
     the court, the panel trustee or bankruptcy administrator 
     determines that the debtor's case should be presumed to be an 
     abuse under section 707(b) of this title and the debtor's 
     current monthly income, when multiplied by 12, is not less 
     than the highest national median family income reported for a 
     family of equal or lesser size, or in the case of a household 
     of 1 person, the national median household income for 1 
     earner, the panel trustee or bankruptcy administrator shall 
     within 30 days file a motion to dismiss or convert under 
     section 707(b) of this title, or file a statement setting 
     forth the reasons the trustee does not believe that such a 
     motion would be appropriate.
       ``(3)(A) If a panel trustee appointed under section 
     586(a)(1) of title 28 brings a motion for dismissal or 
     conversion under this subsection and the court grants that 
     motion and finds that the action of the counsel for the 
     debtor in filing under this chapter was not substantially 
     justified, the court shall order the counsel for the debtor 
     to reimburse the trustee for all reasonable costs in 
     prosecuting the motion, including reasonable attorneys' fees.
       ``(B) If the court finds that the attorney for the debtor 
     violated Rule 9011, at a minimum, the court shall order--
       ``(i) the assessment of an appropriate civil penalty 
     against the counsel for the debtor; and
       ``(ii) the payment of the civil penalty to the panel 
     trustee or the United States trustee.
       ``(C) In the case of a petition referred to in subparagraph 
     (B), the signature of an attorney shall constitute a 
     certificate that the attorney has--
       ``(i) performed a reasonable investigation into the 
     circumstances that gave rise to the petition; and
       ``(ii) determined that the petition--
       ``(I) is well grounded in fact; and
       ``(II) is warranted by existing law or a good faith 
     argument for the extension, modification, or reversal of 
     existing law and does not constitute an abuse under paragraph 
     (1) of this subsection.
       ``(4)(A) Except as provided in subparagraph (B), the court 
     may award a debtor all reasonable costs in contesting a 
     motion brought by a party in interest (other than a panel 
     trustee or United States trustee) under this subsection 
     (including reasonable attorneys' fees) if--
       ``(i) the court does not grant the motion; and
       ``(ii) the court finds that--
       ``(I) the position of the party that brought the motion was 
     not substantially justified; or
       ``(II) the party brought the motion solely for the purpose 
     of coercing a debtor into waiving a right guaranteed to the 
     debtor under this title.
       ``(B) A party in interest that has a claim of an aggregate 
     amount less than $1,000 shall not be subject to subparagraph 
     (A).
       ``(5) However, only the judge, United States trustee, 
     bankruptcy administrator or panel trustee may bring a motion 
     under this section if the debtor and the debtor's spouse 
     combined, as of the date of the order for relief, have 
     current monthly total income equal to or less than the 
     national median household monthly income calculated on a 
     monthly basis for a household of equal size. However, for a 
     household of more than 4 individuals, the median income shall 
     be that of a household of 4 individuals plus $583 for each 
     additional member of that household.''.
       (c) Clerical Amendment.--The table of sections at the 
     beginning of chapter 7 of title 11, United States Code, is 
     amended by striking the item relating to section 707 and 
     inserting the following:

``707. Dismissal of a case or conversion to a case under chapter 13.''.

     SEC. 103. NOTICE OF ALTERNATIVES.

       Section 342(b) of title 11, United States Code, is amended 
     to read as follows:
       ``(b) Before the commencement of a case under this title by 
     an individual whose debts are primarily consumer debts, that 
     individual shall be given or obtain (as required in section 
     521(a)(1), as part of the certification process under 
     subchapter 1 of chapter 5) a written notice prescribed by the 
     United States trustee for the district in which the petition 
     is filed pursuant to section 586 of title 28. The notice 
     shall contain the following:
       ``(1) A brief description of chapters 7, 11, 12, and 13 and 
     the general purpose, benefits, and costs of proceeding under 
     each of those chapters.
       ``(2) A brief description of services that may be available 
     to that individual from a credit counseling service that is 
     approved by the United States trustee for that district.''.

     SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

       (a) Development of Financial Management and Training 
     Curriculum and Materials.--The Director of the Executive 
     Office for United States Trustees (in this section referred 
     to as the ``Director'') shall consult with a wide range of 
     individuals who are experts in the field of debtor education, 
     including trustees who are appointed under chapter 13 of 
     title 11 of the United States Code and who operate financial 
     management education programs for debtors, and shall develop 
     a financial management training curriculum and materials that 
     can be used to educate individual debtors on how to better 
     manage their finances.
       (b) Test--(1) The Director shall select 3 judicial 
     districts of the United States in which to test the 
     effectiveness of the financial management training curriculum 
     and materials developed under subsection (a).
       (2) For a 1-year period beginning not later than 270 days 
     after the date of the enactment of this Act, such curriculum 
     and materials shall be made available by the Director, 
     directly or indirectly, on request to individual debtors in 
     cases filed in such 1-year period under chapter 7 or 13 of 
     title 11 of the United States Code.
       (c) Evaluation.--(1) During the 1-year period referred to 
     in subsection (b), the Director shall evaluate the 
     effectiveness of--
       (A) the financial management training curriculum and 
     materials developed under subsection (a); and
       (B) a sample of existing consumer education programs such 
     as those described in the Report of the National Bankruptcy 
     Review Commission (October 20, 1997) that are representative 
     of consumer education programs carried out by the credit 
     industry, by trustees serving under chapter 13 of title 11 of 
     the United States Code, and by consumer counselling groups.
       (2) Not later than 3 months after concluding such 
     evaluation, the Director shall submit a report to the Speaker 
     of the House of Representatives and the President pro tempore 
     of the Senate, for referral to the appropriate committees of 
     the Congress, containing the findings of the Director 
     regarding the effectiveness of such curriculum, such 
     materials, and such programs.

              Subtitle B--Consumer Bankruptcy Protections

     SEC. 105. DEFINITIONS.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (3) the following:
       ``(3A) `assisted person' means any person whose debts 
     consist primarily of consumer debts and whose non-exempt 
     assets are less than $150,000;'';
       (2) by inserting after paragraph (4) the following:
       ``(4A) `bankruptcy assistance' means any goods or services 
     sold or otherwise provided to an assisted person with the 
     express or implied purpose of providing information, advice, 
     counsel, document preparation or filing, or attendance at a 
     creditors' meeting or appearing in a proceeding on behalf of 
     another or providing legal representation with respect to a 
     proceeding under this title;''; and
       (3) by inserting after paragraph (12A) the following:
       ``(12B) `debt relief agency' means any person who provides 
     any bankruptcy assistance to an

[[Page H9957]]

     assisted person in return for the payment of money or other 
     valuable consideration, or who is a bankruptcy petition 
     preparer pursuant to section 110 of this title, but does not 
     include any person that is any of the following or an 
     officer, director, employee or agent thereof--
       ``(A) any nonprofit organization which is exempt from 
     taxation under section 501(c)(3) of the Internal Revenue Code 
     of 1986;
       ``(B) any creditor of the person to the extent the creditor 
     is assisting the person to restructure any debt owed by the 
     person to the creditor; or
       ``(C) any depository institution (as defined in section 3 
     of the Federal Deposit Insurance Act) or any Federal credit 
     union or State credit union (as those terms are defined in 
     section 101 of the Federal Credit Union Act), or any 
     affiliate or subsidiary of such a depository institution or 
     credit union;''.
       (b) Conforming Amendment.--In section 104(b)(1) by 
     inserting ``101(3),'' after ``sections''.

     SEC. 106. DISCLOSURES.

       (a) Disclosures.--Subchapter II of chapter 5 of title 11, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 526. Disclosures

       ``(a) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide the following notices to 
     the assisted person:
       ``(1) the written notice required under section 342(b)(1) 
     of this title; and
       ``(2) to the extent not covered in the written notice 
     described in paragraph (1) of this section and no later than 
     three business days after the first date on which a debt 
     relief agency first offers to provide any bankruptcy 
     assistance services to an assisted person, a clear and 
     conspicuous written notice advising assisted persons of the 
     following--
       ``(A) all information the assisted person is required to 
     provide with a petition and thereafter during a case under 
     this title must be complete, accurate and truthful;
       ``(B) all assets and all liabilities must be completely and 
     accurately disclosed in the documents filed to commence the 
     case, and the replacement value of each asset as defined in 
     section 506 of this title must be stated in those documents 
     where requested after reasonable inquiry to establish such 
     value;
       ``(C) current monthly total income, projected monthly net 
     income and, in a chapter 13 case, monthly net income must be 
     stated after reasonable inquiry; and
       ``(D) that information an assisted person provides during 
     their case may be audited pursuant to this title and that 
     failure to provide such information may result in dismissal 
     of the proceeding under this title or other sanction 
     including, in some instances, criminal sanctions.
       ``(b) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide each assisted person at 
     the same time as the notices required under subsection (a)(1) 
     with the following statement, to the extent applicable, or 
     one substantially similar. The statement shall be clear and 
     conspicuous and shall be in a single document separate from 
     other documents or notices provided to the assisted person:
       `` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE 
     SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER
       `` `If you decide to seek bankruptcy relief, you can 
     represent yourself, you can hire an attorney to represent 
     you, or you can get help in some localities from a bankruptcy 
     petition preparer who is not an attorney. THE LAW REQUIRES AN 
     ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A 
     WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY 
     PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. 
     Ask to see the contract before you hire anyone.
       `` `The following information helps you understand what 
     must be done in a routine bankruptcy case to help you 
     evaluate how much service you need. Although bankruptcy can 
     be complex, many cases are routine.
       `` `Before filing a bankruptcy case, either you or your 
     attorney should analyze your eligibility for different forms 
     of debt relief made available by the Bankruptcy Code and 
     which form of relief is most likely to be beneficial for you. 
     Be sure you understand the relief you can obtain and its 
     limitations. To file a bankruptcy case, documents called a 
     Petition, Schedules and Statement of Financial Affairs, as 
     well as in some cases a Statement of Intention need to be 
     prepared correctly and filed with the bankruptcy court. You 
     will have to pay a filing fee to the bankruptcy court. Once 
     your case starts, you will have to attend the required first 
     meeting of creditors where you may be questioned by a court 
     official called a ``trustee'' and by creditors.
       `` `If you choose to file a chapter 7 case, you may be 
     asked by a creditor to reaffirm a debt. You may want help 
     deciding whether to do so and a creditor is not permitted to 
     coerce you into reaffirming your debts.
       `` `If you choose to file a chapter 13 case in which you 
     repay your creditors what you can afford over three to five 
     years, you may also want help with preparing your chapter 13 
     plan and with the confirmation hearing on your plan which 
     will be before a bankruptcy judge.
       `` `If you select another type of relief under the 
     Bankruptcy Code other than chapter 7 or chapter 13, you will 
     want to find out what needs to be done from someone familiar 
     with that type of relief.
       `` `Your bankruptcy case may also involve litigation. You 
     are generally permitted to represent yourself in litigation 
     in bankruptcy court, but only attorneys, not bankruptcy 
     petition preparers, can give you legal advice.'.
       ``(c) Except to the extent the debt relief agency provides 
     the required information itself after reasonably diligent 
     inquiry of the assisted person or others so as to obtain such 
     information reasonably accurately for inclusion on the 
     petition, schedules or statement of financial affairs, a debt 
     relief agency providing bankruptcy assistance to an assisted 
     person, to the extent permitted by nonbankruptcy law, shall 
     provide each assisted person at the time required for the 
     notice required under subsection (a)(1) reasonably sufficient 
     information (which may be provided orally or in a clear and 
     conspicuous writing) to the assisted person on how to 
     provide all the information the assisted person is 
     required to provide under this title pursuant to section 
     521, including--
       ``(1) how to value assets at replacement value, determine 
     current monthly total income, projected monthly income and, 
     in a chapter 13 case, net monthly income, and related 
     calculations;
       ``(2) how to complete the list of creditors, including how 
     to determine what amount is owed and what address for the 
     creditor should be shown; and
       ``(3) how to determine what property is exempt and how to 
     value exempt property at replacement value as defined in 
     section 506 of this title.
       ``(d) A debt relief agency shall maintain a copy of the 
     notices required under subsection (a) of this section for two 
     years after the later of the date on which the notice is 
     given the assisted person.''.
       (b) Conforming Amendment.--The table of section for chapter 
     5 of title 11, United States Code, is amended by inserting 
     after the item relating to section 525 the following:

``526. Disclosures.''.

     SEC. 107. DEBTOR'S BILL OF RIGHTS.

       (a) Debtor's Bill of Rights.--Subchapter II of chapter 5 of 
     title 11, United States Code, as amended by section 106, is 
     amended by adding at the end the following:

     ``Sec. 527. Debtor's bill of rights

       ``(a) A debt relief agency shall--
       ``(1) no later than five business days after the first date 
     on which a debt relief agency provides any bankruptcy 
     assistance services to an assisted person, but prior to such 
     assisted person's petition under this title being filed, 
     execute a written contract with the assisted person 
     specifying clearly and conspicuously the services the agency 
     will provide the assisted person and the basis on which fees 
     or charges will be made for such services and the terms of 
     payment, and give the assisted person a copy of the fully 
     executed and completed contract in a form the person can 
     keep;
       ``(2) disclose in any advertisement of bankruptcy 
     assistance services or of the benefits of bankruptcy directed 
     to the general public (whether in general media, seminars or 
     specific mailings, telephonic or electronic messages or 
     otherwise) that the services or benefits are with respect to 
     proceedings under this title, clearly and conspicuously using 
     the following statement: `We are a debt relief agency. We 
     help people file Bankruptcy petitions to obtain relief under 
     the Bankruptcy Code.' or a substantially similar statement. 
     An advertisement shall be of bankruptcy assistance services 
     if it describes or offers bankruptcy assistance with a 
     chapter 13 plan, regardless of whether chapter 13 is 
     specifically mentioned, including such statements as 
     `federally supervised repayment plan' or `Federal debt 
     restructuring help' or other similar statements which would 
     lead a reasonable consumer to believe that help with debts 
     was being offered when in fact in most cases the help 
     available is bankruptcy assistance with a chapter 13 plan; 
     and
       ``(3) if an advertisement directed to the general public 
     indicates that the debt relief agency provides assistance 
     with respect to credit defaults, mortgage foreclosures, lease 
     eviction proceedings, excessive debt, debt collection 
     pressure, or inability to pay any consumer debt, disclose 
     conspicuously in that advertisement that the assistance is 
     with respect to or may involve proceedings under this title, 
     using the following statement: ``We are a debt relief agency. 
     We help people file Bankruptcy petitions to obtain relief 
     under the Bankruptcy Code.'' or a substantially similar 
     statement.
       ``(b) A debt relief agency shall not--
       ``(1) fail to perform any service which the debt relief 
     agency has told the assisted person or prospective assisted 
     person the agency would provide that person in connection 
     with the preparation for or activities during a proceeding 
     under this title;
       ``(2) make any statement, or counsel or advise any assisted 
     person to make any statement in any document filed in a 
     proceeding under this title, which is untrue and misleading 
     or which upon the exercise of reasonable care, should be 
     known by the debt relief agency to be untrue or misleading;
       ``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission, what services the debt relief agency can 
     reasonably expect to provide that person, or the benefits an 
     assisted person may obtain or the difficulties the person may 
     experience if the person seeks relief in a proceeding 
     pursuant to this title; or
       ``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of that person 
     filing a proceeding under this title or in order to pay an 
     attorney or bankruptcy petition preparer fee or charge for 
     services performed as part of preparing for or representing a 
     debtor in a proceeding under this title.''.
       (b) Conforming Amendment.--The table of section for chapter 
     5 of title 11, United States Code, as amended by section 106, 
     is amended by inserting after the item relating to section 
     526, the following:

``527. Debtor's bill of rights.''.

     SEC. 108. ENFORCEMENT.

       (a) Enforcement.--Subchapter II of chapter 5 of title 11, 
     United States Code, as amended by

[[Page H9958]]

     sections 106 and 107, is amended by adding at the end the 
     following:

     ``Sec. 528. Debt relief agency enforcement

       ``(a) Assisted Person Waivers Invalid.--Any waiver by any 
     assisted person of any protection or right provided by or 
     under section 526 or 527 of this title shall be void and may 
     not be enforced by any Federal or State court or any other 
     person.
       ``(b) Noncompliance.--
       ``(1) Any contract between a debt relief agency and an 
     assisted person for bankruptcy assistance which does not 
     comply with the material requirements of section 526 or 527 
     of this title shall be treated as void and may not be 
     enforced by any Federal or State court or by any other 
     person.
       ``(2) Any debt relief agency which has been found, after 
     notice and hearing, to have--
       ``(A) negligently failed to comply with any provision of 
     section 526 or 527 with respect to a bankruptcy case or 
     related proceeding of an assisted person;
       ``(B) provided bankruptcy assistance to an assisted person 
     in a case or related proceeding which is dismissed or 
     converted because the debt relief agency's negligent failure 
     to file bankruptcy papers, including papers specified in 
     section 521 of this title; or
       ``(C) negligently or intentionally disregarded the material 
     requirements of this title or the Federal Rules of Bankruptcy 
     Procedure applicable to such debt relief agency shall be 
     liable to the assisted person in the amount of any fees and 
     charges in connection with providing bankruptcy assistance to 
     such person which the debt relief agency has already been 
     paid on account of that proceeding.
       ``(3) In addition to such other remedies as are provided 
     under State law, whenever the chief law enforcement officer 
     of a State, or an official or agency designated by a State, 
     has reason to believe that any person has violated or is 
     violating section 526 or 527 of this title, the State--
       ``(A) may bring an action to enjoin such violation;
       ``(B) may bring an action on behalf of its residents to 
     recover the actual damages of assisted persons arising from 
     such violation, including any liability under paragraph (2); 
     and
       ``(C) in the case of any successful action under 
     subparagraph (A) or (B), shall be awarded the costs of the 
     action and reasonable attorney fees as determined by the 
     court.
       ``(4) The United States District Court for any district 
     located in the State shall have concurrent jurisdiction of 
     any action under subparagraph (A) or (B) of paragraph (3).
       ``(5) Notwithstanding any other provision of Federal law, 
     if the court, on its own motion or on the motion of the 
     United States trustee, finds that a person intentionally 
     violated section 526 or 527 of this title, or engaged in a 
     clear and consistent pattern or practice of violating section 
     526 or 527 of this title, the court may--
       ``(A) enjoin the violation of such section; or
       ``(B) impose an appropriate civil penalty against such 
     person.
       ``(c) Relation to State Law.--This section and sections 526 
     and 527 shall not annul, alter, affect or exempt any person 
     subject to those sections from complying with any law of any 
     State except to the extent that such law is inconsistent with 
     those sections, and then only to the extent of the 
     inconsistency.''.
       (b) Conforming Amendment.--The table of section for chapter 
     5 of title 11, United States Code, as amended by sections 106 
     and 107, is amended by inserting after the item relating to 
     section 527, the following:

``528. Debt relief agency enforcement.''.

     SEC. 109. SENSE OF THE CONGRESS.

       It is the sense of the Congress that States should develop 
     curricula relating to the subject of personal finance, 
     designed for use in elementary and secondary schools.

     SEC. 110. DISCOURAGING ABUSE REAFFIRMATION PRACTICES.

       Section 524(c)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A) by striking ``and'' at the end;
       (2) in subparagraph (B) by adding ``and'' at the end; and
       (3) by adding at the end the following:
       ``(C) if the consideration for such agreement is based on a 
     wholly unsecured consumer debt, such agreement contains a 
     clear and conspicuous statement which advises the debtor--
       ``(i) that the debtor is entitled to a hearing before the 
     court at which the debtor shall appear in person and at which 
     the court will decide whether the agreement is an undue 
     hardship, not in the debtor's best interest, and not the 
     result of a threat by the creditor to take any action that 
     cannot be legally taken or that is not intended to be taken; 
     and
       ``(ii) that if the debtor is represented by counsel, the 
     debtor may waive the debtor's right to such a hearing by 
     signing a statement waiving the hearing, stating that the 
     debtor is represented by counsel, and identifying such 
     counsel;'';
       (3) in subsection (6)(A)--
       (A) by striking ``and'' at the end of clause (i);
       (B) by striking the period at the end of clause (ii) and 
     inserting ``; and'';
       (C) by adding at the end thereof the following:
       ``(iii) not entered into by the debtor as the result of a 
     threat by the creditor to take any action that cannot be 
     legally taken or that is not intended to be taken.''; and
       (4) in the 3d sentence of subsection (d)--
       (A) by striking ``of this section'' and inserting a comma; 
     and
       (B) by inserting after ``such agreement'' the following:

     ``or if the consideration for such agreement is based on a 
     wholly unsecured consumer debt (except for debts owed to 
     creditors defined in section 461(b)(10(A)(iv) of title 12, 
     United States Code) and the debtor has not waived the 
     debtor's right to a hearing on the agreement in accordance 
     with subsection (c)(2)(C) of this section''.

     SEC. 111. PROMOTION ALTERNATIVE DISPUTE RESOLUTION.

       (a) Reduction of Claim.--Section 502 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(k)(1) The court, on the motion of the debtor and after a 
     hearing, may reduce a claim filed under this section based in 
     whole on unsecured consumer debts by not more than 20 
     percent, if the debtor can prove by clear and convincing 
     evidence that the claim was filed by a creditor who 
     unreasonably refused to negotiate a reasonable alternative 
     repayment schedule proposed by an approved credit counseling 
     agency acting on behalf of the debtor, if--
       ``(A) such offer was made at least 60 days before the 
     filing of the petition;
       ``(B) such offer provided for payment of at least 60 
     percent of the amount of the debtor over a period not to 
     exceed the repayment period of the loan, or a reasonable 
     extension thereof; and
       ``(C) no part of the debt under the alternative repayment 
     schedule is nondischargeable.
       ``(2) The debtor shall have the burden of proving that the 
     proposed alternative repayment schedule was made in the 60-
     day period specified in subparagraph (A) and that the 
     creditor unreasonably refused to consider the debtor's 
     proposal.''.
       (b) Limitation on Avoidability.--Section 547 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(h) The trustee may not avoid a transfer if such transfer 
     was made as a part of an alternative repayment plan between 
     the debtor and any creditor of the debtor created by an 
     approved credit counseling agency.''.

     SEC. 112. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED 
                   BY A DWELLING.

       (a) Study Required.--During the period beginning 180 days 
     after the date of enactment of this Act and ending 18 months 
     after the date of the enactment, the Board of Governors of 
     the Federal Reserve System (in this section referred to as 
     the ``Board'') shall conduct a study and submit to Congress a 
     report (including recommendations for any appropriate 
     legislation) regarding--
       (1) whether a consumer engaging in an open-end credit 
     transaction (as defined pursuant to section 103 of the Truth 
     in lending Act) secured by the consumer's principal dwelling 
     is provided adequate information under Federal law, including 
     under section 127A of the Truth in Lending Act, regarding the 
     tax deductibility of interest paid on such transaction; and
       (2) whether a consumer engaging in a closed-end credit 
     transaction (as defined pursuant to section 103 of the Truth 
     in Lending Act) secured by the consumer's principal dwelling 
     is provided adequate information regarding the tax 
     deductibility of interest paid on such transaction.

     In conducting such study, the Board shall specifically 
     consider whether additional disclosures are necessary with 
     respect to such open-end or closed-end credit transactions in 
     which the amount of the credit extended exceeds the fair 
     market value of the dwelling.
       (b) Regulations.--If the Board determines that additional 
     disclosures are necessary in connection with transactions 
     described in subsection (a), the Board, pursuant to its 
     authority under the Truth in Lending Act, may promulgate 
     regulations that would require such additional disclosures. 
     Any such regulations promulgated by the Board under this 
     section shall not take effect before the end of the 36-month 
     period after the date of the enactment of this Act.

     SEC. 113. DUAL USE DEBIT CARD.

       (a) Study Required.--The Board of Governors of the Federal 
     Reserve System (in this section referred to as the ``Board'') 
     shall conduct a study of existing protections provided to 
     consumers to limit their liability for unauthorized use or a 
     debit card or similar access device.
       (b) Specific Considerations.--In conducting the study 
     required by subsection (a), the Board shall specifically 
     consider the following--
       (1) the extent to which existing provisions of section 909 
     of the Electronic Fund Transfer Act and the Board's 
     implementing regulations provide adequate unauthorized use 
     liability protection for consumers;
       (2) the extent to which any voluntary industry rules have 
     enhanced the level of protection afforded consumers in 
     connection with such unauthorized use liability; and
       (3) whether amendments to the Electronic Funds Transfer Act 
     or the Board's implementing regulations thereto are necessary 
     to provide adequate protection for consumers in this area.
       (c) Report and Regulations.--Not later than 2 years after 
     the date of the enactment of this Act, the Board shall make 
     public a report on its findings with respect to the adequacy 
     of existing protections afforded consumers with respect to 
     unauthorized-use liability for debit cards and similar access 
     devices. If the Board determines that such protections are 
     inadequate, the Board, pursuant to its authority under the 
     Electronic Funds Transfer Act, may issue regulations to 
     address such inadequacy. Any regulations issued by the Board 
     shall not be effective before 36 months after the date of the 
     enactment of this Act.

     SEC. 114. ENHANCED DISCLOSURES UNDER AN OPEN-END CREDIT PLAN.

       (a) Initial and Annual Minimum Payment Disclosure.--Section 
     127(a) of the Truth in Lending Act (15 U.S.C. 1637(a)) is 
     amended by adding at the end the following:
       ``(9) In the case of any credit or charge card account 
     under an open-end consumer credit

[[Page H9959]]

     plan on which a minimum monthly or periodic payment will be 
     required, other than an account described in paragraph (8)--
       ``(A) the following statement: `The minimum payment amount 
     shown on your billing statement is the smallest payment which 
     you an make in order to keep the account in good standing. 
     This payment option is offered as a convenience and you may 
     make larger payments at any time. Making only the minimum 
     payment each month will increase the amount of interest you 
     pay and the length of time it takes to repay your outstanding 
     balance.';
       ``(B) if the plan provides that the consumer will be 
     permitted to forgo making a minimum payment during a 
     specified billing cycle, a statement, if applicable, that if 
     the consumer chooses to forgo making the minimum payment, 
     finance charges will continue to accrue; and
       ``(C) an example, based on an annual percentage rate and 
     method for determining minimum periodic payments recently in 
     effect for that creditor, and a $500 outstanding balance, 
     showing the estimated minimum periodic payment, and the 
     estimated period of time it would take to repay the $500 
     outstanding balance if the consumer paid only the minimum 
     periodic payment on each monthly or periodic statement and 
     obtained no additional extensions of credit.
       ``(10) With respect to one billing cycle per calendar year, 
     the creditor shall transmit the information required under 
     paragraph (9) to each consumer to whom the creditor is 
     required to transit a statement pursuant to subsection (b) 
     for such billing cycle. The creditor shall also transmit to 
     such consumer for such cycle a worksheet prescribed by the 
     Board to assist the consumer in determining the consumer's 
     household income and debt obligations.''.
       (b) Period Minimum Payment Disclosures.--Section 127(b) of 
     the Truth in Lending Act (15 U.S.C. 1637(b)) is amended by 
     adding at the end the following:
       ``(11) The following statement: `The minimum payment amount 
     shown on your billing statement is the smallest payment which 
     you can make in order to keep the account in good standing. 
     This payment option is offered as a convenience and you 
     may make larger payments at any time. Making only the 
     minimum payment each month will increase the amount of 
     interest you pay and the length of time it takes to repay 
     your outstanding balance.' ''.
       (c) Enforcement.--Section 127 of the Truth in Lending Act 
     (15 U.S.C. 1637) is amended by adding at the end the 
     following:
       ``(h) In promulgating regulations to implement the 
     disclosure of an example required under subsection (a)(9)(C) 
     and (a)(10), the Board shall set forth a model disclosure to 
     accompany the example stating that the credit features shown 
     are only an example which does not obligate the creditor, but 
     is intended to illustrate the approximate length of time it 
     could take to repay using the assumptions set forth in 
     subsection (a)(9)(C) without regard to any other factors that 
     could impact an approximate repayment period, including other 
     credit features or the consumer's payment or other behavior 
     with respect to the account. Compliance with the disclosures 
     required under subsection (a)(9)(C) and (a)(10) shall be 
     enforced exclusively by the Federal agencies set forth in 
     section 108.''.
       (d) Regulatory Implementation.--The Board of Governors of 
     the Federal Reserve System (in this section referred to as 
     the ``Board'') shall promulgate regulations implementing the 
     amendments made by subsections (a) and (b). Such regulations 
     shall take effect no earlier than the end of the 36-month 
     period beginning on the date of the enactment of this Act.
       (e) Study Required.--The Board shall conduct a study to 
     determine whether consumers have adequate information about 
     borrowing activities which may result in financial problems. 
     In studying this issue, the Board shall consider the extent 
     to which--
       (1) consumers, in establishing new credit arrangements, are 
     aware of their existing payment obligations, the need to 
     consider those obligations in deciding to take on new credit, 
     and how taking on excessive credit can result in financial 
     difficulty;
       (2) minimum periodic payment features offered in connection 
     with open-end credit plans impact consumer default rates;
       (3) consumers always make only the minimum payment 
     throughout the life of the plan;
       (4) consumers are aware that making only minimum payments 
     will increase the cost and repayment period of an open-end 
     loan; and
       (5) the availability of low minimum payment options is a 
     cause of consumers experiencing financial difficulty.
       (f) Report to Congress.--Before the end of the 2-year 
     period beginning on the date of the enactment of this Act, 
     the Board shall submit to Congress a report containing the 
     findings of the Board in connection with the study required 
     under subsection (b).
       (g) Regulations.--The Board shall, by regulation 
     promulgated pursuant to its authority under the Truth in 
     Lending Act, require additional disclosures to consumers 
     regarding minimum payment features, including periodic 
     statement disclosures, if the Board determines that such 
     disclosures are necessary based on its findings. Any such 
     regulations promulgated by the Board shall not take effect 
     earlier than January 1, 2001.

     SEC. 115. PROTECTION OF SAVINGS EARMARKED FOR THE 
                   POSTSECONDARY EDUCATION OF CHILDREN.

       (a) In General.--Section 522(b) of title 11, United States 
     Code, as amended by section 330, is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (B), by striking ``and'' at the end;
       (B) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(D) postsecondary education accounts as described as 
     follows:
       ``(i) except as provided under applicable State law or 
     except as provided in paragraph (5), any funds placed in a 
     qualified tuition program (as described in section 529(b) of 
     the Internal Revenue Code of 1986) at least 365 days before 
     the date of entry of the order for relief and which has not 
     been pledged or promised to any person in connection with any 
     extension of credit; or
       ``(ii) except as provided in paragraph (5), any funds 
     placed in an education individual retirement account (as 
     defined in section 530(b)(1) of the Internal Revenue Code of 
     1986) at least 365 days before the date of entry of the order 
     for relief and which has not been pledged or promised to any 
     person in connection with any extension of credit;''; and
       (4) by adding at the end the following:
       ``(5) For purposes of paragraph (3)(D), funds placed in a 
     qualified tuition program or in an education individual 
     retirement account shall not be exempt under this 
     subsection--
       ``(A) unless the debtor has one or more dependent children 
     less than 22 years of age;
       ``(B) if the amounts in such postsecondary accounts do not 
     exceed the lesser of $50,000 (in the aggregate) in accounts 
     attributable to each such dependent child or $100,000 (in the 
     aggregate) attributable to all such dependent children;
       ``(C) to the extent such funds contributed to such account 
     exceed $500 per year per child; and
       ``(D) any individual (other than the dependent child of the 
     debtor to whom such account is attributable) has any 
     ownership right to such funds, or the right to obtain 
     ownership in the future of any amount of such funds (other 
     than upon the death or serious mental impairment of such 
     child), or direct the application of such funds for any 
     purpose other than the postsecondary education of such 
     child.''.

     SEC. 116. EFFECT OF DISCHARGE.

       Section 524 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(i) The willful failure of a creditor to credit payments 
     received under a plan confirmed under this title (including a 
     plan of reorganization confirmed under chapter 11 of this 
     title) in the manner required by the plan (including 
     crediting the amounts required under the plan) shall 
     constitute a violation of an injunction under subsection 
     (a)(2).
       ``(j)(1) An individual who is injured by the failure of a 
     creditor to comply with the requirements for a reaffirmation 
     agreement under subsections (c) and (d), or by any willful 
     violation of the injunction under subsection (a)(2), shall be 
     entitled to recover--
       ``(A) the greater of--
       ``(i) the amount of actual damages; or
       ``(ii) $1,000; and
       ``(B) costs and attorneys' fees.
       ``(2) An action to recover for a violation specified in 
     paragraph (1) may not be brought as a class action.''.

     SEC. 117. AUTOMATIC STAY.

       Section 362(h) of title 11, United States Code, is amended 
     to read as follows:
       ``(h)(1) An individual who is injured by any willful 
     violation of a stay provided in this section shall be 
     entitled to recover--
       ``(A) actual damages; and
       ``(B) reasonable costs, including attorneys' fees.
       ``(2) An action to recover for a violation specified in 
     paragraph (1) may not be brought as a class action.''.

     SEC. 118. REINFORCE THE FRESH START.

       (a) Restoration of an Effective Discharge.--Section 
     523(a)(17) of title 11, United States Code, is amended--
       (1) by striking ``by a court'' and inserting ``on a 
     prisoner by any court'',
       (2) by striking ``section 1915(b) or (f)'' and inserting 
     ``subsection (b) or (f)(2) of section 1915'', and
       (3) by inserting ``(or a similar non-Federal law)'' after 
     ``title 28'' each place it appears.

     SEC. 119. DISCOURAGING BAD FAITH REPEAT FILINGS.

       Section 362(c) of title 11, United States Code, is 
     amended--
       (1) in paragraph (1) by striking ``and'' at the end;
       (2) in paragraph (2) by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(3) If a single or joint case is filed by or against an 
     individual debtor under chapter 7, 11, or 13, and if a single 
     or joint case of the debtor was pending within the previous 
     1-year period but was dismissed, other than a case refiled 
     under a chapter other than chapter 7 after dismissal under 
     section 707(b) of this title, the stay under subsection (a) 
     with respect to any action taken with respect to a debt or 
     property securing such debt or with respect to any lease will 
     terminate with respect to the debtor on the 30th day after 
     the filing of the later case. Upon motion by a party in 
     interest for continuation of the automatic stay and upon 
     notice and a hearing, the court may extend the stay in 
     particular cases as to any or all creditors (subject to such 
     conditions or limitations as the court may then impose) after 
     notice and a hearing completed before the expiration of the 
     30-day period only if the party in interest demonstrates that 
     the filing of the later case is in good faith as to the 
     creditors to be stayed. A case is presumptively filed not in 
     good faith (but such presumption may be rebutted by clear and 
     convincing evidence to the contrary)--
       ``(A) as to all creditors if--
       ``(i) more than 1 previous case under any of chapters 7, 
     11, or 13 in which the individual was a debtor was pending 
     within such 1-year period;
       ``(ii) a previous case under any of chapters 7, 11, or 13 
     in which the individual was a debtor was dismissed within 
     such 1-year period, after the debtor failed to file or amend 
     the petition or

[[Page H9960]]

     other documents as required by this title or the court 
     without substantial excuse (but mere inadvertence or 
     negligence shall not be substantial excuse unless the 
     dismissal was caused by the negligence of the debtor's 
     attorney), failed to provide adequate protection as ordered 
     by the court, or failed to perform the terms of a plan 
     confirmed by the court; or
       ``(iii) there has not been a substantial change in the 
     financial or personal affairs of the debtor since the 
     dismissal of the next most previous case under any of 
     chapters 7, 11, or 13 of this title, or any other reason to 
     conclude that the later case will be concluded, if a case 
     under chapter 7 of this title, with a discharge, and if a 
     chapter 11 or 13 case, a confirmed plan which will be fully 
     performed;
       ``(B) as to any creditor that commenced an action under 
     subsection (d) in a previous case in which the individual was 
     a debtor if, as of the date of dismissal of such case, that 
     action was still pending or had been resolved by terminating, 
     conditioning, or limiting the stay as to actions of such 
     creditor.
       ``(4) If a single or joint case is filed by or against an 
     individual debtor under this title, and if 2 or more single 
     or joint cases of the debtor were pending within the previous 
     year but were dismissed, other than a case refiled under 
     section 707(b) of this title, the stay under subsection (a) 
     will not go into effect upon the filing of the later case. On 
     request of a party in interest, the court shall promptly 
     enter an order confirming that no stay is in effect. If a 
     party in interest requests within 30 days of the filing of 
     the later case, the court may order the stay to take effect 
     in the case as to any or all creditors (subject to such 
     conditions or limitations as the court may impose), after 
     notice and hearing, only if the party in interest 
     demonstrates that the filing of the later case is in good 
     faith as to the creditors to be stayed. A stay imposed 
     pursuant to the preceding sentence will be effective on the 
     date of entry of the order allowing the stay to go into 
     effect. A case is presumptively not filed in good faith (but 
     such presumption may be rebutted by clear and convincing 
     evidence to the contrary)--
       ``(A) as to all creditors if--
       ``(i) 2 or more previous cases under this title in which 
     the individual was a debtor were pending within the 1-year 
     period;
       ``(ii) a previous case under this title in which the 
     individual was a debtor was dismissed within the time period 
     stated in this paragraph after the debtor failed to file or 
     amend the petition or other documents as required by this 
     title or the court without substantial excuse (but mere 
     inadvertence or negligence shall not be substantial excuse 
     unless the dismissal was caused by the negligence of the 
     debtor's attorney), failed to pay adequate protection as 
     ordered by the court, or failed to perform the terms of a 
     plan confirmed by the court; or
       ``(iii) there has not been a substantial change in the 
     financial or personal affairs of the debtor since the 
     dismissal of the next most previous case under this title, or 
     any other reason to conclude that the later case will not be 
     concluded, if a case under chapter 7, with a discharge, and 
     if a case under chapter 11 or 13, with a confirmed plan that 
     will be fully performed; or
       ``(B) as to any creditor that commenced an action under 
     subsection (d) in a previous case in which the individual was 
     a debtor if, as of the date of dismissal of such case, such 
     action was still pending or had been resolved by terminating, 
     conditioning, or limiting the stay as to action of such 
     creditor.''.

     SEC. 120. CURBING ABUSIVE FILINGS.

       (a) In General.--Section 362(d) of title 11, United States 
     Code, is amended--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(4) with respect to a stay of an act against real 
     property under subsection (a), by a creditor whose claim is 
     secured by an interest in such real estate, if the court 
     finds that the filing of the bankruptcy petition was part of 
     a scheme to delay, hinder, and defraud creditors that 
     involved either--
       ``(A) transfer of all or part ownership of, or other 
     interest in, the real property without the consent of the 
     secured creditor or court approval; or
       ``(B) multiple bankruptcy filings affecting the real 
     property.

     If recorded in compliance with applicable State laws 
     governing notices of interests or liens in real property, an 
     order entered pursuant to this subsection shall be binding in 
     any other case under this title purporting to affect the real 
     property filed not later than 2 years after that recording, 
     except that a debtor in a subsequent case may move for relief 
     from such order based upon changed circumstances or for good 
     cause shown, after notice and a hearing.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, is amended--
       (1) in paragraph (17), by striking ``or'' at the end;
       (2) in paragraph (18) by striking the period at the end; 
     and
       (3) by inserting after paragraph (18) the following:
       ``(19) under subsection (a), of any act to enforce any lien 
     against or security interest in real property following the 
     entry of an order under section 362(d)(4) of this title as to 
     that property in any prior bankruptcy case for a period of 2 
     years after entry of such an order. The debtor in a 
     subsequent case, however, may move the court for relief from 
     such order based upon changed circumstances or for other good 
     cause shown, after notice and a hearing; or
       ``(20) under subsection (a), of any act to enforce any lien 
     against or security interest in real property--
       ``(A) if the debtor is ineligible under section 109(g) of 
     this title to be a debtor in a bankruptcy case; or
       ``(B) if the bankruptcy case was filed in violation of a 
     bankruptcy court order in a prior bankruptcy case prohibiting 
     the debtor from being a debtor in another bankruptcy case.''.

     SEC. 121. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

       Title 11, United States Code, is amended--
       (1) in section 521--
       (A) in paragraph (4) by striking ``and'' at the end;
       (B) in paragraph (5) by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(6) in an individual case under chapter 7 of this title, 
     not retain possession of personal property as to which a 
     creditor has an allowed claim for the purchase price secured 
     in whole or in part by an interest in that personal property 
     unless, in the case of an individual debtor, the debtor takes 
     1 of the following actions within 45 days after the first 
     meeting of creditors under section 341(a)--
       ``(A) enters into an agreement with the creditor pursuant 
     to section 524(c) of this title with respect to the claim 
     secured by such property; or
       ``(B) redeems such property from the security interest 
     pursuant to section 722 of this title.

     ``If the debtor fails to so act within the 45-day period, the 
     personal property affected shall no longer be property of the 
     estate, and the creditor may take whatever action as to such 
     property as is permitted by applicable nonbankruptcy law, 
     unless the court determines on the motion of the trustee, and 
     after notice and a hearing, that such property is of 
     consequential value or benefit to the estate.''; and
       (2) in section 722 by inserting ``in full at the time of 
     redemption'' before the period at the end.

     SEC. 122. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES 
                   NOT COMPLETE INTENDED SURRENDER OF CONSUMER 
                   DEBT COLLATERAL.

       Title 11, United States Code, is amended as follows--
       (1) in section 362--
       (A) by striking ``(e), and (f)'' in subsection (c) and 
     inserting in lieu thereof ``(e), (f), and (h)''; and
       (B) by redesignating subsection (h), as amended by section 
     117, as subsection (i) and by inserting after subsection (g) 
     the following:
       ``(h) In an individual case pursuant to chapter 7, 11, or 
     13 the stay provided by subsection (a) is terminated with 
     respect to property of the estate securing in whole or in 
     part a claim, or subject to an unexpired lease, if the debtor 
     fails within the applicable time set by section 521(a)(2) of 
     this title--
       ``(1) to file timely any statement of intention required 
     under section 521(a)(2) of this title with respect to that 
     property or to indicate therein that the debtor will either 
     surrender the property or retain it and, if retaining it, 
     either redeem the property pursuant to section 722 of this 
     title, reaffirm the debt it secures pursuant to section 
     524(c) of this title, or assume the unexpired lease pursuant 
     to section 365(p) of this title if the trustee does not do 
     so, as applicable; or
       ``(2) to take timely the action specified in that statement 
     of intention, as it may be amended before expiration of the 
     period for taking action, unless the statement of intention 
     specifies reaffirmation and the creditor refuses to reaffirm 
     on the original contract terms;

     unless the court determines on the motion of the trustee, and 
     after notice and a hearing, that such property is of 
     consequential value or benefit to the estate.''; and
       (2) in section 521, as amended by sections 121 and 604--
       (A) in paragraph (2) by striking ``consumer'';
       (B) in paragraph (2)(B)--
       (i) by striking ``forty-five days after the filing of a 
     notice of intent under this section'' and inserting ``30 days 
     after the first date set for the meeting of creditors under 
     section 341(a) of this title''; and
       (ii) by striking ``forty-five day'' the second place it 
     appears and inserting ``30-day'';
       (C) in paragraph (2)(C) by inserting ``except as provided 
     in section 362(h) of this title'' before the semicolon; and
       (D) by adding at the end the following:
       ``(c) If the debtor fails timely to take the action 
     specified in subsection (a)(6) of this section, or in 
     paragraphs (1) and (2) of section 362(h) of this title, with 
     respect to property which a lessor or bailor owns and has 
     leased, rented, or bailed to the debtor or as to which a 
     creditor holds a security interest not otherwise voidable 
     under section 522(f), 544, 545, 547, 548, or 549 of this 
     title, nothing in this title shall prevent or limit the 
     operation of a provision in the underlying lease or agreement 
     which has the effect of placing the debtor in default under 
     such lease or agreement by reason of the occurrence, 
     pendency, or existence of a proceeding under this title or 
     the insolvency of the debtor. Nothing in this subsection 
     shall be deemed to justify limiting such a provision in any 
     other circumstance.''.

     SEC. 123. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 
                   13.

       Section 1325(a)(5)(B)(i) of title 11, United States Code, 
     is amended to read as follows:
       ``(i) the plan provides that the holder of such claim 
     retain the lien securing such claim until the earlier of 
     payment of the underlying debt determined under nonbankruptcy 
     law or discharge under section 1328 of this title, and that 
     if the case under this chapter is dismissed or converted 
     without completion of the plan, such lien shall also be 
     retained by such holder to the extent recognized by 
     applicable nonbankruptcy law; and''.

[[Page H9961]]

     SEC. 124. RESTRAINING ABUSIVE PURCHASES ON SECURED CREDIT.

       Section 506 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) In an individual case under chapter 7, 11, 12, or 
     13--
       ``(1) subsection (a) shall not apply to an allowed claim to 
     the extent attributable in whole or in part to the purchase 
     price of personal property acquired by the debtor within 5 
     years of the filing of the petition, except for the purpose 
     of applying paragraph (3) of this subsection;
       ``(2) if such allowed claim attributable to the purchase 
     price is secured only by the personal property so acquired, 
     the value of the personal property and the amount of the 
     allowed secured claim shall be the sum of the unpaid 
     principal balance of the purchase price and accrued and 
     unpaid interest and charges at the contract rate;
       ``(3) if such allowed claim attributable to the purchase 
     price is secured by the personal property so acquired and 
     other property, the value of the security may be determined 
     under subsection (a), but the value of the security and the 
     amount of the allowed secured claim shall be not less than 
     the unpaid principal balance of the purchase price of the 
     personal property acquired and unpaid interest and charges at 
     the contract rate; and
       ``(4) in any subsequent case under this title that is filed 
     by or against the debtor in the 2-year period beginning on 
     the date the petition is filed in the original case, the 
     value of the personal property and the amount of the allowed 
     secured claim shall be deemed to be not less than the amount 
     provided under paragraphs (2) and (3).''.

     SEC. 125. FAIR VALUATION OF COLLATERAL.

       Section 506(a) of title 11, United States Code, is amended 
     by adding at the end the following:
     ``In the case of an individual debtor under chapters 7 and 
     13, such value with respect to personal property securing an 
     allowed claim shall be determined based on the replacement 
     value of such property as of the date of filing the petition 
     without deduction for costs of sale or marketing. With 
     respect to property acquired for personal, family, or 
     household purpose, replacement value shall mean the price 
     a retail merchant would charge for property of that kind 
     considering the age and condition of the property at the 
     time value is determined.''.

     SEC. 126. EXEMPTIONS.

       Section 522(b)(2)(A) of title 11, United States Code, is 
     amended--
       (1) by striking ``180'' and inserting ``730''; and
       (2) by striking ``, or for a longer portion of such 180-day 
     period than in any other place''.

     SEC. 127. LIMITATION.

       Section 522 of title 11, United States Code, is amended--
       (1) in subsection (b)(2)(A) by inserting ``subject to 
     subsection (n),'' before ``any property''; and
       (2) by adding at the end the following:
       ``(n) For purposes of subsection (b)(2)(A) and 
     notwithstanding subsection (a), the value of an interest in--
       ``(1) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(2) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(3) a burial plot for the debtor or a dependent of the 
     debtor;

     shall be reduced to the extent such value is attributable to 
     any portion of any property that the debtor disposed of in 
     the 730-day period ending of the date of the filing of the 
     petition, with the intent to hinder, delay, or defraud a 
     creditor and that the debtor could not exempt, or that 
     portion that the debtor could not exempt, under subsection 
     (b) if on such date the debtor had held the property so 
     disposed of.''.

     SEC. 128. ROLLING STOCK EQUIPMENT.

       (a) In General.--Section 1168 of title 11, United States 
     Code, is amended to read as follows:

     ``Sec. 1168. Rolling stock equipment.

       ``(a)(1) The right of a secured party with a security 
     interest in or of a lessor or conditional vendor of equipment 
     described in paragraph (2) to take possession of such 
     equipment in compliance with an equipment security agreement, 
     lease, or conditional sale contract, and to enforce any of 
     its other rights or remedies under such security agreement, 
     lease, or conditional sale contract, to sell, lease, or 
     otherwise retain or dispose of such equipment, is not limited 
     or otherwise affected by any other provision of this title or 
     by any power of the court, except that the right to take 
     possession and enforce those other rights and remedies shall 
     be subject to section 362 of this title, if--
       ``(A) before the date that is 60 days after the date of 
     commencement of a case under this chapter, the trustee, 
     subject to the court's approval, agrees to perform all 
     obligations of the debtor under such security agreement, 
     lease, or conditional sale contract; and
       ``(B) any default, other than a default of a kind described 
     in section 365(b)(2) of this title, under such security 
     agreement, lease, or conditional sale contract--
       ``(i) that occurs before the date of commencement of the 
     case and is an event of default therewith is cured before the 
     expiration of such 60-day period;
       ``(ii) that occurs or becomes an event of default after the 
     date of commencement of the case and before the expiration of 
     such 60-day period is cured before the later of--
       ``(I) the date that is 30 days after the date of the 
     default or event of the default; or
       ``(II) the expiration of such 60-day period; and
       ``(iii) that occurs on or after the expiration of such 60-
     day period is cured in accordance with the terms of such 
     security agreement, lease, or conditional sale contract, if 
     cure is permitted under that agreement, lease, or conditional 
     sale contract.
       ``(2) The equipment described in this paragraph--
       ``(A) is rolling stock equipment or accessories used on 
     rolling stock equipment, including superstructures or racks, 
     that is subject to a security interest granted by, leased to, 
     or conditionally sold to a debtor; and
       ``(B) includes all records and documents relating to such 
     equipment that are required, under the terms of the security 
     agreement, lease, or conditional sale contract, that is to be 
     surrendered or returned by the debtor in connection with the 
     surrender or return of such equipment.
       ``(3) Paragraph (1) applies to a secured party, lessor, or 
     conditional vendor acting in its own behalf or acting as 
     trustee or otherwise in behalf of another party.
       ``(b) The trustee and the secured party, lessor, or 
     conditional vendor whose right to take possession is 
     protected under subsection (a) may agree, subject to the 
     court's approval, to extend the 60-day period specified in 
     subsection (a)(1).
       ``(c)(1) In any case under this chapter, the trustee shall 
     immediately surrender and return to a secured party, lessor, 
     or conditional vendor, described in subsection (a)(1), 
     equipment described in subsection (a)(2), if at any time 
     after the date of commencement of the case under this chapter 
     such secured party, lessor, or conditional vendor is entitled 
     pursuant to subsection (a)(1) to take possession of such 
     equipment and makes a written demand for such possession of 
     the trustee.
       ``(2) At such time as the trustee is required under 
     paragraph (1) to surrender and return equipment described in 
     subsection (a)(2), any lease of such equipment, and any 
     security agreement or conditional sale contract relating to 
     such equipment, if such security agreement or conditional 
     sale contract is an executory contract, shall be deemed 
     rejected.
       ``(d) With respect to equipment first placed in service on 
     or prior to October 22, 1994, for purposes of this section--
       ``(1) the term `lease' includes any written agreement with 
     respect to which the lessor and the debtor, as lessee, have 
     expressed in the agreement or in a substantially 
     contemporaneous writing that the agreement is to be treated 
     as a lease for Federal income tax purposes; and
       ``(2) the term `security interest' means a purchase-money 
     equipment security interest.
       ``(e) With respect to equipment first placed in service 
     after October 22, 1994, for purposes of this section, the 
     term `rolling stock equipment' includes rolling stock 
     equipment that is substantially rebuilt and accessories used 
     on such equipment.''.
       (b) Aircraft Equipment and Vessels.--Section 1110 of title 
     11, United States Code, is amended to read as follows:

     ``Sec. 1110. Aircraft equipment and vessels

       ``(a)(1) Except as provided in paragraph (2) and subject to 
     subsection (b), the right of a secured party with a security 
     interest in equipment described in paragraph (3), or of a 
     lessor or conditional vendor of such equipment, to take 
     possession of such equipment in compliance with a security 
     agreement, lease, or conditional sale contract, and to 
     enforce any of its other rights or remedies, under such 
     security agreement, lease, or conditional sale contract, to 
     sell, lease, or otherwise retain or dispose of such 
     equipment, is not limited or otherwise affected by any other 
     provision of this title or by any power of the court.
       ``(2) The right to take possession and to enforce the other 
     rights and remedies described in paragraph (1) shall be 
     subject to section 362 of this title if--
       ``(A) before the date that is 60 days after the date of the 
     order for relief under this chapter, the trustee, subject to 
     the approval of the court, agrees to perform all obligations 
     of the debtor under such security agreement, lease, or 
     conditional sale contract; and
       ``(B) any default, other than a default of a kind specified 
     in section 365(b)(2) of this title, under such security 
     agreement, lease, or conditional sale contract--
       ``(i) that occurs before the date of the order is cured 
     before the expiration of such 60-day period;
       ``(ii) that occurs after the date of the order and before 
     the expiration of such 60-day period is cured before the 
     later of--
       ``(I) the date that is 30 days after the date of the 
     default; or
       ``(II) the expiration of such 60-day period; and
       ``(iii) that occurs on or after the expiration of such 60-
     day period is cured in compliance with the terms of such 
     security agreement, lease, or conditional sale contract, if a 
     cure is permitted under that agreement, lease, or contract.
       ``(3) The equipment described in this paragraph--
       ``(A) is--
       ``(i) an aircraft, aircraft engine, propeller, appliance, 
     or spare part (as defined in section 40102 of title 49) that 
     is subject to a security interest granted by, leased to, or 
     conditionally sold to a debtor that, at the time such 
     transaction is entered into, holds an air carrier operating 
     certificate issued pursuant to chapter 447 of title 49 for 
     aircraft capable of carrying 10 or more individuals or 6,000 
     pounds or more of cargo; or
       ``(ii) a documented vessel (as defined in section 30101(1) 
     of title 46) that is subject to a security interest granted 
     by, leased to, or conditionally sold to a debtor that is a 
     water carrier that, at the time such transaction is entered 
     into, holds a certificate of public convenience and necessity 
     or permit issued by the Department of Transportation; and

[[Page H9962]]

       ``(B) includes all records and documents relating to such 
     equipment that are required, under the terms of the security 
     agreement, lease, or conditional sale contract, to be 
     surrendered or returned by the debtor in connection with the 
     surrender or return of such equipment.
       ``(4) Paragraph (1) applies to a secured party, lessor, or 
     conditional vendor acting in its own behalf or acting as 
     trustee or otherwise in behalf of another party.
       ``(b) The trustee and the secured party, lessor, or 
     conditional vendor whose right to take possession is 
     protected under subsection (a) may agree, subject to the 
     approval of the court, to extend the 60-day period specified 
     in subsection (a)(1).
       ``(c)(1) In any case under this chapter, the trustee shall 
     immediately surrender and return to a secured party, lessor, 
     or conditional vendor, described in subsection (a)(1), 
     equipment described in subsection (a)(3), if at any time 
     after the date of the order for relief under this chapter 
     such secured party, lessor, or conditional vendor is entitled 
     pursuant to subsection (a)(1) to take possession of such 
     equipment and makes a written demand for such possession to 
     the trustee.
       ``(2) At such time as the trustee is required under 
     paragraph (1) to surrender and return equipment described in 
     subsection (a)(3), any lease of such equipment, and any 
     security agreement or conditional sale contract relating to 
     such equipment, if such security agreement or conditional 
     sale contract is an executory contract, shall be deemed 
     rejected.
       ``(d) With respect to equipment first placed in service on 
     or before October 22, 1994, for purposes of this section--
       ``(1) the term `lease' includes any written agreement with 
     respect to which the lessor and the debtor, as lessee, have 
     expressed in the agreement or in a substantially 
     contemporaneous writing that the agreement is to be treated 
     as a lease for Federal income tax purposes; and
       ``(2) the term `security interest' means a purchase-money 
     equipment security interest.''.

     SEC. 129. DISCHARGE UNDER CHAPTER 13.

       Section 1328(a) of title 11, United States Code, is amended 
     by striking paragraphs (1) through (3) and inserting the 
     following:
       ``(1) provided for under section 1322(b)(5) of this title;
       ``(2) of the kind specified in paragraph (2), (4), (3)(B), 
     (5), (8), or (9) of section 523(a) of this title;
       ``(3) for restitution, or a criminal fine, included in a 
     sentence on the debtor's conviction of a crime; or
       ``(4) for restitution, or damages, awarded in a civil 
     action against the debtor as a result of willful or malicious 
     injury by the debtor that caused personal injury to an 
     individual or the death of an individual.''.

     SEC. 130. BANKRUPTCY JUDGESHIPS.

       (a) Short Title.--This section may be cited as the 
     ``Bankruptcy Judgeship Act of 1998''.
       (b) Temporary Judgeships.--
       (1) Appointments.--The following judgeship positions shall 
     be filled in the manner prescribed in section 152(a)(1) of 
     title 28, United States Code, for the appointment of 
     bankruptcy judges provided for in section 152(a)(2) of such 
     title:
       (A) One additional bankruptcy judgeship for the eastern 
     district of California.
       (B) Four additional bankruptcy judgeships for the central 
     district of California.
       (C) One additional bankruptcy judgeship for the southern 
     district of Florida.
       (D) Two additional bankruptcy judgeships for the district 
     of Maryland.
       (E) One additional bankruptcy judgeship for the eastern 
     district of Michigan.
       (F) One additional bankruptcy judgeship for the southern 
     district of Mississippi.
       (G) One additional bankruptcy judgeship for the district of 
     New Jersey.
       (H) One additional bankruptcy judgeship for the eastern 
     district of New York.
       (I) One additional bankruptcy judgeship for the northern 
     district of New York.
       (J) One additional bankruptcy judgeship for the southern 
     district of New York.
       (K) One additional bankruptcy judgeship for the eastern 
     district of Pennsylvania.
       (L) One additional bankruptcy judgeship for the middle 
     district of Pennsylvania.
       (M) One additional bankruptcy judgeship for the western 
     district of Tennessee.
       (N) One additional bankruptcy judgeship for the eastern 
     district of Virginia.
       (2) Vacancies.--The first vacancy occurring in the office 
     of a bankruptcy judge in each of the judicial districts set 
     forth in paragraph (1) that--
       (A) results from the death, retirement, resignation, or 
     removal of a bankruptcy judge; and
       (B) occurs 5 years or more after the appointment date of a 
     bankruptcy judge appointed under paragraph (1);

     shall not be filled.
       (c) Extensions.--
       (1) In general.--The temporary bankruptcy judgeship 
     positions authorized for the northern district of Alabama, 
     the district of Delaware, the district of Puerto Rico, the 
     district of South Carolina, and the eastern district of 
     Tennessee under section 3(a) (1), (3), (7), (8), and (9) of 
     the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) are 
     extended until the first vacancy occurring in the office of a 
     bankruptcy judge in the applicable district resulting from 
     the death, retirement, resignation, or removal of a 
     bankruptcy judge and occurring--
       (A) 8 years or more after November 8, 1993, with respect to 
     the northern district of Alabama;
       (B) 10 years or more after October 28, 1993, with respect 
     to the district of Delaware;
       (C) 8 years or more after August 29, 1994, with respect to 
     the district of Puerto Rico;
       (D) 8 years or more after June 27, 1994, with respect to 
     the district of South Carolina; and
       (E) 8 years or more after November 23, 1993, with respect 
     to the eastern district of Tennessee.
       (2) Applicability of other provisions.--All other 
     provisions of section 3 of the Bankruptcy Judgeship Act of 
     1992 remain applicable to such temporary judgeship position.
       (d) Technical Amendment.--The first sentence of section 
     152(a)(1) of title 28, United States Code, is amended to read 
     as follows: ``Each bankruptcy judge to be appointed for a 
     judicial district as provided in paragraph (2) shall be 
     appointed by the United States court of appeals for the 
     circuit in which such district is located.''.
       (e) Travel Expenses of Bankruptcy Judges.--Section 156 of 
     title 28, United States Code, is amended by adding at the end 
     the following new subsection:
       ``(g)(1) In this subsection, the term `travel expenses'--
       ``(A) means the expenses incurred by a bankruptcy judge for 
     travel that is not directly related to any case assigned to 
     such bankruptcy judge; and
       ``(B) shall not include the travel expenses of a bankruptcy 
     judge if--
       ``(i) the payment for the travel expenses is paid by such 
     bankruptcy judge from the personal funds of such bankruptcy 
     judge; and
       ``(ii) such bankruptcy judge does not receive funds 
     (including reimbursement) from the United States or any other 
     person or entity for the payment of such travel expenses.
       ``(2) Each bankruptcy judge shall annually submit the 
     information required under paragraph (3) to the chief 
     bankruptcy judge for the district in which the bankruptcy 
     judge is assigned.
       ``(3)(A) Each chief bankruptcy judge shall submit an annual 
     report to the Director of the Administrative Office of the 
     United States Courts on the travel expenses of each 
     bankruptcy judge assigned to the applicable district 
     (including the travel expenses of the chief bankruptcy judge 
     of such district).
       ``(B) The annual report under this paragraph shall 
     include--
       ``(i) the travel expenses of each bankruptcy judge, with 
     the name of the bankruptcy judge to whom the travel expenses 
     apply;
       ``(ii) a description of the subject matter and purpose of 
     the travel relating to each travel expense identified under 
     clause (i), with the name of the bankruptcy judge to whom the 
     travel applies; and
       ``(iii) the number of days of each travel described under 
     clause (ii), with the name of the bankruptcy judge to whom 
     the travel applies.
       ``(4)(A) The Director of the Administrative Office of the 
     United States Courts shall--
       ``(i) consolidate the reports submitted under paragraph (3) 
     into a single report; and
       ``(ii) annually submit such consolidated report to 
     Congress.
       ``(B) The consolidated report submitted under this 
     paragraph shall include the specific information required 
     under paragraph (3)(B), including the name of each bankruptcy 
     judge with respect to clauses (i), (ii), and (iii) of 
     paragraph (3)(B).''.

     SEC. 131. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES 
                   CODE.

       (a) Section 507(a) of title 11, United States Code, is 
     amended by inserting after paragraph (9) the following:
       ``(10) Tenth, allowed claims for death or personal injuries 
     resulting from the operation of a motor vehicle or vessel if 
     such operation was unlawful because the debtor was 
     intoxicated from using alcohol, a drug or another 
     substance.''.
       (b) Section 523(a)(9) of title 11, United States Code, is 
     amended by inserting ``or vessel'' after ``vehicle''.

     SEC. 132. AMENDMENT TO SECTION 1325 OF TITLE 11, UNITED 
                   STATES CODE.

       Section 1325(b)(2) of title 11, United States Code, is 
     amended by inserting after ``received by the debtor'', 
     ``(other than child support payments, foster care payments, 
     or disability payments for a dependent child made in 
     accordance with applicable nonbankruptcy law and which is 
     reasonably necessary to be expended)''.

     SEC. 133. APPLICATION OF THE CODEBTOR STAY ONLY WHEN THE STAY 
                   PROTECTS THE DEBTOR.

       Section 1301(b) of title 11, United States Code, is 
     amended--
       (1) by inserting ``(1)'' after ``(b)''; and
       (2) by adding at the end the following:
       ``(2)(A) Notwithstanding subsection (c) and except as 
     provided in subparagraph (B), in any case in which the debtor 
     did not receive the consideration for the claim held by a 
     creditor, the stay provided by subsection (a) shall apply to 
     that creditor for a period not to exceed 30 days beginning on 
     the date of the order for relief, to the extent the creditor 
     proceeds against--
       ``(i) the individual that received that consideration; or
       ``(ii) property not in the possession of the debtor that 
     secures that claim.
       ``(B) Notwithstanding subparagraph (A), the stay provided 
     by subsection (a) shall apply in any case in which the debtor 
     is primarily obligated to pay the creditor in whole or in 
     part with respect to a claim described in subparagraph (A) 
     under a legally binding separation or property settlement 
     agreement or divorce or dissolution decree with respect to--
       ``(i) an individual described in subparagraph (A)(i); or
       ``(ii) property described in subparagraph (A)(ii).
       ``(3) Notwithstanding subsection (c), the stay provided by 
     subsection (a) shall terminate as of the date of confirmation 
     of the plan, in any case in which the plan of the debtor 
     provides that the debtor's interest in personal property 
     subject to a lease with respect to which the debtor is the 
     lessee will be surrendered or abandoned or no payments will 
     be made under the plan on account of the debtor's obligations 
     under the lease.''.

[[Page H9963]]

     SEC. 134. ADEQUATE PROTECTION FOR INVESTORS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (48) the 
     following:
       ``(48A) `securities self regulatory organization' means 
     either a securities association registered with the 
     Securities and Exchange Commission pursuant to section 15A of 
     the Securities Exchange Act of 1934 or a national securities 
     exchange registered with the Securities and Exchange 
     Commission pursuant to section 6 of the Securities Exchange 
     Act of 1934;''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by section 120, is amended--
       (1) in paragraph (19) by striking ``or'' at the end;
       (2) in paragraph (20) by striking the period at the end and 
     a inserting ``; or''; and
       (3) by inserting after paragraph (20) the following:
       ``(21) under subsection (a), of the commencement or 
     continuation of an investigation or action by a securities 
     self regulatory organization to enforce such organization's 
     regulatory power; of the enforcement of an order or decision, 
     other than for monetary sanctions, obtained in an action by 
     the securities self regulatory organization to enforce such 
     organization's regulatory power; or of any act taken by the 
     securities self regulatory organization to delist, delete, or 
     refuse to permit quotation of any stock that does not meet 
     applicable regulatory requirements.''.

     SEC. 135. LIMITATION ON LUXURY GOODS.

       Section 523(a)(2)(C) of title 11, United States Code, is 
     amended to read as follows:
       ``(C)(i) for purposes of subparagraph (A), consumer debts 
     owed to a single creditor and aggregating more than $250 for 
     `luxury goods or services' incurred by an individual debtor 
     on or within 90 days before the order for relief under this 
     title, or cash advances aggregating more than $250 that are 
     extensions of consumer credit under an open end credit plan 
     obtained by an individual debtor on or within 90 days before 
     the order for relief under this title, are presumed to be 
     nondischargeable; and
       ``(ii) for purposes of this subparagraph--
       ``(I) the term `luxury goods or services' does not include 
     goods or services reasonably necessary for the support or 
     maintenance of the debtor or a dependent of the debtor; and
       ``(II) the term `an extension of consumer credit under an 
     open end credit plan' has the same meaning such term has for 
     purposes of the Consumer Credit Protection Act;''.

     SEC. 136. GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL 
                   PROPERTY BY ASSUMPTION.

       Section 365 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(p)(1) If a lease of personal property is rejected or not 
     timely assumed by the trustee under subsection (d), the 
     leased property is no longer property of the estate and the 
     stay under section 362(a) of this title is automatically 
     terminated.
       ``(2) In the case of an individual under chapter 7, the 
     debtor may notify the creditor in writing that the debtor 
     desires to assume the lease. Upon being so notified, the 
     creditor may, at its option, notify the debtor that it is 
     willing to have the lease assumed by the debtor and may 
     condition such assumption on cure of any outstanding default 
     on terms set by the contract. If within 30 days of such 
     notice the debtor notifies the lessor in writing that the 
     lease is assumed, the liability under the lease will be 
     assumed by the debtor and not by the estate. The stay under 
     section 362 of this title and the injunction under section 
     524(a)(2) of this title shall not be violated by notification 
     of the debtor and negotiation of cure under this subsection.
       ``(3) In a case under chapter 11 of this title in which the 
     debtor is an individual and in a case under chapter 13 of 
     this title, if the debtor is the lessee with respect to 
     personal property and the lease is not assumed in the plan 
     confirmed by the court, the lease is deemed rejected as of 
     the conclusion of the hearing on confirmation. If the lease 
     is rejected, the stay under section 362 of this title and any 
     stay under section 1301 is automatically terminated with 
     respect to the property subject to the lease.''.

     SEC. 137. ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY 
                   SECURED CREDITORS.

       (a) In General.--Chapter 13 of title 11, United States 
     Code, is amended by adding after section 1307 the following:

     ``Sec. 1307A. Adequate protection in chapter 13 cases

       ``(a)(1)(A) On or before the date that is 30 days after the 
     filing of a case under this chapter, the debtor shall make 
     cash payments in an amount determined under paragraph (2)(A), 
     to--
       ``(i) any lessor of personal property; and
       ``(ii) any creditor holding a claim secured by personal 
     property to the extent that the claim is attributable to the 
     purchase of that property by the debtor.
       ``(B) The debtor or the plan shall continue making the 
     adequate protection payments until the earlier of the date on 
     which--
       ``(i) the creditor begins to receive actual payments under 
     the plan; or
       ``(ii) the debtor relinquishes possession of the property 
     referred to in subparagraph (A) to--
       ``(I) the lessor or creditor; or
       ``(II) any third party acting under claim of right, as 
     applicable.
       ``(2) The payments referred to in paragraph (1)(A) shall be 
     the contract amount.
       ``(b)(1) Subject to the limitations under paragraph (2), 
     the court may, after notice and hearing, change the amount 
     and timing of the dates of payment of payments made under 
     subsection (a).
       ``(2)(A) The payments referred to in paragraph (1) shall be 
     payable not less frequently than monthly.
       ``(B) The amount of payments referred to in paragraph (1) 
     shall not be less than the amount of any weekly, biweekly, 
     monthly, or other periodic payment schedules as payable under 
     the contract between the debtor and creditor.
       ``(c) Notwithstanding section 1326(b), the payments 
     referred to in subsection (a)(1)(A) shall be continued in 
     addition to plan payments under a confirmed plan until actual 
     payments to the creditor begin under that plan, if the 
     confirmed plan provides--
       ``(1) for payments to a creditor or lessor described in 
     subsection (a)(1); and
       ``(2) for the deferral of payments to such creditor or 
     lessor under the plan until the payment of amounts described 
     in section 1326(b).
       ``(d) Notwithstanding sections 362, 542, and 543, a lessor 
     or creditor described in subsection (a) may retain possession 
     of property described in that subsection that was obtained in 
     accordance with applicable law before the date of filing of 
     the petition until the first payment under subsection 
     (a)(1)(A) is received by the lessor or creditor.
       ``(e) On or before 60 days after the filling of a case 
     under this chapter, a debtor retaining possession of personal 
     property subject to a lease or securing a claim attributable 
     in whole or in part to the purchase price of such property 
     shall provide each creditor or lessor reasonable evidence of 
     the maintenance of any required insurance coverage with 
     respect to the use or ownership of such property and continue 
     to do so for so long as the debtor retains possession of such 
     property.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 13 of title 11, United States Code, is 
     amended by inserting after the item relating to section 1307 
     the following:

``1307A. Adequate protection in chapter 13 cases.''.

     SEC. 139. AUTOMATIC STAY.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 120 and 134, is amended--
       (1) in paragraph (20), by striking ``or'' at the end;
       (2) in paragraph (21), by striking the period at the end 
     and inserting a semicolon; and
       (3) by inserting after paragraph (21) the following:
       ``(22) under subsection (a) of any transfer that is not 
     avoidable under section 544 of this title and that is not 
     avoidable under section 549 of this title;
       ``(23) under subsection (a)(3), of the continuation of any 
     eviction, unlawful detainer action, or similar proceeding by 
     a lessor against a debtor involving residential real property 
     in which the debtor resides as a tenant under a rental 
     agreement and the debtor has not paid rent to the lessor 
     pursuant to the terms of the lease agreement or applicable 
     State law after the commencement and during the course of the 
     case;
       ``(24) under subsection (a)(3), of the commencement or 
     continuation of any eviction, unlawful detainer action, or 
     similar proceeding by a lessor against a debtor involving 
     residential real property in which the debtor resides as a 
     tenant under a rental agreement that has terminated pursuant 
     to the lease agreement or applicable State law;
       ``(25) under subsection (a)(3), of any eviction, unlawful 
     detainer action, or similar proceeding, if the debtor has 
     previously filed within the last year and failed to pay post-
     petition rent during the course of that case; or
       ``(26) under subsection (a)(3), of eviction actions based 
     on endangerment to property or person or the use of illegal 
     drugs.''.

     SEC. 140. EXTEND PERIOD BETWEEN BANKRUPTCY DISCHARGES.

       Title 11, United States Code, is amended--
       (1) in section 727(a)(8) by striking ``six'' and inserting 
     ``8''; and
       (2) in section 1328 by adding at the end the following:
       ``(f) Notwithstanding subsections (a) and (b), the court 
     shall not grant a discharge of all debts provided for by the 
     plan or disallowed under section 502 of this title if the 
     debtor has received a discharge in any case filed under this 
     title within 5 years of the order for relief under this 
     chapter.''.

     SEC. 141. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

       Section 101 of title 11, United States Code, is amended--
       (1) by striking paragraph (12A); and
       (2) by inserting after paragraph (14) the following:
     (14A) `domestic support obligation' means a debt that accrues 
     before or after the entry of an order for relief under this 
     title that is--
       ``(A) owed to or recoverable by--
       ``(i) a spouse, former spouse, or child of the debtor or 
     that child's legal guardian; or
       ``(ii) a governmental unit;
       ``(B) in the nature of alimony, maintenance, or support 
     (including assistance provided by a governmental unit) of 
     such spouse, former spouse, or child, without regard to 
     whether such debt is expressly so designated;
       ``(C) established or subject to establishment before or 
     after entry of an order for relief under this title, by 
     reason of applicable provisions of--
       ``(i) a separation agreement, divorce decree, or property 
     settlement agreement;
       ``(ii) an order of a court of record; or
       ``(iii) a determination made in accordance with applicable 
     nonbankruptcy law by a governmental unit; and
       ``(D) not assigned to a nongovernmental entity, unless that 
     obligation is assigned voluntarily by the spouse, former 
     spouse, child, or parent solely for the purpose of collecting 
     the debt.''.

     SEC. 142. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT 
                   OBLIGATIONS.

       Section 507(a) of title 11, United States Code, is 
     amended--

[[Page H9964]]

       (1) by striking paragraph (7);
       (2) by redesignating paragraphs (1) through (6) as 
     paragraphs (2) through (7), respectively;
       (3) in paragraph (2), as redesignated, by striking 
     ``First'' and inserting ``Second'';
       (4) in paragraph (3), as redesignated, by striking 
     ``Second'' and inserting ``Third'';
       (5) in paragraph (4), as redesignated, by striking 
     ``Third'' and inserting ``Fourth'';
       (6) in paragraph (5), as redesignated, by striking 
     ``Fourth'' and inserting ``Fifth'';
       (7) in paragraph (6), as redesignated, by striking 
     ``Fifth'' and inserting ``Sixth'';
       (8) in paragraph (7), as redesignated, by striking 
     ``Sixth'' and inserting ``Seventh''; and
       (9) by inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) First, allowed claims for domestic support 
     obligations to be paid in the following order on the 
     condition that funds received under this paragraph by a 
     governmental unit in a case under this title be applied:
       ``(A) Claims that, as of the date of entry of the order for 
     relief, are owed directly to a spouse, former spouse, or 
     child of the debtor, or the parent of such child, without 
     regard to whether the claim is filed by the spouse, former 
     spouse, child, or parent, or is filed by a governmental unit 
     on behalf of that person.
       ``(B) Claims that, as of the date of entry of the order for 
     relief, are assigned by a spouse, former spouse, child of the 
     debtor, or the parent of that child to a governmental unit or 
     are owed directly to a governmental unit under applicable 
     nonbankruptcy law.''.

     SEC. 143. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE 
                   IN CASES INVOLVING DOMESTIC SUPPORT 
                   OBLIGATIONS.

       Title 11, United States Code, is amended--
       (1) in section 1129(a), by adding at the end the following:
       ``(14) If the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order or statute for such obligation that become payable 
     after the date on which the petition is filed.'';
       (2) in section 1325(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) if the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order for such obligation that become payable after the 
     date on which the petition is filed.''; and
       (3) in section 1328(a), as amended by section 129, in the 
     matter preceding paragraph (1), by inserting ``, and with 
     respect to a debtor who is required by a judicial or 
     administrative order to pay a domestic support obligation, 
     certifies that all amounts payable under such order or 
     statute that are due on or before the date of the 
     certification (including amounts due before or after the 
     petition was filed) have been paid'' after ``completion by 
     the debtor of all payments under the plan''.

     SEC. 144. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT 
                   OBLIGATION PROCEEDINGS.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 120, 134, and 139, is amended--
       (1) by striking paragraph (2) and inserting the following:
       ``(2) under subsection (a)--
       ``(A) of the commencement or continuation of an action or 
     proceeding for--
       ``(i) the establishment of paternity as a part of an effort 
     to collect domestic support obligations; or
       ``(ii) the establishment or modification of an order for 
     domestic support obligations; or
       ``(B) the collection of a domestic support obligation from 
     property that is not property of the estate;'';
       (2) in paragraph (25), by striking ``or'' at the end;
       (3) in paragraph (26), by striking the period at the end 
     and inserting a semicolon; and
       (4) by inserting after paragraph (26) the following:
       ``(27) under subsection (a) with respect to the withholding 
     of income pursuant to an order as specified in section 466(b) 
     of the Social Security Act (42 U.S.C. 666(b)); or
       ``(28) under subsection (a) with respect to--
       ``(A) the withholding, suspension, or restriction of 
     drivers' licenses, professional and occupational licenses, 
     and recreational licenses pursuant to State law, as specified 
     in section 466(a)(16) of the Social Security Act (42 
     U.S.C. 666(a)(16)) or with respect to the reporting of 
     overdue support owed by an absent parent to any consumer 
     reporting agency as specified in section 466(a)(7) of the 
     Social Security Act (42 U.S.C. 666(a)(7));
       ``(B) the interception of tax refunds, as specified in 
     sections 464 and 466(a)(3) of the Social Security Act (42 
     U.S.C. 664 and 666(a)(3)); or
       ``(C) the enforcement of medical obligations as specified 
     under title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.).''.

     SEC. 145. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY, 
                   MAINTENANCE, AND SUPPORT.

       Section 523 of title 11, United States Code, is amended--
       (1) in subsection (a), by striking paragraph (5) and 
     inserting the following:
       ``(5) for a domestic support obligation;'';
       (2) in subsection (c), by striking ``(6), or (15)'' and 
     inserting ``or (6)''; and
       (3) in paragraph (15), by striking ``governmental unit'' 
     and all through the end of the paragraph and inserting a 
     semicolon.

     SEC. 146. CONTINUED LIABILITY OF PROPERTY.

       Section 522 of title 11, United States Code, is amended--
       (1) in subsection (c), by striking paragraph (1) and 
     inserting the following:
       ``(1) a debt of a kind specified in paragraph (1) or (5) of 
     section 523(a) (in which case, notwithstanding any provision 
     of applicable nonbankruptcy law to the contrary, such 
     property shall be liable for a debt of a kind specified in 
     section 523(a)(5);''; and
       (2) in subsection (f)(1)(A), by striking the dash and all 
     that follows through the end of the subparagraph and 
     inserting ``of a kind that is specified in section 523(a)(5); 
     or''.

     SEC. 147. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST 
                   PREFERENTIAL TRANSFER MOTIONS.

       Section 547(c)(7) of title 11, United States Code, is 
     amended to read as follows:
       ``(7) to the extent such transfer was a bona fide payment 
     of a debt for a domestic support obligation; or''.

     SEC. 148. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

       Section 522(f)(1)(B) of title 11, United States Code, is 
     amended as follows:
       (1) by inserting ``(i)'' after ``(B)''; and
       (2) by striking ``(i)'' and inserting ``(aa)''; and
       (3) by striking ``(ii)'' and inserting ``(bb)'';
       (4) by striking ``(iii)'' and inserting ``(cc)'';
       (5) by adding at the end thereof the following:
       ``(ii) `household goods' shall mean for the purposes of 
     this subparagraph (B) clothing; furniture; appliances; one 
     radio; one television; one VCR; linens; china; crockery; 
     kitchenware; educational materials and educational equipment 
     primarily for the use of minor dependent children of the 
     debtor, but only one personal computer only if used primarily 
     for the education or entertainment of such minor children; 
     medical equipment and supplies; furniture exclusively for the 
     use of minor children, elderly or disabled dependents of the 
     debtor; and personal effects (including wedding rings and the 
     toys and hobby equipment of minor dependent children) of the 
     debtor and his or her dependents: Provided, That the 
     following are not included within the scope of the term 
     `household goods':
       ``(aa) works of art (unless by or of the debtor or his or 
     her dependents);
       ``(bb) electronic entertainment equipment (except one 
     television, one radio, and one VCR);
       ``(cc) items acquired as antiques;
       ``(dd) jewelry (except wedding rings);
       ``(ee) a computer (except as otherwise provided for in this 
     section), motor vehicle (including a tractor or lawn 
     tractor), boat, or a motorized recreational device, 
     conveyance, vehicle, watercraft, or aircraft.''.

     SEC. 149. NONDISCHARGEABLE DEBTS.

       Section 523(a) of title 11, United States Code, is amended 
     by inserting after paragraph (14) the following:
       ``(14A) incurred to pay a debt that is nondischargeable by 
     reason of section 727, 1141, 1228(a), 1228(b), or 1328(b), or 
     any other provision of this subsection, if the debtor 
     incurred the debt to pay such a nondischargeable debt with 
     the intent to discharge in bankruptcy the newly-created debt, 
     except that all debts incurred to pay nondischargeable debts, 
     without regard to intent, are nondischargeable if incurred 
     within 90 days of the filing of the petition;''.

                TITLE II--DISCOURAGING BANKRUPTCY ABUSE

     SEC. 201. REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--Chapter 12 of title 11 of the United 
     States Code, as in effect on September 30, 1998, is hereby 
     reenacted.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 1998.

     SEC. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.

       Section 341 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) Notwithstanding subsections (a) and (b), the court, 
     on the request of a party in interest and after notice and a 
     hearing, for cause may order that the United States trustee 
     not convene a meeting of creditors or equity security holders 
     if the debtor has filed a plan as to which the debtor 
     solicited acceptances prior to the commencement of the 
     case.''.

     SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

       (a) In General.--Section 522 of title 11, United States 
     Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)--
       (i) by striking ``(2)(A) any property'' and inserting:
       ``(3) Property listed in this paragraph is--
       ``(A) any property'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(C) retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.'';
       (B) by striking paragraph (1) and inserting:
       ``(2) Property listed in this paragraph is property that is 
     specified under subsection (d), unless the State law that is 
     applicable to the debtor under paragraph (3)(A) specifically 
     does not so authorize.'';
       (C) in the matter preceding paragraph (2)--
       (i) by striking ``(b)'' and inserting ``(b)(1)'';
       (ii) by striking ``paragraph (2)'' both places it appears 
     and inserting ``paragraph (3)'';
       (iii) by striking ``paragraph (1)'' each place it appears 
     and inserting ``paragraph (2)''; and
       (iv) by striking ``Such property is--''; and
       (D) by adding at the end of the subsection the following:
       ``(4) For purposes of paragraph (3)(C), the following shall 
     apply:

[[Page H9965]]

       ``(A) If the retirement funds are in a retirement fund that 
     has received a favorable determination pursuant to section 
     7805 of the Internal Revenue Code of 1986, and that 
     determination is in effect as of the date of the commencement 
     of the case under section 301, 302, or 303 of this title, 
     those funds shall be presumed to be exempt from the estate.
       ``(B) If the retirement funds are in a retirement fund that 
     has not received a favorable determination pursuant to such 
     section 7805, those funds are exempt from the estate if the 
     debtor demonstrates that--
       ``(i) no prior determination to the contrary has been made 
     by a court or the Internal Revenue Service; and
       ``(ii) the retirement fund is in substantial compliance 
     with the applicable requirements of the Internal Revenue Code 
     of 1986.
       ``(C) A direct transfer of retirement funds from 1 fund or 
     account that is exempt from taxation under section 401, 403, 
     408, 408A, 414, 457, or 501(a) of the Internal Revenue Code 
     of 1986, pursuant to section 401(a)(31) of the Internal 
     Revenue Code of 1986, or otherwise, shall not cease to 
     qualify for exemption under paragraph (3)(C) by reason of 
     that direct transfer.
       ``(D)(i) Any distribution that qualifies as an eligible 
     rollover distribution within the meaning of section 402(c) of 
     the Internal Revenue Code of 1986 or that is described in 
     clause (ii) shall not cease to qualify for exemption under 
     paragraph (3)(C) by reason of that distribution.
       ``(ii) A distribution described in this clause is an amount 
     that--
       ``(I) has been distributed from a fund or account that is 
     exempt from taxation under section 401, 403, 408, 408A, 414, 
     457, or 501(a) of the Internal Revenue Code of 1986; and
       ``(II) to the extent allowed by law, is deposited in such a 
     fund or account not later than 60 days after the distribution 
     of that amount.''; and
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``subsection (b)(1)'' and inserting ``subsection (b)(2)''; 
     and
       (B) by adding at the end the following:
       ``(12) Retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by sections 120, 134, 139, and 144 is 
     amended--
       (1) in paragraph (27), by striking ``or'' at the end;
       (2) in paragraph (28), by striking the period and inserting 
     ``; or'';
       (3) by inserting after paragraph (28) the following:
       ``(29) under subsection (a), of withholding of income from 
     a debtor's wages and collection of amounts withheld, pursuant 
     to the debtor's agreement authorizing that withholding and 
     collection for the benefit of a pension, profit-sharing, 
     stock bonus, or other plan established under section 401, 
     403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue 
     Code of 1986 that is sponsored by the employer of the debtor, 
     or an affiliate, successor, or predecessor of such employer--
       ``(A) to the extent that the amounts withheld and collected 
     are used solely for payments relating to a loan from a plan 
     that satisfies the requirements of section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974 or is subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) in the case of a loan from a thrift savings plan 
     described in subchapter III of title 5, that satisfies the 
     requirements of section 8433(g) of such title.''; and
       (4) by adding at the end of the flush material following 
     paragraph (19) the following: ``Paragraph (19) does not apply 
     to any amount owed to a plan referred to in that paragraph 
     that is incurred under a loan made during the 1-year period 
     preceding the filing of a petition. Nothing in paragraph (19) 
     may be construed to provide that any loan made under a 
     governmental plan under section 414(d), or a contract or 
     account under section 403(b), of the Internal Revenue Code of 
     1986 constitutes a claim or a debt under this title.''.
       (c) Exceptions To Discharge.--Section 523(a) of title 11, 
     United States Code, is amended--
       (1) by striking ``or'' at the end of paragraph (17);
       (2) by striking the period at the end of paragraph (18) and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(19) owed to a pension, profit-sharing, stock bonus, or 
     other plan established under section 401, 403, 408, 408A, 
     414, 457, or 501(c) of the Internal Revenue Code of 1986, 
     pursuant to--
       ``(A) a loan permitted under section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974) or subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) a loan from the thrift savings plan described in 
     subchapter III of title 5, that satisfies the requirements of 
     section 8433(g) of such title.
     Paragraph (19) does not apply to any amount owed to a plan 
     referred to in that paragraph that is incurred under a loan 
     made during the 1-year period preceding the filing of a 
     petition. Nothing in paragraph (19) may be construed to 
     provide that any loan made under a governmental plan under 
     section 414(d), or a contract or account under section 
     403(b), of the Internal Revenue Code of 1986 constitutes a 
     claim or a debt under this title.''.
       (d) Plan Contents.--Section 1322 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(f) A plan may not materially alter the terms of a loan 
     described in section 362(b)(19) of this title.''.

     SEC. 204. PROTECTION OF REFINANCE OF SECURITY INTEREST.

       Subparagraphs (A), (B), and (C) of section 547(e)(2) of 
     title 11, United States Code, are amended by striking ``10'' 
     each place it appears and inserting ``30''.

     SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

       Section 365(d)(4) of title 11, United States Code, is 
     amended to read as follows:
       ``(4)(A) Subject to subparagraph (B), in any case under any 
     chapter of this title, an unexpired lease of nonresidential 
     real property under which the debtor is the lessee shall be 
     deemed rejected and the trustee shall immediately surrender 
     that nonresidential real property to the lessor if the 
     trustee does not assume or reject the unexpired lease by the 
     earlier of--
       ``(i) the date that is 180 days after the date of the order 
     for relief; or
       ``(ii) the date of the entry of an order confirming a plan.
       ``(B) The court may extend the period determined under 
     subparagraph (A) only upon a motion of the lessor.''.

     SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

       Section 1102(a)(2) of title 11, United States Code, is 
     amended by inserting before the first sentence the following: 
     ``On its own motion or on request of a party in interest, and 
     after notice and hearing, the court may order a change in the 
     membership of a committee appointed under this subsection, if 
     the court determines that the change is necessary to ensure 
     adequate representation of creditors or equity security 
     holders.''.

     SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES 
                   CODE.

       Section 546 of title 11, United States Code, is amended by 
     inserting at the end thereof:
       ``(I) Notwithstanding section 545 (2) and (3) of this 
     title, the trustee may not avoid a warehouseman's lien for 
     storage, transportation or other costs incidental to the 
     storage and handling of goods, as provided by section 7-209 
     of the Uniform Commercial Code.''.

     SEC. 208. LIMITATION.

       Section 546(c)(1)(B) of title 11, United States Code, is 
     amended by striking ``20'' and inserting ``45''.

     SEC. 209. AMENDMENT TO SECTION 330(A) OF TITLE 11, UNITED 
                   STATES CODE.

       Section 330(a) of title 11, United States Code, is 
     amended--
       (1) in subsection (3)(A) after the word ``awarded'', by 
     inserting ``to an examiner, chapter 11 trustee, or 
     professional person''; and
       (2) by adding at the end of subsection (3)(A) the 
     following:
       ``(3)(B) In determining the amount of reasonable 
     compensation to be awarded a trustee, the court shall treat 
     such compensation as a commission based on the results 
     achieved.''.

     SEC. 210. POSTPETITION DISCLOSURE AND SOLICITATION.

       Section 1125 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(g) Notwithstanding subsection (b), an acceptance or 
     rejection of the plan may be solicited from a holder of a 
     claim or interest if such solicitation complies with 
     applicable nonbankruptcy law and if such holder was solicited 
     before the commencement of the case in a manner complying 
     with applicable nonbankruptcy law.''.

     SEC. 211. PREFERENCES.

       Section 547(c) of title 11, United States Code, is 
     amended--
       (1) by amending paragraph (2) to read as follows:
       ``(2) to the extent that such transfer was in payment of a 
     debt incurred by the debtor in the ordinary course of 
     business or financial affairs of the debtor and the 
     transferee, and such transfer was--
       ``(A) made in the ordinary course of business or financial 
     affairs of the debtor and the transferee; or
       ``(B) made according to ordinary business terms;'';
       (2) in paragraph (7) by striking ``or'' at the end;
       (3) in paragraph (8) by striking the period at the end and 
     inserting ``; or''; and
       (4) by adding at the end the following:
       ``(9) if, in a case filed by a debtor whose debts are not 
     primarily consumer debts, the aggregate value of all property 
     that constitutes or is affected by such transfer is less than 
     $5000.''.

     SEC. 212. VENUE OF CERTAIN PROCEEDINGS.

       Section 1409(b) of title 28, United States Code, is amended 
     by inserting ``, or a nonconsumer debt against a noninsider 
     of less than $10,000,'' after ``$5,000''.

     SEC. 213. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

       Section 1121(d) of title 11, United States Code, is 
     amended--
       (1) by striking ``On'' and inserting ``(1) Subject to 
     paragraph (1), on''; and
       (2) by adding at the end the following:
       ``(2)(A) Such 120-day period may not be extended beyond a 
     date that is 18 months after the date of the order for relief 
     under this chapter.
       ``(B) Such 180-day period may not be extended beyond a date 
     that is 20 months after the date of the order for relief 
     under this chapter.''.

     SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

       Section 523(a)(16) of title 11, United States Code, is 
     amended--
       (1) by striking ``dwelling'' the first place it appears;
       (2) by striking ``ownership or'' and inserting 
     ``ownership,'';
       (3) by striking ``housing'' the first place it appears; and
       (4) by striking ``but only'' and all that follows through 
     ``such period,'', and inserting ``or a lot in a homeowners 
     association, for as long as the

[[Page H9966]]

     debtor or the trustee has a legal, equitable, or possessory 
     ownership interest in such unit, such corporation, or such 
     lot, and until such time as the debtor or trustee has 
     surrendered any legal, equitable or possessory interest in 
     such unit, such corporation, or such lot,''.

     SEC. 215. CLAIMS RELATING TO INSURANCE DEPOSITS IN CASES 
                   ANCILLARY TO FOREIGN PROCEEDINGS.

       Section 304 of title 11, United States Code, is amended to 
     read as follows:

     ``Sec. 304. Cases ancillary to foreign proceedings

       ``(a) For purposes of this section--
       ``(1) the term `domestic insurance company' means a 
     domestic insurance company, as such term is used in section 
     109(b)(2);
       ``(2) the term `foreign insurance company' means a foreign 
     insurance company, as such term is used in section 109(b)(3);
       ``(3) the term `United States claimant' means a beneficiary 
     of any deposit referred to in subsection (b) or any 
     multibeneficiary trust referred to in subsection (b);
       ``(4) the term `United States creditor' means, with respect 
     to a foreign insurance company--
       ``(i) a United States claimant; or
       ``(ii) any business entity that operates in the United 
     States and that is a creditor; and
       ``(5) the term `United States policyholder' means a holder 
     of an insurance policy issued in the United States.
       ``(b) The court may not grant relief under chapter 15 of 
     this title with respect to any deposit, escrow, trust fund, 
     or other security required or permitted under any applicable 
     State insurance law or regulation for the benefit of claim 
     holders in the United States.''.

     SEC. 215. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

       (a) Executory Contracts and Unexpired Leases.--Section 365 
     of title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)(A) by striking the semicolon at the 
     end and inserting the following:
     ``other than a default that is a breach of a provision 
     relating to--
       ``(i) the satisfaction of any provision (other than a 
     penalty rate or penalty provision) relating to a default 
     arising from any failure to perform nonmonetary obligations 
     under an unexpired lease of real property (excluding 
     executory contracts that transfer a right or interest under a 
     filed or issued patent, copyright, trademark, trade dress, or 
     trade secret), if it is impossible for the trustee to cure 
     such default by performing nonmonetary acts at and after the 
     time of assumption; or
       ``(ii) the satisfaction of any provision (other than a 
     penalty rate or penalty provision) relating to a default 
     arising from any failure to perform nonmonetary obligations 
     under an executory contract, if it is impossible for the 
     trustee to cure such default by performing nonmonetary acts 
     at and after the time of assumption and if the court 
     determines, based on the equities of the case, that this 
     subparagraph should not apply with respect to such 
     default;''; and
       (B) by amending paragraph (2)(D) to read as follows:
       ``(D) the satisfaction of any penalty rate or penalty 
     provision relating to a default arising from a failure to 
     perform nonmonetary obligations under an executory contract 
     (excluding executory contracts that transfer a right or 
     interest under a filed or issued patent, copyright, 
     trademark, trade dress, or trade secret) or under an 
     unexpired lease of real or personal property.'';
       (2) in subsection (c)--
       (A) in paragraph (2) by adding ``or'' at the end;
       (B) in paragraph (3) by striking ``; or'' at the end and 
     inserting a period; and
       (C) by striking paragraph (4);
       (3) in subsection (d)--
       (A) by striking paragraphs (5) through (9); and
       (B) by redesignating paragraph (10) as paragraph(5); and
       (4) in subsection (f)(1) by striking ``; except that'' and 
     all that follows through the end of the paragraph and 
     inserting a period.
       (b) Impairment of Claims or Interests.--Section 1124(2) of 
     title 11, United States Code, is amended--
       (1) in subparagraph (A) by inserting ``or of a kind that 
     section 365(b)(1)(A) of this title expressly does not require 
     to be cured'' before the semicolon at the end;
       (2) in subparagraph (C) by striking ``and'' at the end;
       (3) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (4) by inserting after subparagraph (C) the following:
       ``(D) if such claim or such interest arises from any 
     failure to perform a nonmonetary obligation, compensates the 
     holder of such claim or such interest (other than the debtor 
     or an insider) for any actual pecuniary loss incurred by such 
     holder as a result of such failure; and''.

           TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS

     SEC. 301. DEFINITION OF DISINTERESTED PERSON.

       Section 101(14) of title 11, United States Code, is amended 
     to read as follows:
       ``(14) `disinterested person' means a person that--
       ``(A) is not a creditor, an equity security holder, or an 
     insider;
       ``(B) is not and was not, within 2 years before the date of 
     the filing of the petition, a director, officer, or employee 
     of the debtor; and
       ``(C) does not have an interest materially adverse to the 
     interest of the estate or of any class of creditors or equity 
     security holders, by reason of any direct or indirect 
     relationship to, connection with, or interest in, the debtor, 
     or for any other reason;''.

     SEC. 302. MISCELLANEOUS IMPROVEMENTS.

       (a) Who May Be a Debtor.--Section 109 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(h)(1) Subject to paragraphs (2) and (3) and 
     notwithstanding any other provision of this section, an 
     individual may not be a debtor under this title unless that 
     individual has, during the 90-day period preceding the date 
     of filing of the petition of that individual, received credit 
     counseling, including, at a minimum, participation in an 
     individual or group briefing that outlined the opportunities 
     for available credit counseling and assisted that individual 
     in performing an initial budget analysis, through a credit 
     counseling program (offered through an approved credit 
     counseling service described in section 111(a)).
       ``(2)(A) Paragraph (1) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee or bankruptcy administrator of the bankruptcy court 
     of that district determines that the approved credit 
     counseling services for that district are not reasonably able 
     to provide adequate services to the additional individuals 
     who would otherwise seek credit counseling from those 
     programs by reason of the requirements of paragraph (1).
       ``(B) Each United States trustee or bankruptcy 
     administrator that makes a determination described in 
     subparagraph (A) shall review that determination not later 
     than one year after the date of that determination, and not 
     less frequently than every year thereafter.
       ``(3)(A) Subject to subparagraph (B), the requirements of 
     paragraph (1) shall not apply with respect to a debtor who 
     submits to the court a certification that--
       ``(i) describes exigent circumstances that merit a waiver 
     of the requirements of paragraph (1);
       ``(ii) states that the debtor requested credit counseling 
     services from an approved credit counseling service, but was 
     unable to obtain the services referred to in paragraph (1) 
     during the 5-day period beginning on the date on which the 
     debtor made that request; and
       ``(iii) is satisfactory to the court.
       ``(B) With respect to a debtor, an exemption under 
     subparagraph (A) shall cease to apply to that debtor on the 
     date on which the debtor meets the requirements of paragraph 
     (1), but in no case may the exemption apply to that debtor 
     after the date that is 30 days after the debtor files a 
     petition.''.
       (b) Chapter 7 Discharge.--Section 727(a) of title 11, 
     United States Code, is amended--
       (1) in paragraph (9), by striking ``or'' at the end;
       (2) in paragraph (10), by striking the period and inserting 
     ``; or''; and
       (3) by adding at the end the following:
       ``(11) after the filing of the petition, the debtor failed 
     to complete an instructional course concerning personal 
     financial management described in section 111.''.
       (c) Chapter 13 Discharge.--Section 1328 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(f) The court shall not grant a discharge under this 
     section to a debtor, unless after filing a petition the 
     debtor has completed an instructional course concerning 
     personal financial management described in section 111.
       ``(g) Subsection (f) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee or bankruptcy administrator of the bankruptcy court 
     of that district determines that the approved instructional 
     courses are not adequate to service the additional 
     individuals who would be required to complete the 
     instructional course by reason of the requirements of this 
     section.
       ``(h) Each United States trustee or bankruptcy 
     administrator that makes a determination described in 
     subsection (g) shall review that determination not later than 
     1 year after the date of that determination, and not less 
     frequently than every year thereafter.
       (d) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 121, 604, and 122, is 
     amended by adding at the end the following:
       ``(d) In addition to the requirements under subsection (a), 
     an individual debtor shall file with the court--
       ``(1) a certificate from the credit counseling service that 
     provided the debtor services under section 109(h); and
       ``(2) a copy of the debt repayment plan, if any, developed 
     under section 109(h) through the credit counseling service 
     referred to in paragraph (1).''.
       (e) Exceptions to Discharge.--Section 523(d) of title 11, 
     United States Code, as amended by section 202 of this Act, is 
     amended by striking paragraph (3)(A)(i) and inserting the 
     following:
       ``(i) within the applicable period of time prescribed under 
     section 109(h), the debtor received credit counseling through 
     a credit counseling program in accordance with section 
     109(h); and''.
       (f) General Provisions.--
       (1) In general.--Chapter 1 of title 11, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 111. Credit counseling services; financial management 
       instructional courses

       ``(a) The clerk of each district shall maintain a list of 
     credit counseling services that provide 1 or more programs 
     described in section 109(h) and a list of instructional 
     courses concerning personal financial management that have 
     been approved by--
       ``(1) the United States trustee; or
       ``(2) the bankruptcy administrator for the district.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 1 of title 11, United States Code, is 
     amended by adding at the end the following:

``111. Credit counseling services; financial management instructional 
              courses.''.

[[Page H9967]]

       (g) Definitions.--Section 101 of title 11, United States 
     Code, as amended by section 317 of this Act, is amended--
       (1) by inserting after paragraph (13) the following:
       ``(13A) `debtor's principal residence'--
       ``(A) means a residential structure, including incidental 
     property, without regard to whether that structure is 
     attached to real property; and
       ``(B) includes an individual condominium or cooperative 
     unit;''; and
       (2) by inserting after paragraph (27A), as added by section 
     318 of this Act, the following:
       ``(27B) `incidental property' means, with respect to a 
     debtor's principal residence--
       ``(A) property commonly conveyed with a principal residence 
     in the area where the real estate is located;
       ``(B) all easements, rights, appurtenances, fixtures, 
     rents, royalties, mineral rights, oil or gas rights or 
     profits, water rights, escrow funds, or insurance proceeds; 
     and
       ``(C) all replacements or additions;''.
       (h) Limitation.--Section 362 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(j) If 1 case commenced under chapter 7, 11, or 13 of 
     this title is dismissed due to the creation of a debt 
     repayment plan, then for purposes of section 362(c)(3) of 
     this title the subsequent case commenced under any such 
     chapter shall not be presumed to be filed not in good 
     faith.''.

     SEC. 303. EXTENSIONS.

       Section 302(d)(3) of the Bankruptcy, Judges, United States 
     Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 
     581 note) is amended--
       (1) in subparagraph (A), in the matter following clause 
     (ii), by striking ``or October 1, 2002, whichever occurs 
     first''; and
       (2) in subparagraph (F)--
       (A) in clause (i)--
       (i) in subclause (II), by striking ``or October 1, 2002, 
     whichever occurs first''; and
       (ii) in the matter following subclause (II), by striking 
     ``October 1, 2003, or''; and
       (B) in clause (ii), in the matter following subclause 
     (II)--
       (i) by striking ``before October 1, 2003, or''; and
       (ii) by striking ``, whichever occurs first''.

             TITLE IV--SMALL BUSINESS BANKRUPTCY PROVISIONS

     SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.

       Section 1125(f) of title 11, United States Code, is amended 
     to read as follows:
       ``(f) Notwithstanding subsection (b), in a small business 
     case--
       ``(1) in determining whether a disclosure statement 
     provides adequate information, the court shall consider the 
     complexity of the case, the benefit of additional information 
     to creditors and other parties in interest, and the cost of 
     providing additional information;
       ``(2) the court may determine that the plan itself provides 
     adequate information and that a separate disclosure statement 
     is not necessary;
       ``(3) the court may approve a disclosure statement 
     submitted on standard forms approved by the court or adopted 
     pursuant to section 2075 of title 28; and
       ``(4)(A) the court may conditionally approve a disclosure 
     statement subject to final approval after notice and a 
     hearing;
       ``(B) acceptances and rejections of a plan may be solicited 
     based on a conditionally approved disclosure statement if the 
     debtor provides adequate information to each holder of a 
     claim or interest that is solicited, but a conditionally 
     approved disclosure statement shall be mailed not less than 
     20 days before the date of the hearing on confirmation of the 
     plan; and
       ``(C) the hearing on the disclosure statement may be 
     combined with the hearing on confirmation of a plan.''.

     SEC. 402. DEFINITIONS.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended by striking paragraph (51C) and inserting 
     the following:
       ``(51C) `small business case' means a case filed under 
     chapter 11 of this title in which the debtor is a small 
     business debtor;
       ``(51D) `small business debtor' means--
       ``(A) a person (including affiliates of such person that 
     are also debtors under this title) that has aggregate 
     noncontingent, liquidated secured and unsecured debts as of 
     the date of the petition or the order for relief in an amount 
     not more than $4,000,000 (excluding debts owed to 1 or more 
     affiliates or insiders) a case in which the United States 
     trustee has appointed under section 1102(a)(1) of this title 
     a committee of unsecured creditors that `the court has 
     determined' is sufficiently active and representative to 
     provide effective oversight of the debtor, except that if a 
     group of affiliated debtors has aggregate noncontingent 
     liquidated secured and unsecured debts greater than 
     $4,000,000 (excluding debt owed to 1 or more affiliates or 
     insiders), then no member of such group is a small business 
     debtor;''.
       (b) Effect of Discharge.--Section 524 of title 11, United 
     States Code, as amended by section 402, is amended by adding 
     at the end the following:
       ``(k)(1) An individual who is injured by the willful 
     failure of a creditor to substantially comply with the 
     requirements specified in subsections (c) and (d), or by any 
     willful violation of the injunction operating under 
     subsection (a)(2), shall be entitled to recover--
       ``(A) the greater of--
       ``(i) the amount of actual damages; or
       ``(ii) $1,000; and
       ``(B) costs and attorneys' fees.
       ``(2) An action to recover for a violation specified in 
     paragraph (1) may not be brought as a class action.''.
       (c) Conforming Amendment.--Section 1102(a)(3) of title 11, 
     United States Code, is amended by inserting ``debtor'' after 
     ``small business''.

     SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

       The Advisory Committee on Bankruptcy Rules of the Judicial 
     Conference of the United States shall, within a reasonable 
     period of time after the date of the enactment of this Act, 
     propose for adoption standard form disclosure statements and 
     plans of reorganization for small business debtors (as 
     defined in section 101 of title 11, United States Code, as 
     amended by this Act), designed to achieve a practical balance 
     between--
       (1) the reasonable needs of the courts, the United States 
     trustee, creditors, and other parties in interest for 
     reasonably complete information; and
       (2) economy and simplicity for debtors.

     SEC. 404. UNIFORM NATIONAL REPORTING REQUIREMENTS.

       (a) Reporting Required.--(1) Title 11 of the United States 
     Code is amended by inserting after section 307 the following:

     ``Sec. 308. Debtor reporting requirements

       ``A small business debtor shall file periodic financial and 
     other reports containing information including--
       ``(1) the debtor's profitability, that is, approximately 
     how much money the debtor has been earning or losing during 
     current and recent fiscal periods;
       ``(2) reasonable approximations of the debtor's projected 
     cash receipts and cash disbursements over a reasonable 
     period;
       ``(3) comparisons of actual cash receipts and disbursements 
     with projections in prior reports;
       ``(4) whether the debtor is--
       ``(A) in compliance in all material respects with 
     postpetition requirements imposed by this title and the 
     Federal Rules of Bankruptcy Procedure; and
       ``(B) timely filing tax returns and paying taxes and other 
     administrative claims when due, and, if not, what the 
     failures are and how, at what cost, and when the debtor 
     intends to remedy such failures; and
       ``(5) such other matters as are in the best interests of 
     the debtor and creditors, and in the public interest in fair 
     and efficient procedures under chapter 11 of this title.''.
       (2) The table of sections of chapter 3 of title 11, United 
     States Code, is amended by inserting after the item relating 
     to section 307 the following:

``308. Debtor reporting requirements.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect 60 days after the date on which rules are 
     prescribed pursuant to section 2075, title 28, United States 
     Code to establish forms to be used to comply with section 308 
     of title 11, United States Code, as added by subsection (a).

     SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR SMALL 
                   BUSINESS CASES.

       (a) Proposal of Rules and Forms.--The Advisory Committee on 
     Bankruptcy Rules of the Judicial Conference of the United 
     States shall propose for adoption amended Federal Rules of 
     Bankruptcy Procedure and Official Bankruptcy Forms to be used 
     by small business debtors to file periodic financial and 
     other reports containing information, including information 
     relating to--
       (1) the debtor's profitability;
       (2) the debtor's cash receipts and disbursements; and
       (3) whether the debtor is timely filing tax returns and 
     paying taxes and other administrative claims when due.
       (b) Purpose.--The rules and forms proposed under subsection 
     (a) shall be designed to achieve a practical balance 
     between--
       (1) the reasonable needs of the bankruptcy court, the 
     United States trustee, creditors, and other parties in 
     interest for reasonably complete information;
       (2) the small business debtor's interest that required 
     reports be easy and inexpensive to complete; and
       (3) the interest of all parties that the required reports 
     help the small business debtor to understand its financial 
     condition and plan its future.

     SEC. 406. DUTIES IN SMALL BUSINESS CASES.

       (a) Duties in Chapter 11 Cases.--Title 11 of the United 
     States Code is amended by inserting after section 1114 the 
     following:

     ``Sec. 1115. Duties of trustee or debtor in possession in 
       small business cases

       ``In a small business case, a trustee or the debtor in 
     possession, in addition to the duties provided in this title 
     and as otherwise required by law, shall--
       ``(1) append to the voluntary petition or, in an 
     involuntary case, file within 3 days after the date of the 
     order for relief--
       ``(A) its most recent balance sheet, statement of 
     operations, cash-flow statement, Federal income tax return; 
     or
       ``(B) a statement made under penalty of perjury that no 
     balance sheet, statement of operations, or cash-flow 
     statement has been prepared and no Federal tax return has 
     been filed;
       ``(2) attend, through its senior management personnel and 
     counsel, meetings scheduled by the court or the United States 
     trustee, including initial debtor interviews, scheduling 
     conferences, and meetings of creditors convened under section 
     341 of this title unless the court waives this requirement 
     after notice and hearing, upon a finding of extraordinary and 
     compelling circumstances;
       ``(3) timely file all schedules and statements of financial 
     affairs, unless the court, after notice and a hearing, grants 
     an extension, which shall not extend such time period to a 
     date later than 30 days after the date of the order for 
     relief, absent extraordinary and compelling circumstances;
       ``(4) file all postpetition financial and other reports 
     required by the Federal Rules of Bankruptcy Procedure or by 
     local rule of the district court;

[[Page H9968]]

       ``(5) subject to section 363(c)(2) of this title, maintain 
     insurance customary and appropriate to the industry;
       ``(6)(A) timely file tax returns;
       ``(B) subject to section 363(c)(2) of this title, timely 
     pay all administrative expense tax claims, except those being 
     contested by appropriate proceedings being diligently 
     prosecuted; and
       ``(C) subject to section 363(c)(2) of this title, establish 
     1 or more separate deposit accounts not later than 10 
     business days after the date of order for relief (or as soon 
     thereafter as possible if all banks contacted decline the 
     business) and deposit therein, not later than 1 business day 
     after receipt thereof, all taxes payable for periods 
     beginning after the date the case is commenced that are 
     collected or withheld by the debtor for governmental units 
     unless the court waives this requirement after notice and 
     hearing, upon a finding of extraordinary and compelling 
     circumstances; and
       ``(7) allow the United States trustee, or its designated 
     representative, to inspect the debtor's business premises, 
     books, and records at reasonable times, after reasonable 
     prior written notice, unless notice is waived by the 
     debtor.''.
       (b) Technical Amendment.--The table of sections of chapter 
     11, United States Code, is amended by inserting after the 
     item relating to section 1114 the following:

``1115. Duties of trustee or debtor in possession in small business 
              cases.''.

     SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.

       Section 1121(e) of title 11, United States Code, is amended 
     to read as follows:
       ``(e) In a small business case--
       ``(1) only the debtor may file a plan until after 90 days 
     after the date of the order for relief, unless shortened on 
     request of a party in interest made during the 90-day period, 
     or unless extended as provided by this subsection, after 
     notice and hearing the court, for cause, orders otherwise;
       ``(2) the plan, and any necessary disclosure statement, 
     shall be filed not later than 90 days after the date of the 
     order for relief; and
       ``(3) the time periods specified in paragraphs (1) and (2), 
     and the time fixed in section 1129(e) of this title, within 
     which the plan shall be confirmed may be extended only if--
       ``(A) the debtor, after providing notice to parties in 
     interest (including the United States trustee), demonstrates 
     by a preponderance of the evidence that it is more likely 
     than not that the court will confirm a plan within a 
     reasonable time;
       ``(B) a new deadline is imposed at the time the extension 
     is granted; and
       ``(C) the order extending time is signed before the 
     existing deadline has expired.''.

     SEC. 408. PLAN CONFIRMATION DEADLINE.

       Section 1129 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) In a small business case, the plan shall be confirmed 
     not later than 150 days after the date of the order for 
     relief unless such 150-day period is extended as provided in 
     section 1121(e)(3) of this title.''.

     SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.

       Section 105(d) of title 11, United States Code, is 
     amended--
       (1) in paragraph (2)(B)(vi) by striking the period at the 
     end and inserting ``; and''; and
       (2) by adding at the end the following:
       ``(3) in a small business case, not extend the time periods 
     specified in sections 1121(e) and 1129(e) of this title 
     except as provided in section 1121(e)(3) of this title.''.

     SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.

       (a) Duties of the United States Trustee.--Section 586(a) of 
     title 28, United States Code, is amended--
       (1) in paragraph (3)--
       (A) in subparagraph (G) by striking ``and'' at the end;
       (B) by redesignating subparagraph (H) as subparagraph (I); 
     and
       (C) by inserting after subparagraph (G) the following:
       ``(H) in small business cases (as defined in section 101 of 
     title 11), performing the additional duties specified in 
     title 11 pertaining to such cases;'';
       (2) in paragraph (6) by striking ``and'' at the end;
       (3) in paragraph (7) by striking the period at the end and 
     inserting ``; and''; and
       (4) by inserting after paragraph (7) the following:
       ``(8) in each of such small business cases--
       ``(A) conduct an initial debtor interview as soon as 
     practicable after the entry of order for relief but before 
     the first meeting scheduled under section 341(a) of title 11 
     at which time the United States trustee shall begin to 
     investigate the debtor's viability, inquire about the 
     debtor's business plan, explain the debtor's obligations to 
     file monthly operating reports and other required reports, 
     attempt to develop an agreed scheduling order, and inform the 
     debtor of other obligations;
       ``(B) when determined to be appropriate and advisable, 
     visit the appropriate business premises of the debtor and 
     ascertain the state of the debtor's books and records and 
     verify that the debtor has filed its tax returns; and
       ``(C) review and monitor diligently the debtor's 
     activities, to identify as promptly as possible whether the 
     debtor will be unable to confirm a plan; and
       ``(9) in cases in which the United States trustee finds 
     material grounds for any relief under section 1112 of title 
     11, the United States trustee shall apply promptly to the 
     court for relief.''.

     SEC. 411. SCHEDULING CONFERENCES.

       Section 105(d) of title 11, United States Code, is 
     amended--
       (1) in the matter preceding paragraph (1) by striking ``, 
     may'';
       (2) by amending paragraph (1) to read as follows:
       ``(1) shall hold such status conferences as are necessary 
     to further the expeditious and economical resolution of the 
     case; and''; and
       (3) in paragraph (2) by striking ``unless inconsistent with 
     another provision of this title or with applicable Federal 
     Rules of Bankruptcy Procedure,'' and inserting ``may''.

     SEC. 412. SERIAL FILER PROVISIONS.

       Section 362 of title 11, United States Code, is amended--
       (1) in subsection (i) as so redesignated by section 124--
       (A) by striking ``An'' and inserting ``(1) Except as 
     provided in paragraph (2), an''; and
       (B) by adding at the end the following:
       ``(2) If such violation is based on an action taken by an 
     entity in the good-faith belief that subsection (h) applies 
     to the debtor, then recovery under paragraph (1) against such 
     entity shall be limited to actual damages.''; and
       (2) by inserting after subsection (i), as redesignated by 
     section 124, the following:
       ``(j) The filing of a petition under chapter 11 of this 
     title operates as a stay of the acts described in subsection 
     (a) only in an involuntary case involving no collusion by the 
     debtor with creditors and in which the debtor--
       ``(1) is a debtor in a small business case pending at the 
     time the petition is filed;
       ``(2) was a debtor in a small business case which was 
     dismissed for any reason by an order that became final in the 
     2-year period ending on the date of the order for relief 
     entered with respect to the petition;
       ``(3) was a debtor in a small business case in which a plan 
     was confirmed in the 2-year period ending on the date of the 
     order for relief entered with respect to the petition; or
       ``(4) is an entity that has succeeded to substantially all 
     of the assets or business of a small business debtor 
     described in subparagraph (A), (B), or (C); unless the debtor 
     proves, by a preponderance of the evidence, that the filing 
     of such petition resulted from circumstances beyond the 
     control of the debtor not foreseeable at the time the case 
     then pending was filed; and that it is more likely than not 
     that the court will confirm a feasible plan, but not a 
     liquidating plan, within a reasonable time.''.

     SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND 
                   APPOINTMENT OF TRUSTEE.

       (a) Expanded Grounds for Dismissal or Conversion.--Section 
     1112(b) of title 11, United States Code, is amended to read 
     as follows:
       ``(b)(1) Except as provided in paragraph (2), in subsection 
     (c), and in section 1104(a)(3) of this title, on request of a 
     party in interest, and after notice and a hearing, the court 
     shall convert a case under this chapter to a case under 
     chapter 7 of this title or dismiss a case under this chapter, 
     whichever is in the best interest of creditors and the 
     estate, if the movant establishes cause.
       ``(2) The relief provided in paragraph (1) shall not be 
     granted if the debtor or another party in interest objects 
     and establishes, by a preponderance of the evidence that--
       ``(A) it is more likely than not that a plan will be 
     confirmed within a time as fixed by this title or by order of 
     the court entered pursuant to section 1121(e)(3), or within a 
     reasonable time if no time has been fixed; and
       ``(B) if the reason is an act or omission of the debtor 
     that--
       ``(i) there exists a reasonable justification for the act 
     or omission; and
       ``(ii) the act or omission will be cured within a 
     reasonable time fixed by the court not to exceed 30 days 
     after the court decides the motion, unless the movant 
     expressly consents to a continuance for a specific period of 
     time, or compelling circumstances beyond the control of the 
     debtor justify an extension.
       ``(3) For purposes of this subsection, cause includes--
       ``(A) substantial or continuing loss to or diminution of 
     the estate;
       ``(B) gross mismanagement of the estate;
       ``(C) failure to maintain appropriate insurance;
       ``(D) unauthorized use of cash collateral harmful to 1 or 
     more creditors;
       ``(E) failure to comply with an order of the court;
       ``(F) failure timely to satisfy any filing or reporting 
     requirement established by this title or by any rule 
     applicable to a case under this chapter;
       ``(G) failure to attend the meeting of creditors convened 
     under section 341(a) of this title or an examination ordered 
     under rule 2004 of the Federal Rules of Bankruptcy Procedure;
       ``(H) failure timely to provide information or attend 
     meetings reasonably requested by the United States trustee;
       ``(I) failure timely to pay taxes due after the date of the 
     order for relief or to file tax returns due after the order 
     for relief;
       ``(J) failure to file a disclosure statement, or to file or 
     confirm a plan, within the time fixed by this title or by 
     order of the court;
       ``(K) failure to pay any fees or charges required under 
     chapter 123 of title 28;
       ``(L) revocation of an order of confirmation under section 
     1144 of this title;
       ``(M) inability to effectuate substantial consummation of a 
     confirmed plan;
       ``(N) material default by the debtor with respect to a 
     confirmed plan; and
       ``(O) termination of a plan by reason of the occurrence of 
     a condition specified in the plan.
       ``(4) The court shall commence the hearing on any motion 
     under this subsection not later than 30 days after filing of 
     the motion, and shall decide the motion within 15 days after 
     commencement of the hearing, unless the movant expressly 
     consents to a continuance for a specific period of time or 
     compelling circumstances prevent the court from meeting the 
     time limits established by this paragraph.''.

[[Page H9969]]

       (b) Additional Grounds for Appointment of Trustee.--Section 
     1104(a) of title 11, United States Code, is amended--
       (1) in paragraph (1) by striking ``or'' at the end;
       (2) in paragraph (2) by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(3) if grounds exist to convert or dismiss the case under 
     section 1112 of this title, but the court determines that the 
     appointment of a trustee is in the best interests of 
     creditors and the estate.''.

     SEC. 414. STUDY OF OPERATION OF TITLE 11 OF THE UNITED STATES 
                   CODE WITH RESPECT TO SMALL BUSINESSES.

       Not later than 2 years after the date of the enactment of 
     this Act, the Administrator of the Small Business 
     Administration, in consultation with the Attorney General, 
     the Director of the Administrative Office of United States 
     Trustees, and the Director of the Administrative Office of 
     the United States Courts, shall--
       (1) conduct a study to determine--
       (A) the internal and external factors that cause small 
     businesses, especially sole proprietorships, to become 
     debtors in cases under title 11 of the United States Code and 
     that cause certain small businesses to successfully complete 
     cases under chapter 11 of such title; and
       (B) how Federal laws relating to bankruptcy may be made 
     more effective and efficient in assisting small businesses to 
     remain viable; and
       (2) submit to the President pro tempore of the Senate and 
     the Speaker of the House of Representatives a report 
     summarizing that study.

     SEC. 415. PAYMENT OF INTEREST.

       Section 362(d)(3) of title 11, United States Code, is 
     amended--
       (1) by inserting ``or 30 days after the court determines 
     that the debtor is subject to this paragraph, whichever is 
     later'' after ``90-day period)''; and
       (2) by amending subparagraph (B) to read as follows:
       ``(B) the debtor has commenced monthly payments (which 
     payments may, in the debtor's sole discretion, 
     notwithstanding section 363(c)(2) of this title, be made from 
     rents or other income generated before or after the 
     commencement of the case by or from the property) to each 
     creditor whose claim is secured by such real estate (other 
     than a claim secured by a judgment lien or by an unmatured 
     statutory lien), which payments are in an amount equal to 
     interest at the then-applicable nondefault contract rate of 
     interest on the value of the creditor's interest in the real 
     estate; or''.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

     SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

       (a) Technical Amendment Relating to Municipalities.--
     Section 921(d) of title 11, United States Code, is amended by 
     inserting ``notwithstanding section 301(b)'' before the 
     period at the end.
       (b) Conforming Amendment.--Section 301 of title 11, United 
     States Code, is amended--
       (1) by inserting ``(a)'' before ``A voluntary''; and
       (2) by amending the last sentence to read as follows:
       ``(b) The commencement of a voluntary case under a chapter 
     of this title constitutes an order for relief under such 
     chapter.''.

     SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.

       Section 901 of title 11, United States Code, is amended--
       (1) by inserting ``555, 556,'' after ``553,''; and
       (2) by inserting ``559, 560,'' after ``557,''.

              TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM

     SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING OF 
                   CREDITORS.

       Section 341(c) of title 11, United States Code, is amended 
     by inserting after the first sentence the following: 
     ``Notwithstanding any local court rule, provision of a State 
     constitution, any other Federal or State law that is not a 
     bankruptcy law, or other requirement that representation at 
     the meeting of creditors under subsection (a) be by an 
     attorney, a creditor holding a consumer debt or any 
     representative of the creditor (which may include an entity 
     or an employee of an entity and may be a representative for 
     more than one creditor) shall be permitted to appear at and 
     participate in the meeting of creditors in a case under 
     chapter 7 or 13, either alone or in conjunction with an 
     attorney for the creditor. Nothing in this subsection shall 
     be construed to require any creditor to be represented by an 
     attorney at any meeting of creditors.''.

     SEC. 602. AUDIT PROCEDURES.

       (a) Amendments.--Section 586 of title 28, United States 
     Code, is amended--
       (1) in subsection (a) by amending striking paragraph (6) to 
     read as follows:
       ``(6) make such reports as the Attorney General directs, 
     including the results of audits performed under subsection 
     (f); and''; and
       (2) by adding at the end the following:
       ``(f)(1)(A) The Attorney General shall establish procedures 
     to determine the accuracy, veracity, and completeness of 
     petitions, schedules, and other information which the debtor 
     is required to provide under sections 521 and 1322 of title 
     11, and, if applicable, section 111 of title 11, in 
     individual cases filed under chapter 7 or 13 of such title. 
     Such audits shall be in accordance with generally accepted 
     auditing standards and performed by independent certified 
     public accountants or independent licensed public 
     accountants.
       ``(B) Those procedures shall--
       ``(i) establish a method of selecting appropriate qualified 
     persons to contract to perform those audits;
       ``(ii) establish a method of randomly selecting cases to be 
     audited, except that not less than 1 out of every 250 cases 
     in each Federal judicial district shall be selected for 
     audit;
       ``(iii) require audits for schedules of income and expenses 
     which reflect greater than average variances from the 
     statistical norm of the district in which the schedules were 
     filed; and
       ``(iv) establish procedures for providing, not less 
     frequently than annually, public information concerning the 
     aggregate results of such audits including the percentage of 
     cases, by district, in which a material misstatement of 
     income or expenditures is reported.
       ``(2) The United States trustee for each district is 
     authorized to contract with auditors to perform audits in 
     cases designated by the United States trustee according to 
     the procedures established under paragraph (1).
       ``(3)(A) The report of each audit conducted under this 
     subsection shall be filed with the court and transmitted to 
     the United States trustee. Each report shall clearly and 
     conspicuously specify any material misstatement of income or 
     expenditures or of assets identified by the person 
     performing the audit. In any case where a material 
     misstatement of income or expenditures or of assets has 
     been reported, the clerk of the bankruptcy court shall 
     give notice of the misstatement to the creditors in the 
     case.
       ``(B) If a material misstatement of income or expenditures 
     or of assets is reported, the United States trustee shall--
       ``(i) report the material misstatement, if appropriate, to 
     the United States Attorney pursuant to section 3057 of title 
     18, United States Code; and
       ``(ii) if advisable, take appropriate action, including but 
     not limited to commencing an adversary proceeding to revoke 
     the debtor's discharge pursuant to section 727(d) of title 
     11, United States Code.''.
       (b) Amendments to Section 521 of Title 11, U.S.C.--Section 
     521(a) of title 11, United States Code, as amended by section 
     604, is amended in paragraphs (3) and (4) by adding ``or an 
     auditor appointed pursuant to section 586 of title 28, United 
     States Code'' after ``serving in the case''.
       (c) Amendments to Section 727 of Title 11, U.S.C.--Section 
     727(d) of title 11, United States Code, is amended--
       (1) by deleting ``or'' at the end of paragraph (2);
       (2) by substituting ``; or'' for the period at the end of 
     paragraph (3); and
       (3) by adding the following at the end the following:
       ``(4) the debtor has failed to explain satisfactorily--
       ``(A) a material misstatement in an audit performed 
     pursuant to section 586(f) of title 28, United States Code; 
     or
       ``(B) a failure to make available for inspection all 
     necessary accounts, papers, documents, financial records, 
     files, and all other papers, things, or property belonging to 
     the debtor that are requested for an audit conducted pursuant 
     to section 586(f) of title 28, United States Code.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect 18 months after the date of enactment of 
     this Act.

     SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7 AND 13 
                   CASES.

       (a) Notice.--Section 342 of title 11, United States Code, 
     is amended--
       (1) in subsection (c)--
       (A) by striking ``, but the failure of such notice to 
     contain such information shall not invalidate the legal 
     effect of such notice''; and
       (B) by adding the following at the end:
     ``If the credit agreement between the debtor and the creditor 
     or the last communication before the filing of the petition 
     in a voluntary case from the creditor to a debtor who is an 
     individual states an account number of the debtor which is 
     the current account number of the debtor with respect to any 
     debt held by the creditor against the debtor, the debtor 
     shall include such account number in any notice to the 
     creditor required to be given under this title. If the 
     creditor has specified to the debtor an address at which the 
     creditor wishes to receive correspondence regarding the 
     debtor's account, any notice to the creditor required to be 
     given by the debtor under this title shall be given at such 
     address. For the purposes of this section, `notice' shall 
     include, but shall not be limited to, any correspondence from 
     the debtor to the creditor after the commencement of the 
     case, any statement of the debtor's intention under section 
     521(a)(2) of this title, notice of the commencement of any 
     proceeding in the case to which the creditor is a party, and 
     any notice of the hearing under section 1324 of this 
     title.'';
       (2) by adding at the end the following:
       ``(d) At any time, a creditor in a case of an individual 
     debtor under chapter 7 or 13 may file with the court and 
     serve on the debtor a notice of the address to be used to 
     notify the creditor in that case. Five days after receipt of 
     such notice, if the court or the debtor is required to give 
     the creditor notice, such notice shall be given at that 
     address.
       ``(e) An entity may file with the court a notice stating 
     its address for notice in cases under chapters 7 and 13. 
     After 30 days following the filing of such notice, any notice 
     in any case filed under chapter 7 or 13 given by the court 
     shall be to that address unless specific notice is given 
     under subsection (d) with respect to a particular case.
       ``(f) Notice given to a creditor other than as provided in 
     this section shall not be effective notice until it has been 
     brought to the attention of the creditor. If the creditor has 
     designated a person or department to be responsible for 
     receiving notices concerning bankruptcy cases and has 
     established reasonable procedures so that bankruptcy notices 
     received by the creditor will be delivered to such department 
     or person, notice will not be brought to the attention of the 
     creditor until received by such person or department. No 
     sanction under section 362(h) of this title or any other 
     sanction which a court may

[[Page H9970]]

     impose on account of violations of the stay under section 
     362(a) of this title or failure to comply with section 542 or 
     543 of this title may be imposed on any action of the 
     creditor unless the action takes place after the creditor has 
     received notice of the commencement of the case effective 
     under this section.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 121, 604, 122, 301, and 
     302, is amended--
       (1) by inserting ``(a)'' before ``The debtor shall--'';
       (2) by striking paragraph (1) and inserting the following:
       ``(1) file--
       ``(A) a list of creditors; and
       ``(B) unless the court orders otherwise--
       ``(i) a schedule of assets and liabilities;
       ``(ii) a schedule of current income and current 
     expenditures;
       ``(iii) a statement of the debtor's financial affairs and, 
     if applicable, a certificate--

       ``(I) of an attorney whose name is on the petition as the 
     attorney for the debtor or any bankruptcy petition preparer 
     signing the petition pursuant to section 110(b)(1) of this 
     title indicating that such attorney or bankruptcy petition 
     preparer delivered to the debtor any notice required by 
     section 342(b) of this title; or

       ``(II) if no attorney for the debtor is indicated and no 
     bankruptcy petition preparer signed the petition, of the 
     debtor that such notice was obtained and read by the debtor;

       ``(iv) copies of any Federal tax returns, including any 
     schedules or attachments, filed by the debtor for the 3-year 
     period preceding the order for relief;
       ``(v) copies of all payment advices or other evidence of 
     payment, if any, received by the debtor from any employer of 
     the debtor in the period 60 days prior to the filing of the 
     petition;
       ``(vi) a statement of the amount of projected monthly net 
     income, itemized to show how calculated; and
       ``(vii) a statement disclosing any reasonably anticipated 
     increase in income or expenditures over the 12-month period 
     following the date of filing;''; and
       (3) by adding at the end the following:
       ``(e)(1) At any time, a creditor, in the case of an 
     individual under chapter 7 or 13, may file with the court 
     notice that the creditor requests the petition, schedules, 
     and a statement of affairs filed by the debtor in the case 
     and the court shall make those documents available to the 
     creditor who requests those documents.
       ``(2) At any time, a creditor in a case under chapter 13 
     may file with the court notice that the creditor requests the 
     plan filed by the debtor in the case, and the court shall 
     make such plan available to the creditor who requests such 
     plan at a reasonable cost and not later than 5 days after 
     such request.
       ``(f) An individual debtor in a case under chapter 7 or 13 
     shall file with the court--
       ``(1) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, with respect 
     to the period from the commencement of the case until such 
     time as the case is closed;
       ``(2) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, that were 
     not filed with the taxing authority when the schedules under 
     subsection (a)(1) were filed with respect to the period that 
     is 3 years before the order for relief;
       ``(3) any amendments to any of the tax returns, including 
     schedules or attachments, described in paragraph (1) or (2); 
     and
       ``(4) in a case under chapter 13, a statement subject to 
     the penalties of perjury by the debtor of the debtor's income 
     and expenditures in the preceding tax year and monthly 
     income, that shows how the amounts are calculated--
       ``(A) beginning on the date that is the later of 90 days 
     after the close of the debtor's tax year or 1 year after the 
     order for relief, unless a plan has been confirmed; and
       ``(B) thereafter, on or before the date that is 45 days 
     before each anniversary of the confirmation of the plan until 
     the case is closed.
       ``(d)(1) A statement referred to in subsection (c)(4) shall 
     disclose--
       ``(A) the amount and sources of income of the debtor;
       ``(B) the identity of any persons responsible with the 
     debtor for the support of any dependents of the debtor; and
       ``(C) the identity of any persons who contributed, and the 
     amount contributed, to the household in which the debtor 
     resides.
       ``(2) The tax returns, amendments, and statement of income 
     and expenditures described in paragraph (1) shall be 
     available to the United States trustee, any bankruptcy 
     administrator, any trustee, and any party in interest for 
     inspection and copying, subject to the requirements of 
     subsection (e).
       ``(g)(1) Not later than 30 days after the date of enactment 
     of the Consumer Bankruptcy Reform Act of 1998, the Director 
     of the Administrative Office of the United States Courts 
     shall establish procedures for safeguarding the 
     confidentiality of any tax information required to be 
     provided under this section.
       ``(2) The procedures under paragraph (1) shall include 
     restrictions on creditor access to tax information that is 
     required to be provided under this section.
       ``(3) Not later than 1 year after the date of enactment of 
     the Consumer Bankruptcy Reform Act of 1998, the Director of 
     the Administrative Office of the United States Courts shall 
     prepare, and submit to Congress a report that--
       ``(A) assesses the effectiveness of the procedures under 
     paragraph (1); and
       ``(B) if appropriate, includes proposed legislation--
       ``(i) to further protect the confidentiality of tax 
     information; and
       ``(ii) to provide penalties for the improper use by any 
     person of the tax information required to be provided under 
     this section.
       ``(h) If requested by the United States trustee or a 
     trustee serving in the case, the debtor provide a document 
     that establishes the identity of the debtor, including a 
     driver's license, passport, or other document that contains a 
     photograph of the debtor and such other personal identifying 
     information relating to the debtor that establishes the 
     identity of the debtor.''.

     SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR 
                   PROVIDE REQUIRED INFORMATION.

       Section 521 of title 11, United States Code, is amended--
       (1) by inserting ``(a)'' before ``The debtor''; and
       (2) by adding at the end the following:
       ``(b)(1) Notwithstanding section 707(a) of this title, and 
     subject to paragraph (2), if an individual debtor in a 
     voluntary case under chapter 7 or 13 fails to file all of the 
     information required under subsection (a)(1) within 45 days 
     after the filing of the petition commencing the case, the 
     case shall be automatically dismissed effective on the 46th 
     day after the filing of the petition.
       ``(2) With respect to a case described in paragraph (1), 
     any party in interest may request the court to enter an order 
     dismissing the case. The court shall, if so requested, enter 
     an order of dismissal not later than 5 days after such 
     request.
       ``(3) Upon request of the debtor made within 45 days after 
     the filing of the petition commencing a case described in 
     paragraph (1), the court may allow the debtor an additional 
     period of not to exceed 45 days to file the information 
     required under subsection (a)(1) if the court finds 
     justification for extending the period for the filing.''.

     SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON 
                   CONFIRMATION OF THE PLAN.

       (a) Hearing.--Section 1324 of title 11, United States Code, 
     is amended--
       (1) by striking ``After'' and inserting the following:
       ``(a) Except as provided in subsection (b) and after''; and
       (2) by adding at the end the following:
       ``(b) The hearing on confirmation of the plan may be held 
     not earlier than 20 days, and not later than 45 days, after 
     the meeting of creditors under section 341(a) of this 
     title.''.
       (b) Filing of Plan.--Section 1321 of title 11, United 
     States Code, is amended to read as follows:

     ``Sec. 1321. Filing of plan

       ``The debtor shall file a plan not later than 90 days after 
     the order for relief under this chapter, except that the 
     court may extend such period if the need for an extension is 
     attributable to circumstances for which the debtor should not 
     justly be held accountable.''.

     SEC. 606. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN 
                   CERTAIN CASES.

       Title 11, United States Code, is amended--
       (1) by amending section 1322(d) to read as follows:
       ``(d) If the current monthly total income of the debtor and 
     in a joint case, the debtor and the debtor's spouse combined, 
     is not less than the highest national median family income 
     reported for a family of equal or lesser size or, in the case 
     of a household of 1 person, not less than the national median 
     household income for 1 earner, the plan may not provide for 
     payments over a period that is longer than 5 years. If the 
     current monthly total income of the debtor or in a joint 
     case, the debtor and the debtor's spouse combined, is less 
     than the highest national median family income reported for a 
     family of equal or lesser size, or in the case of a household 
     of 1 person less than the national median household income 
     for 1 earner, the plan may not provide for payments over a 
     period that is longer than 3 years, unless the court, for 
     cause, approves a longer period, but the court may not 
     approve a period that is longer than 5 years.''; and
       (2) in section 1329--
       (A) by striking in subsection (c) ``three years'' and 
     inserting ``the applicable commitment period under section 
     1325(b)(1)(B)(ii)''; and
       (B) by inserting at the end of subsection (c) the 
     following:

     ``The duration period shall be 5 years if the current monthly 
     total income of the debtor, and in a joint case, the debtor 
     and the debtor's spouse combined, is not less than the 
     highest national median family income reported for a family 
     of equal or lesser size or, in the case of a household of 1 
     person, not less than the national median household income 
     for 1 earner, as of the date of the modification and shall be 
     3 years if the current monthly total income is less than the 
     highest national median family income reported for a family 
     of equal or lesser size or, in the case of a household of 1 
     person, less than the national median household income for 1 
     earner as of the date of the modification.''.

     SEC. 607. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE 
                   9011 OF THE FEDERAL RULES OF BANKRUPTCY 
                   PROCEDURE.

       It is the sense of the Congress that rule 9011 of the 
     Federal Rules of Bankruptcy Procedure (11 U.S.C. App) should 
     be modified to include a requirement that all documents 
     (including schedules), signed and unsigned, submitted to the 
     court or to a trustee by debtors who represent themselves and 
     debtors who are represented by an attorney be submitted only 
     after the debtor or the debtor's attorney has made reasonable 
     inquiry to verify that the information contained in such 
     documents is well grounded in fact, and is warranted by 
     existing law or a good-faith argument for the extension, 
     modification, or reversal of existing law.

     SEC. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN CHAPTER 11 
                   BANKRUPTCY CASES.

       (a) Amendments.--Section 1930(a)(6) of title 28, United 
     States Code, is amended--

[[Page H9971]]

       (1) in the 1st sentence by striking ``until the case is 
     converted or dismissed, whichever occurs first''; and
       (2) in the 2d sentence--
       (A) by striking ``The'' and inserting ``Until the plan is 
     confirmed or the case is converted (whichever occurs first) 
     the''; and
       (B) by striking ``less than $300,000;'' and inserting 
     ``less than $300,000. Until the case is converted, dismissed, 
     or closed (whichever occurs first and without regard to 
     confirmation of the plan) the fee shall be''.
       (b) Delayed Effective Date.--The amendments made by 
     subsection (a) shall take effect on October 1, 1999.

     SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO 
                   DEPENDENT STUDENTS.

       Not later than 1 year after the date of the enactment of 
     this Act, the Comptroller General of the United States 
     shall--
       (1) conduct a study regarding the impact that the extension 
     of credit to individuals who are--
       (A) claimed as dependents for purposes of the Internal 
     Revenue Code of 1986; and
       (B) enrolled in post-secondary educational institutions,

     has on the rate of cases filed under title 11 of the United 
     States Code; and
       (2) submit to the Speaker of the House of Representatives 
     and the President pro tempore of the Senate a report 
     summarizing such study.

     SEC. 610. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.

       Section 362(e) of title 11, United States Code, is 
     amended--
       (1) by inserting ``(1)'' after ``(e)''; and
       (2) by adding at the end the following:
       ``(2) Notwithstanding paragraph (1), in the case of an 
     individual filing under chapter 7, 11, or 13, the stay under 
     subsection (a) shall terminate on the date that is 60 days 
     after a request is made by a party in interest under 
     subsection (d), unless--
       ``(A) a final decision is rendered by the court during the 
     60-day period beginning on the date of the request; or
       ``(B) that 60-day period is extended--
       ``(i) by agreement of all parties in interest; or
       ``(ii) by the court for such specific period of time as the 
     court finds is required by for good cause as described in 
     findings made by the court.''.

     SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13.

       Section 348(f)(1) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B)--
       (A) by striking ``in the converted case, with allowed 
     secured claims'' and inserting ``only in a case converted to 
     chapter 11 or 12 but not in a case converted to chapter 7, 
     with allowed secured claims in cases under chapters 11 and 
     12''; and
       (B) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(C) with respect to cases converted from chapter 13--
       ``(i) the claim of any creditor holding security as of the 
     date of the petition shall continue to be secured by that 
     security unless the full amount of such claim determined 
     under applicable nonbankruptcy law has been paid in full as 
     of the date of conversion, notwithstanding any valuation or 
     determination of the amount of an allowed secured claim made 
     for the purposes of the chapter 13 proceeding; and
       ``(ii) unless a prebankruptcy default has been fully cured 
     pursuant to the plan at the time of conversion, in any 
     proceeding under this title or otherwise, the default shall 
     have the effect given under applicable nonbankruptcy law.''.

                       TITLE VII--BANKRUPTCY DATA

     SEC. 701. IMPROVED BANKRUPTCY STATISTICS.

       (a) Amendment.--Chapter 6 of part I of title 28, United 
     States Code, is amended by adding at the end the following:

     ``Sec. 159. Bankruptcy statistics

       ``(a) The clerk of each district shall compile statistics 
     regarding individual debtors with primarily consumer debts 
     seeking relief under chapters 7, 11, and 13 of title 11. 
     Those statistics shall be in a form prescribed by the 
     Director of the Administrative Office of the United States 
     Courts (referred to in this section as the `Office').
       ``(b) The Director shall--
       ``(1) compile the statistics referred to in subsection (a);
       ``(2) make the statistics available to the public; and
       ``(3) not later than October 31, 1998, and annually 
     thereafter, prepare, and submit to Congress a report 
     concerning the information collected under subsection (a) 
     that contains an analysis of the information.
       ``(c) The compilation required under subsection (b) shall--
       ``(1) be itemized, by chapter, with respect to title 11;
       ``(2) be presented in the aggregate and for each district; 
     and
       ``(3) include information concerning--
       ``(A) the total assets and total liabilities of the debtors 
     described in subsection (a), and in each category of assets 
     and liabilities, as reported in the schedules prescribed 
     pursuant to section 2075 of this title and filed by those 
     debtors;
       ``(B) the current total monthly income, projected monthly 
     net income, and average income and average expenses of those 
     debtors as reported on the schedules and statements that each 
     such debtor files under sections 111, 521, and 1322 of title 
     11;
       ``(C) the aggregate amount of debt discharged in the 
     reporting period, determined as the difference between the 
     total amount of debt and obligations of a debtor reported on 
     the schedules and the amount of such debt reported in 
     categories which are predominantly nondischargeable;
       ``(D) the average period of time between the filing of the 
     petition and the closing of the case;
       ``(E) for the reporting period--
       ``(i) the number of cases in which a reaffirmation was 
     filed; and
       ``(ii)(I) the total number of reaffirmations filed;
       ``(II) of those cases in which a reaffirmation was filed, 
     the number in which the debtor was not represented by an 
     attorney; and
       ``(III) of those cases, the number of cases in which the 
     reaffirmation was approved by the court;
       ``(F) with respect to cases filed under chapter 13 of title 
     11, for the reporting period--
       ``(i)(I) the number of cases in which a final order was 
     entered determining the value of property securing a claim in 
     an amount less than the amount of the claim; and
       ``(II) the number of final orders determining the value of 
     property securing a claim issued;
       ``(ii) the number of cases dismissed for failure to make 
     payments under the plan; and
       ``(iii) the number of cases in which the debtor filed 
     another case within the 6 years previous to the filing;
       ``(G) the number of cases in which creditors were fined for 
     misconduct and any amount of punitive damages awarded by the 
     court for creditor misconduct; and
       ``(H) the number of cases in which sanctions under rule 
     9011 of the Federal Rules of Bankruptcy Procedure were 
     imposed against debtor's counsel and damages awarded under 
     such Rule.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 6 of title 28, United States Code, is 
     amended by adding at the end the following:

``159. Bankruptcy statistics.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect 18 months after the date of enactment of 
     this Act.

     SEC. 702. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY 
                   DATA.

       (a) Amendment.--Title 28 of the United States Code is 
     amended by inserting after section 589a the following:

     ``Sec. 589b. Bankruptcy data

       ``(a) Rules.--The Attorney General shall, within a 
     reasonable time after the effective date of this section, 
     issue rules requiring uniform forms for (and from time to 
     time thereafter to appropriately modify and approve)--
       ``(1) final reports by trustees in cases under chapters 7, 
     12, and 13 of title 11; and
       ``(2) periodic reports by debtors in possession or 
     trustees, as the case may be, in cases under chapter 11 of 
     title 11.
       ``(b) Reports.--All reports referred to in subsection (a) 
     shall be designed (and the requirements as to place and 
     manner of filing shall be established) so as to facilitate 
     compilation of data and maximum possible access of the 
     public, both by physical inspection at 1 or more central 
     filing locations, and by electronic access through the 
     Internet or other appropriate media.
       ``(c) Required Information.--The information required to be 
     filed in the reports referred to in subsection (b) shall be 
     that which is in the best interests of debtors and creditors, 
     and in the public interest in reasonable and adequate 
     information to evaluate the efficiency and practicality of 
     the Federal bankruptcy system. In issuing rules proposing the 
     forms referred to in subsection (a), the Attorney General 
     shall strike the best achievable practical balance between--
       ``(1) the reasonable needs of the public for information 
     about the operational results of the Federal bankruptcy 
     system; and
       ``(2) economy, simplicity, and lack of undue burden on 
     persons with a duty to file reports.
       ``(d) Final Reports.--Final reports proposed for adoption 
     by trustees under chapters 7, 12, and 13 of title 11 shall, 
     in addition to such other matters as are required by law or 
     as the Attorney General in the discretion of the Attorney 
     General, shall propose, include with respect to a case under 
     such title--
       ``(1) information about the length of time the case was 
     pending;
       ``(2) assets abandoned;
       ``(3) assets exempted;
       ``(4) receipts and disbursements of the estate;
       ``(5) expenses of administration;
       ``(6) claims asserted;
       ``(7) claims allowed; and
       ``(8) distributions to claimants and claims discharged 
     without payment,

     in each case by appropriate category and, in cases under 
     chapters 12 and 13 of title 11, date of confirmation of the 
     plan, each modification thereto, and defaults by the debtor 
     in performance under the plan.
       ``(e) Periodic Reports.--Periodic reports proposed for 
     adoption by trustees or debtors in possession under chapter 
     11 of title 11 shall, in addition to such other matters as 
     are required by law or as the Attorney General, in the 
     discretion of the Attorney General, shall propose, include--
       ``(1) information about the standard industry 
     classification, published by the Department of Commerce, for 
     the businesses conducted by the debtor;
       ``(2) length of time the case has been pending;
       ``(3) number of full-time employees as at the date of the 
     order for relief and at end of each reporting period since 
     the case was filed;
       ``(4) cash receipts, cash disbursements and profitability 
     of the debtor for the most recent period and cumulatively 
     since the date of the order for relief;
       ``(5) compliance with title 11, whether or not tax returns 
     and tax payments since the date of the order for relief have 
     been timely filed and made;
       ``(6) all professional fees approved by the court in the 
     case for the most recent period and

[[Page H9972]]

     cumulatively since the date of the order for relief 
     (separately reported, in for the professional fees incurred 
     by or on behalf of the debtor, between those that would have 
     been incurred absent a bankruptcy case and those not); and
       ``(7) plans of reorganization filed and confirmed and, with 
     respect thereto, by class, the recoveries of the holders, 
     expressed in aggregate dollar values and, in the case of 
     claims, as a percentage of total claims of the class 
     allowed.''.
       (b) Technical Amendment.--The table of sections of chapter 
     39 of title 28, United States Code, is amended by adding at 
     the end the following:

``589b. Bankruptcy data.''.

     SEC. 703. SENSE OF THE CONGRESS REGARDING AVAILABILITY OF 
                   BANKRUPTCY DATA.

       It is the sense of the Congress that--
       (1) the national policy of the United States should be that 
     all data held by bankruptcy clerks in electronic form, to the 
     extent such data reflects only public records (as defined in 
     section 107 of title 11 of the United States Code), should be 
     released in a usable electronic form in bulk to the public 
     subject to such appropriate privacy concerns and safeguards 
     as the Judicial Conference of the United States may 
     determine; and
       (2) there should be established a bankruptcy data system in 
     which--
       (A) a single set of data definitions and forms are used to 
     collect data nationwide; and
       (B) data for any particular bankruptcy case are aggregated 
     in the same electronic record.

                 TITLE VIII--BANKRUPTCY TAX PROVISIONS

     SEC. 801. TREATMENT OF CERTAIN LIENS.

       (a) Treatment of Certain Liens.--Section 724 of title 11, 
     United States Code, is amended--
       (1) in subsection (b), in the matter preceding paragraph 
     (1), by inserting ``(other than to the extent that there is a 
     properly perfected unavoidable tax lien arising in connection 
     with an ad valorem tax on real or personal property of the 
     estate)'' after ``under this title'';
       (2) in subsection (b)(2), after ``507(a)(1)'', insert 
     ``(except that such expenses, other than claims for wages, 
     salaries, or commissions which arise after the filing of a 
     petition, shall be limited to expenses incurred under chapter 
     7 of this title and shall not include expenses incurred under 
     chapter 11 of this title)''; and
       (3) by adding at the end the following:
       ``(e) Before subordinating a tax lien on real or personal 
     property of the estate, the trustee shall--
       ``(1) exhaust the unencumbered assets of the estate; and
       ``(2) in a manner consistent with section 506(c) of this 
     title, recover from property securing an allowed secured 
     claim the reasonable, necessary costs and expenses of 
     preserving or disposing of that property.
       ``(f) Notwithstanding the exclusion of ad valorem tax liens 
     set forth in this section and subject to the requirements of 
     subsection (e)--
       ``(1) claims for wages, salaries, and commissions that are 
     entitled to priority under section 507(a)(3) of this title; 
     or
       ``(2) claims for contributions to an employee benefit plan 
     entitled to priority under section 507(a)(4) of this title,

     may be paid from property of the estate which secures a tax 
     lien, or the proceeds of such property.''.
       (b) Determination of Tax Liability.--Section 505(a)(2) of 
     title 11, United States Code, is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the amount or legality of any amount arising in 
     connection with an ad valorem tax on real or personal 
     property of the estate, if the applicable period for 
     contesting or redetermining that amount under any law (other 
     than a bankruptcy law) has expired.''.

     SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.

       (a) Effective Notice to Governmental Units.--Section 342 of 
     title 11, United States Code, is amended by adding at the end 
     the following:
       ``(d) If a debtor lists a governmental unit as a creditor 
     in a list or schedule, any notice required to be given by the 
     debtor under this title, any rule, any applicable law, or any 
     order of the court, shall identify the department, agency, or 
     instrumentality through which the debtor is indebted. The 
     debtor shall identify (with information such as a taxpayer 
     identification number, loan, account or contract number, or 
     real estate parcel number, where applicable), and describe 
     the underlying basis for the governmental unit's claim. If 
     the debtor's liability to a governmental unit arises from a 
     debt or obligation owed or incurred by another individual, 
     entity, or organization, or under a different name, the 
     debtor shall identify such individual, entity, organization, 
     or name.
       ``(e) The clerk shall keep and update quarterly, in the 
     form and manner as the Director of the Administrative Office 
     of the United States Courts prescribes, and make available to 
     debtors, a register in which a governmental unit may 
     designate a safe harbor mailing address for service of notice 
     in cases pending in the district. A governmental unit may 
     file a statement with the clerk designating a safe harbor 
     address to which notices are to be sent, unless such 
     governmental unit files a notice of change of address.''.
       (b) Adoption of Rules Providing Notice.--The Advisory 
     Committee on Bankruptcy Rules of the Judicial Conference 
     shall, within a reasonable period of time after the date of 
     the enactment of this Act, propose for adoption enhanced 
     rules for providing notice to State, Federal, and local 
     government units that have regulatory authority over the 
     debtor or which may be creditors in the debtor's case. Such 
     rules shall be reasonably calculated to ensure that notice 
     will reach the representatives of the governmental unit, or 
     subdivision thereof, who will be the proper persons 
     authorized to act upon the notice. At a minimum, the rules 
     should require that the debtor--
       (1) identify in the schedules and the notice, the 
     subdivision, agency, or entity in respect of which such 
     notice should be received;
       (2) provide sufficient information (such as case captions, 
     permit numbers, taxpayer identification numbers, or similar 
     identifying information) to permit the governmental unit or 
     subdivision thereof, entitled to receive such notice, to 
     identify the debtor or the person or entity on behalf of 
     which the debtor is providing notice where the debtor may be 
     a successor in interest or may not be the same as the person 
     or entity which incurred the debt or obligation; and
       (3) identify, in appropriate schedules, served together 
     with the notice, the property in respect of which the claim 
     or regulatory obligation may have arisen, if any, the nature 
     of such claim or regulatory obligation and the purpose for 
     which notice is being given.
       (c) Effect of Failure of Notice.--Section 342 of title 11, 
     United States Code, as amended by subsection (a), is amended 
     by adding at the end the following:
       ``(f) A notice that does not comply with subsections (d) 
     and (e) shall not be effective unless the debtor 
     demonstrates, by clear and convincing evidence, that timely 
     notice was given in a manner reasonably calculated to satisfy 
     the requirements of this section was given, and that--
       ``(1) either the notice was timely sent to the safe harbor 
     address provided in the register maintained by the clerk of 
     the district in which the case was pending for such purposes; 
     or
       ``(2) no safe harbor address was provided in such list for 
     the governmental unit and that an officer of the governmental 
     unit who is responsible for the matter or claim had actual 
     knowledge of the case in sufficient time to act.''.

     SEC. 803. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.

       Section 505(b) of title 11, United States Code, is amended 
     by striking ``Unless'' at the beginning of the second 
     sentence thereof and inserting ``If the request is made 
     substantially in the manner designated by the governmental 
     unit and unless''.

     SEC. 804. RATE OF INTEREST ON TAX CLAIMS.

       Chapter 5 of title 11, United States Code, is amended by 
     adding at the end the following:

     ``Sec. 511. Rate of interest on tax claims

       ``If any provision of this title requires the payment of 
     interest on a tax claim or requires the payment of interest 
     to enable a creditor to receive the present value of the 
     allowed amount of a tax claim, the rate of interest shall be 
     as follows:
       ``(1) In the case of ad valorem tax claims, whether secured 
     or unsecured, other unsecured tax claims where interest is 
     required to be paid under section 726(a)(5) of this title, 
     secured tax claims, and administrative tax claims paid under 
     section 503(b)(1) of this title, the rate shall be determined 
     under applicable nonbankruptcy law.
       ``(2) In the case of all other tax claims, the minimum rate 
     of interest shall be the Federal short-term rate rounded to 
     the nearest full percent, determined under section 1274(d) of 
     the Internal Revenue Code of 1986, plus 3 percentage points
       ``(A) In the case of claims for Federal income taxes, such 
     rate shall be subject to any adjustment that may be required 
     under section 6621(d) of the Internal Revenue Code of 1986.
       ``(B) In the case of taxes paid under a confirmed plan or 
     reorganization, such rate shall be determined as of the 
     calendar month in which the plan is confirmed.''.

     SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.

       Section 507(a)(9)(A) of title 11, United States Code, as so 
     redesignated, is amended--
       (1) in clause (i) by inserting after ``petition'' and 
     before the semicolon ``, plus any time, plus 6 months, during 
     which the stay of proceedings was in effect in a prior case 
     under this title''; and
       (2) amend clause (ii) to read as follows:
       ``(ii) assessed within 240 days before the date of the 
     filing of the petition, exclusive of--

       ``(I) any time plus 30 days during which an offer in 
     compromise with respect of such tax, was pending or in effect 
     during such 240-day period;
       ``(II) any time plus 30 days during which an installment 
     agreement with respect of such tax was pending or in effect 
     during such 240-day period, up to 1 year; and
       ``(III) any time plus 6 months during which a stay of 
     proceedings against collections was in effect in a prior case 
     under this title during such 240-day period.''.

     SEC. 806. PRIORITY PROPERTY TAXES INCURRED.

       Section 507(a)(8)(B) of title 11, United States Code, is 
     amended by striking ``assessed'' and inserting ``incurred''.

     SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDULENT AND OTHER TAXES.

       Section 1328(a)(2) of title 11, United States Code, is 
     amended by inserting ``(1),'' after ``paragraph''.

     SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.

       Section 1141(d) of title 11, United States Code, as amended 
     by section 119A, is amended by adding at the end the 
     following:
       ``(6) Notwithstanding the provisions of paragraph (1), the 
     confirmation of a plan does not discharge a debtor which is a 
     corporation from any debt for a tax or customs duty with 
     respect to which the debtor made a fraudulent return or

[[Page H9973]]

     willfully attempted in any manner to evade or defeat such 
     tax.''.

     SEC. 809. STAY OF TAX PROCEEDINGS.

       (a) Section 362 Stay Limited to Prepetition Taxes.--Section 
     362(a)(8) of title 11, United States Code, is amended by 
     striking the period at the end and inserting ``, in respect 
     of a tax liability for a taxable period ending before the 
     order for relief.''.
       (b) Appeal of Tax Court Decisions Permitted.--Section 
     362(b)(9) of title 11, United States Code, is amended--
       (1) in subparagraph (C) by striking ``or'' at the end;
       (2) in subparagraph (D) by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(E) the appeal of a decision by a court or administrative 
     tribunal which determines a tax liability of the debtor 
     without regard to whether such determination was made 
     prepetition or postpetition.''.

     SEC. 810. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.

       Section 1129(a)(9) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (B) by striking ``and'' at the end; and
       (2) in subparagraph (C)--
       (A) by striking ``deferred cash payments, over a period not 
     exceeding six years after the date of assessment of such 
     claim,'' and inserting ``regular installment payments in 
     cash, but in no case with a balloon provision, and no more 
     than three months apart, beginning no later than the 
     effective date of the plan and ending on the earlier of five 
     years after the petition date or the last date payments are 
     to be made under the plan to unsecured creditors,'';
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (3) by adding at the end the following:
       ``(D) with respect to a secured claim which would be 
     described in section 507(a)(8) of this title but for its 
     secured status, the holder of such claim will receive on 
     account of such claim cash payments of not less than is 
     required in subparagraph (C) and over a period no greater 
     than is required in such subparagraph.''.

     SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

       Section 545(2) of title 11, United States Code, is amended 
     by striking the semicolon at the end and inserting ``, except 
     where such purchaser is a purchaser described in section 6323 
     of the Internal Revenue Code of 1986 or similar provision of 
     State or local law;''.

     SEC. 812. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.

       (a) Payment of Taxes Required.--Section 960 of title 28, 
     United States Code, is amended--
       (1) by inserting ``(a)'' before ``Any''; and
       (2) by adding at the end the following:
       ``(b) Such taxes shall be paid when due in the conduct of 
     such business unless--
       ``(1) the tax is a property tax secured by a lien against 
     property that is abandoned within a reasonable time after the 
     lien attaches, by the trustee of a bankruptcy estate, 
     pursuant to section 554 of title 11; or
       ``(2) payment of the tax is excused under a specific 
     provision of title 11.
       ``(c) In a case pending under chapter 7 of title 11, 
     payment of a tax may be deferred until final distribution is 
     made under section 726 of title 11 if--
       ``(1) the tax was not incurred by a trustee duly appointed 
     under chapter 7 of title 11; or
       ``(2) before the due date of the tax, the court has made a 
     finding of probable insufficiency of funds of the estate to 
     pay in full the administrative expenses allowed under section 
     503(b) of title 11 that have the same priority in 
     distribution under section 726(b) of title 11 as such tax.''.
       (b) Payment of Ad Valorem Taxes Required.--Section 
     503(b)(1)(B) of title 11, United States Code, is amended in 
     clause (i) by inserting after ``estate,'' and before 
     ``except'' the following: ``whether secured or unsecured, 
     including property taxes for which liability is in rem only, 
     in personam or both,''.
       (c) Request for Payment of Administrative Expense Taxes 
     Eliminated.--Section 503(b)(1) of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(D) notwithstanding the requirements of subsection (a) of 
     this section, a governmental unit shall not be required to 
     file a request for the payment of a claim described in 
     subparagraph (B) or (C);''.
       (d) Payment of Taxes and Fees as Secured Claims.--Section 
     506 of title 11, United States Code, is amended--
       (1) in subsection (b) by inserting ``or State statute'' 
     after ``agreement''; and
       (2) in subsection (c) by inserting ``, including the 
     payment of all ad valorem property taxes in respect of the 
     property'' before the period at the end.

     SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.

       Section 726(a)(1) of title 11, United States Code, is 
     amended by striking ``before the date on which the trustee 
     commences distribution under this section'' and inserting 
     ``on or before the earlier of 10 days after the mailing to 
     creditors of the summary of the trustee's final report or the 
     date on which the trustee commences final distribution under 
     this section''.

     SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.

       Section 523(a)(1)(B) of title 11, United States Code, is 
     amended--
       (1) by inserting ``or equivalent report or notice,'' after 
     ``a return,'';
       (2) in clause (i)--
       (A) by inserting ``or given'' after ``filed''; and
       (B) by striking ``or'' at the end;
       (3) in clause (ii)--
       (A) by inserting ``or given'' after ``filed''; and
       (B) by inserting ``, report, or notice'' after ``return''; 
     and
       (4) by adding at the end the following:
       ``(iii) for purposes of this subsection, a return--

       ``(I) must satisfy the requirements of applicable 
     nonbankruptcy law, and includes a return prepared pursuant to 
     section 6020(a) of the Internal Revenue Code of 1986, or 
     similar State or local law, or a written stipulation to a 
     judgment entered by a nonbankruptcy tribunal, but does not 
     include a return made pursuant to section 6020(b) of the 
     Internal Revenue Code of 1986, or similar State or local law; 
     and
       ``(II) must have been filed in a manner permitted by 
     applicable nonbankruptcy law; or''.

     SEC. 815. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID 
                   TAXES.

       Section 505(b) of title 11, United States Code, is amended 
     in the second sentence by inserting ``the estate,'' after 
     ``misrepresentation,''.

     SEC. 816. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 
                   13 PLANS.

       (a) Filing of Prepetition Tax Returns Required for Plan 
     Confirmation.--Section 1325(a) of title 11, United States 
     Code, as amended by section 143, is amended--
       (1) in paragraph (6) by striking ``and'' at the end;
       (2) in paragraph (7) by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(8) if the debtor has filed all Federal, State, and local 
     tax returns as required by section 1308 of this title.''.
       (b) Additional Time Permitted for Filing Tax Returns.--(1) 
     Chapter 13 of title 11, United States Code, as amended by 
     section 137, is amended by adding at the end the following:

     ``Sec. 1308. Filing of prepetition tax returns

       ``(a) On or before the day prior to the day on which the 
     first meeting of the creditors is convened under section 
     341(a) of this title, the debtor shall have filed with 
     appropriate tax authorities all tax returns for all taxable 
     periods ending in the 3-year period ending on the date of 
     filing of the petition.
       ``(b) If the tax returns required by subsection (a) have 
     not been filed by the date on which the first meeting of 
     creditors is convened under section 341(a) of this title, the 
     trustee may continue such meeting for a reasonable period of 
     time, to allow the debtor additional time to file any unfiled 
     returns, but such additional time shall be no more than--
       ``(1) for returns that are past due as of the date of the 
     filing of the petition, 120 days from such date;
       ``(2) for returns which are not past due as of the date of 
     the filing of the petition, the later of 120 days from such 
     date or the due date for such returns under the last 
     automatic extension of time for filing such returns to which 
     the debtor is entitled, and for which request has been timely 
     made, according to applicable nonbankruptcy law; and
       ``(3) upon notice and hearing, and order entered before the 
     lapse of any deadline fixed according to this subsection, 
     where the debtor demonstrates, by clear and convincing 
     evidence, that the failure to file the returns as required is 
     because of circumstances beyond the control of the debtor, 
     the court may extend the deadlines set by the trustee as 
     provided in this subsection for--
       ``(A) a period of no more than 30 days for returns 
     described in paragraph (1) of this subsection; and
       ``(B) for no more than the period of time ending on the 
     applicable extended due date for the returns described in 
     paragraph (2).
       ``(c) For purposes of this section only, a return includes 
     a return prepared pursuant to section 6020 (a) or (b) of the 
     Internal Revenue Code of 1986 or similar State or local law, 
     or a written stipulation to a judgment entered by a 
     nonbankruptcy tribunal.''.
       (2) The table of sections of chapter 13 of title 11, United 
     States Code, is amended by inserting after the item relating 
     to section 1307 the following:

``1308. Filing of prepetition tax returns.''.
       (c) Dismissal or Conversion on Failure To Comply.--Section 
     1307 of title 11, United States Code, is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (2) by inserting after subsection (d) the following:
       ``(e) Upon the failure of the debtor to file tax returns 
     under section 1308 of this title, on request of a party in 
     interest or the United States trustee and after notice and a 
     hearing, the court shall dismiss a case or convert a case 
     under this chapter to a case under chapter 7 of this title, 
     whichever is in the best interests of creditors and the 
     estate.''.
       (d) Timely Filed Claims.--Section 502(b)(9) of title 11, 
     United States Code, is amended by striking the period at the 
     end and inserting ``, and except that in a case under chapter 
     13 of this title, a claim of a governmental unit for a tax in 
     respect of a return filed under section 1308 of this title 
     shall be timely if it is filed on or before 60 days after 
     such return or returns were filed as required.''.
       (e) Rules for Objections to Claims and to Confirmation.--It 
     is the sense of the Congress that the Advisory Committee on 
     Bankruptcy Rules of the Judicial Conference should, within a 
     reasonable period of time after the date of the enactment of 
     this Act, propose for adoption amended Federal Rules of 
     Bankruptcy Procedure which provide that--
       (1) notwithstanding the provisions of Rule 3015(f), in 
     cases under chapter 13 of title 11, United States Code, a 
     governmental unit may object to the confirmation of a plan on 
     or before 60 days after the debtor files all tax returns 
     required under sections 1308 and 1325(a)(7) of title 11, 
     United States Code; and

[[Page H9974]]

       (2) in addition to the provisions of Rule 3007, in a case 
     under chapter 13 of title 11, United States Code, no 
     objection to a tax in respect of a return required to be 
     filed under such section 1308 shall be filed until such 
     return has been filed as required.

     SEC. 817. STANDARDS FOR TAX DISCLOSURE.

       Section 1125(a) of title 11, United States Code, is amended 
     in paragraph (1)--
       (1) by inserting after ``records,'' the following: 
     ``including a full discussion of the potential material 
     Federal, State, and local tax consequences of the plan to the 
     debtor, any successor to the debtor, and a hypothetical 
     investor domiciled in the State in which the debtor resides 
     or has its principal place of business typical of the holders 
     of claims or interests in the case,'';
       (2) by inserting ``such'' after ``enable''; and
       (3) by striking ``reasonable'' where it appears after 
     ``hypothetical'' and by striking ``typical of holders of 
     claims or interests'' after ``investor''.

     SEC. 818. SETOFF OF TAX REFUNDS.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 120, 134, 139, and 203, is amended--
       (1) in paragraph (29) by striking ``or'';
       (2) in paragraph (29) by striking the period at the end and 
     inserting ``; or''; and
       (3) by inserting after paragraph (29) the following:
       ``(30) under subsection (a) of the setoff of an income tax 
     refund, by a governmental unit, in respect of a taxable 
     period which ended before the order for relief against an 
     income tax liability for a taxable period which also ended 
     before the order for relief, unless--
       ``(A) prior to such setoff, an action to determine the 
     amount or legality of such tax liability under section 505(a) 
     was commenced; or
       ``(B) where the setoff of an income tax refund is not 
     permitted because of a pending action to determine the amount 
     or legality of a tax liability, the governmental unit may 
     hold the refund pending the resolution of the action.''.

            TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES

     SEC. 901. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED 
                   STATES CODE.

       (a) In General.--Title 11, United States Code, is amended 
     by inserting after chapter 13 the following:

          ``CHAPTER 15--ANCILLARY AND OTHER CROSS-BORDER CASES

``Sec.
``1501. Purpose and scope of application.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

``1502. Definitions.
``1503. International obligations of the United States.
``1504. Commencement of ancillary case.
``1505. Authorization to act in a foreign country.
``1506. Public policy exception.
``1507. Additional assistance.
``1508. Interpretation.

``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE 
                                 COURT

``1509. Right of direct access.
``1510. Limited jurisdiction.
``1511. Commencement of case under section 301 or 303.
``1512. Participation of a foreign representative in a case under this 
              title.
``1513. Access of foreign creditors to a case under this title.
``1514. Notification to foreign creditors concerning a case under this 
              title.

    ``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF

``1515. Application for recognition of a foreign proceeding.
``1516. Presumptions concerning recognition.
``1517. Order recognizing a foreign proceeding.
``1518. Subsequent information.
``1519. Relief that may be granted upon petition for recognition of a 
              foreign proceeding.
``1520. Effects of recognition of a foreign main proceeding.
``1521. Relief that may be granted upon recognition of a foreign 
              proceeding.
``1522. Protection of creditors and other interested persons.
``1523. Actions to avoid acts detrimental to creditors.
``1524. Intervention by a foreign representative.

     ``SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN 
                            REPRESENTATIVES

``1525. Cooperation and direct communication between the court and 
              foreign courts or foreign representatives.
``1526. Cooperation and direct communication between the trustee and 
              foreign courts or foreign representatives.
``1527. Forms of cooperation.

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

``1528. Commencement of a case under this title after recognition of a 
              foreign main proceeding.
``1529. Coordination of a case under this title and a foreign 
              proceeding.
``1530. Coordination of more than 1 foreign proceeding.
``1531. Presumption of insolvency based on recognition of a foreign 
              main proceeding.
``1532. Rule of payment in concurrent proceedings.

     ``Sec. 1501. Purpose and scope of application

       ``(a) The purpose of this of chapter is to incorporate the 
     Model Law on Cross-Border Insolvency so as to provide 
     effective mechanisms for dealing with cases of cross-border 
     insolvency with the objectives of--
       ``(1) cooperation between--
       ``(A) United States courts, United States Trustees, 
     trustees, examiners, debtors, and debtors in possession; and
       ``(B) the courts and other competent authorities of foreign 
     countries involved in cross-border insolvency cases;
       ``(2) greater legal certainty for trade and investment;
       ``(3) fair and efficient administration of cross-border 
     insolvencies that protects the interests of all creditors, 
     and other interested entities, including the debtor;
       ``(4) protection and maximization of the value of the 
     debtor's assets; and
       ``(5) facilitation of the rescue of financially troubled 
     businesses, thereby protecting investment and preserving 
     employment.
       ``(b) This chapter applies where--
       ``(1) assistance is sought in the United States by a 
     foreign court or a foreign representative in connection with 
     a foreign proceeding;
       ``(2) assistance is sought in a foreign country in 
     connection with a case under this title;
       ``(3) a foreign proceeding and a case under this title with 
     respect to the same debtor are taking place concurrently; or
       ``(4) creditors or other interested persons in a foreign 
     country have an interest in requesting the commencement of, 
     or participating in, a case or proceeding under this title.
       ``(c) This chapter does not apply to--
       ``(1) a proceeding concerning an entity identified by 
     exclusion in subsection 109(b);
       ``(2) an individual, or to an individual and such 
     individual's spouse, who have debts within the limits 
     specified in section 109(e) and who are citizens of the 
     United States or aliens lawfully admitted for permanent 
     residence in the United States; or
       ``(3) an entity subject to a proceeding under the 
     Securities Investor Protection Act, a stockbroker subject to 
     subchapter III of chapter 7 of this title, or a commodity 
     broker subject to subchapter IV of chapter 7 of this title.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

     ``Sec. 1502. Definitions

       ``For the purposes of this chapter, the term--
       ``(1) `debtor' means an entity that is the subject of a 
     foreign proceeding;
       ``(2) `establishment' means any place of operations where 
     the debtor carries out a nontransitory economic activity;
       ``(3) `foreign court' means a judicial or other authority 
     competent to control or supervise a foreign proceeding;
       ``(4) `foreign main proceeding' means a foreign proceeding 
     taking place in the country where the debtor has the center 
     of its main interests;
       ``(5) `foreign nonmain proceeding' means a foreign 
     proceeding, other than a foreign main proceeding, taking 
     place in a country where the debtor has an establishment;
       ``(6) `trustee' includes a trustee, a debtor in possession 
     in a case under any chapter of this title, or a debtor under 
     chapter 9 of this title; and
       ``(7) `within the territorial jurisdiction of the United 
     States' when used with reference to property of a debtor 
     refers to tangible property located within the territory of 
     the United States and intangible property deemed under 
     applicable nonbankruptcy law to be located within that 
     territory, including any property subject to attachment or 
     garnishment that may properly be seized or garnished by an 
     action in a Federal or State court in the United States.

     ``Sec. 1503. International obligations of the United States

       ``To the extent that this chapter conflicts with an 
     obligation of the United States arising out of any treaty or 
     other form of agreement to which it is a party with 1 or more 
     other countries, the requirements of the treaty or agreement 
     prevail.

     ``Sec. 1504. Commencement of ancillary case

       ``A case under this chapter is commenced by the filing of a 
     petition for recognition of a foreign proceeding under 
     section 1515.

     ``Sec. 1505. Authorization to act in a foreign country

       ``A trustee or another entity, including an examiner, may 
     be authorized by the court to act in a foreign country on 
     behalf of an estate created under section 541. An entity 
     authorized to act under this section may act in any way 
     permitted by the applicable foreign law.

     ``Sec. 1506. Public policy exception

       ``Nothing in this chapter prevents the court from refusing 
     to take an action governed by this chapter if the action 
     would be manifestly contrary to the public policy of the 
     United States.

     ``Sec. 1507. Additional assistance

       ``(a) Subject to the specific limitations stated elsewhere 
     in this chapter the court, upon recognition of a foreign 
     proceeding, to provide additional assistance to a foreign 
     representative under this title or under other laws of the 
     United States.
       ``(b) In determining whether to provide additional 
     assistance under this title or under other laws of the United 
     States, the court shall consider whether such additional 
     assistance, consistent with the principles of comity, will 
     reasonably assure--
       ``(1) just treatment of all holders of claims against or 
     interests in the debtor's property;
       ``(2) protection of claim holders in the United States 
     against prejudice and inconvenience in the processing of 
     claims in such foreign proceeding;
       ``(3) prevention of preferential or fraudulent dispositions 
     of property of the debtor;
       ``(4) distribution of proceeds of the debtor's property 
     substantially in accordance with the order prescribed by this 
     title; and
       ``(5) if appropriate, the provision of an opportunity for a 
     fresh start for the individual that such foreign proceeding 
     concerns.

     ``Sec. 1508. Interpretation

       ``In interpreting this chapter, the court shall consider 
     its international origin, and the need

[[Page H9975]]

     to promote an application of this chapter that is consistent 
     with the application of similar statutes adopted by foreign 
     jurisdictions.

``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE 
                                 COURT

     ``Sec. 1509. Right of direct access

       ``(a) A foreign representative is entitled to commence a 
     case under section 1504 by filing a petition for recognition 
     under section 1515, and upon recognition, to apply directly 
     to other Federal and State courts for appropriate relief in 
     those courts.
       ``(b) Upon recognition, and subject to section 1510, a 
     foreign representative has the capacity to sue and be sued, 
     and shall be subject to the laws of the United States of 
     general applicability.
       ``(c) Subject to section 1510 of this title, a foreign 
     representative is subject to laws of general application.
       ``(d) Recognition under this chapter is prerequisite to the 
     granting of comity or cooperation to a foreign representative 
     in any State or Federal court in the United States. Any 
     request for comity or cooperation by a foreign representative 
     in any court shall be accompanied by a sworn statement 
     setting forth whether recognition under section 1515 has been 
     sought and the status of any such petition.
       ``(e) Upon denial of recognition under this chapter, the 
     court may issue appropriate orders necessary to prevent an 
     attempt to obtain comity or cooperation from courts in the 
     United States without such recognition.

     ``Sec. 1510. Limited jurisdiction

       ``The sole fact that a foreign representative files a 
     petition under section 1515 does not subject the foreign 
     representative to the jurisdiction of any court in the United 
     States for any other purpose.

     ``Sec. 1511. Commencement of case under section 301 or 303

       ``(a) Upon recognition, a foreign representative may 
     commence--
       ``(1) an involuntary case under section 303; or
       ``(2) a voluntary case under section 301 or 302, if the 
     foreign proceeding is a foreign main proceeding.
       ``(b) The petition commencing a case under subsection (a) 
     must be accompanied by a statement describing the petition 
     for recognition and its current status. The court where the 
     petition for recognition has been filed must be advised of 
     the foreign representative's intent to commence a case under 
     subsection (a) prior to such commencement.

     ``Sec. 1512. Participation of a foreign representative in a 
       case under this title

       ``Upon recognition of a foreign proceeding, the foreign 
     representative in that proceeding is entitled to participate 
     as a party in interest in a case regarding the debtor under 
     this title.

     ``Sec. 1513. Access of foreign creditors to a case under this 
       title

       ``(a) Foreign creditors have the same rights regarding the 
     commencement of, and participation in, a case under this 
     title as domestic creditors.
       ``(b)(1) Subsection (a) does not change or codify present 
     law as to the priority of claims under section 507 or 726 of 
     this title, except that the claim of a foreign creditor under 
     those sections shall not be given a lower priority than that 
     of general unsecured claims without priority solely because 
     the holder of such claim is a foreign creditor.
       ``(2)(A) Subsection (a) and paragraph (1) do not change or 
     codify present law as to the allowability of foreign revenue 
     claims or other foreign public law claims in a proceeding 
     under this title.
       ``(B) Allowance and priority as to a foreign tax claim or 
     other foreign public law claim shall be governed by any 
     applicable tax treaty of the United States, under the 
     conditions and circumstances specified therein.

     ``Sec. 1514. Notification to foreign creditors concerning a 
       case under this title

       ``(a) Whenever in a case under this title notice is to be 
     given to creditors generally or to any class or category of 
     creditors, such notice shall also be given to the known 
     creditors generally, or to creditors in the notified class or 
     category, that do not have addresses in the United States. 
     The court may order that appropriate steps be taken with a 
     view to notifying any creditor whose address is not yet 
     known.
       ``(b) Such notification to creditors with foreign addresses 
     described in subsection (a) shall be given individually, 
     unless the court considers that, under the circumstances, 
     some other form of notification would be more appropriate. No 
     letters rogatory or other similar formality is required.
       ``(c) When a notification of commencement of a case is to 
     be given to foreign creditors, the notification shall--
       ``(1) indicate the time period for filing proofs of claim 
     and specify the place for their filing;
       ``(2) indicate whether secured creditors need to file their 
     proofs of claim; and
       ``(3) contain any other information required to be included 
     in such a notification to creditors pursuant to this title 
     and the orders of the court.
       ``(d) Any rule of procedure or order of the court as to 
     notice or the filing of a claim shall provide such additional 
     time to creditors with foreign addresses as is reasonable 
     under the circumstances.

    ``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF

     ``Sec. 1515. Application for recognition of a foreign 
       proceeding

       ``(a) A foreign representative applies to the court for 
     recognition of the foreign proceeding in which the foreign 
     representative has been appointed by filing a petition for 
     recognition.
       ``(b) A petition for recognition shall be accompanied by--
       ``(1) a certified copy of the decision commencing the 
     foreign proceeding and appointing the foreign representative;
       ``(2) a certificate from the foreign court affirming the 
     existence of the foreign proceeding and of the appointment of 
     the foreign representative; or
       ``(3) in the absence of evidence referred to in paragraphs 
     (1) and (2), any other evidence acceptable to the court of 
     the existence of the foreign proceeding and of the 
     appointment of the foreign representative.
       ``(c) A petition for recognition shall also be accompanied 
     by a statement identifying all foreign proceedings with 
     respect to the debtor that are known to the foreign 
     representative.
       ``(d) The documents referred to in paragraphs (1) and (2) 
     of subsection (b) must be translated into English. The court 
     may require a translation into English of additional 
     documents.

     ``Sec. 1516. Presumptions concerning recognition

       ``(a) If the decision or certificate referred to in section 
     1515(b) indicates that the foreign proceeding is a foreign 
     proceeding as defined in section 101 and that the person or 
     body is a foreign representative as defined in section 101, 
     the court is entitled to so presume.
       ``(b) The court is entitled to presume that documents 
     submitted in support of the petition for recognition are 
     authentic, whether or not they have been legalized.
       ``(c) In the absence of evidence to the contrary, the 
     debtor's registered office, or habitual residence in the case 
     of an individual, is presumed to be the center of the 
     debtor's main interests.

     ``Sec. 1517. Order recognizing a foreign proceeding

       ``(a) Subject to section 1506, after notice and a hearing 
     an order recognizing a foreign proceeding shall be entered 
     if--
       ``(1) the foreign proceeding is a foreign main proceeding 
     or foreign nonmain proceeding within the meaning of section 
     1502;
       ``(2) the foreign representative applying for recognition 
     is a person or body as defined in section 101; and
       ``(3) the petition meets the requirements of section 1515.
       ``(b) The foreign proceeding shall be recognized--
       ``(1) as a foreign main proceeding if it is taking place in 
     the country where the debtor has the center of its main 
     interests; or
       ``(2) as a foreign nonmain proceeding if the debtor has an 
     establishment within the meaning of section 1502 in the 
     foreign country where the proceeding is pending.
       ``(c) A petition for recognition of a foreign proceeding 
     shall be decided upon at the earliest possible time. Entry of 
     an order recognizing a foreign proceeding shall constitute 
     recognition under this chapter.
       ``(d) The provisions of this subchapter do not prevent 
     modification or termination of recognition if it is shown 
     that the grounds for granting it were fully or partially 
     lacking or have ceased to exist, but in considering such 
     action the court shall give due weight to possible prejudice 
     to parties that have relied upon the granting of recognition. 
     The case under this chapter may be closed in the manner 
     prescribed for a case under section 350.

     ``Sec. 1518. Subsequent information

       ``From the time of filing the petition for recognition of 
     the foreign proceeding, the foreign representative shall file 
     with the court promptly a notice of change of status 
     concerning--
       ``(1) any substantial change in the status of the foreign 
     proceeding or the status of the foreign representative's 
     appointment; and
       ``(2) any other foreign proceeding regarding the debtor 
     that becomes known to the foreign representative.

     ``Sec. 1519. Relief that may be granted upon petition for 
       recognition of a foreign proceeding

       ``(a) From the time of filing a petition for recognition 
     until the petition is decided upon, the court may, at the 
     request of the foreign representative, where relief is 
     urgently needed to protect the assets of the debtor or the 
     interests of the creditors, grant relief of a provisional 
     nature, including--
       ``(1) staying execution against the debtor's assets;
       ``(2) entrusting the administration or realization of all 
     or part of the debtor's assets located in the United States 
     to the foreign representative or another person authorized by 
     the court, including an examiner, in order to protect and 
     preserve the value of assets that, by their nature or because 
     of other circumstances, are perishable, susceptible to 
     devaluation or otherwise in jeopardy; and
       ``(3) any relief referred to in paragraph (3), (4), or (7) 
     of section 1521(a).
       ``(b) Unless extended under section 1521(a)(6), the relief 
     granted under this section terminates when the petition for 
     recognition is decided upon.
       ``(c) It is a ground for denial of relief under this 
     section that such relief would interfere with the 
     administration of a foreign main proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under this section.

     ``Sec. 1520. Effects of recognition of a foreign main 
       proceeding

       ``(a) Upon recognition of a foreign proceeding that is a 
     foreign main proceeding--
       ``(1) section 362 applies with respect to the debtor and 
     that property of the debtor that is within the territorial 
     jurisdiction of the United States;
       ``(2) a transfer, an encumbrance, or any other disposition 
     of an interest of the debtor in property within the 
     territorial jurisdiction of the

[[Page H9976]]

     United States is restrained as and to the extent that is 
     provided for property of an estate under sections 363, 549, 
     and 552; and
       ``(3) unless the court orders otherwise, the foreign 
     representative may operate the debtor's business and may 
     exercise the powers of a trustee under section 549, subject 
     to sections 363 and 552.
       ``(b) The scope, and the modification or termination, of 
     the stay and restraints referred to in subsection (a) are 
     subject to the exceptions and limitations provided in 
     subsections (b), (c), and (d) of section 362, subsections (b) 
     and (c) of section 363, and sections 552, 555 through 557, 
     559, and 560.
       ``(c) Subsection (a) does not affect the right to commence 
     individual actions or proceedings in a foreign country to the 
     extent necessary to preserve a claim against the debtor.
       ``(d) Subsection (a) does not affect the right of a foreign 
     representative or an entity to file a petition commencing a 
     case under this title or the right of any party to file 
     claims or take other proper actions in such a case.

     ``Sec. 1521. Relief that may be granted upon recognition of a 
       foreign proceeding

       ``(a) Upon recognition of a foreign proceeding, whether 
     main or nonmain, where necessary to effectuate the purpose of 
     this chapter and to protect the assets of the debtor or the 
     interests of the creditors, the court may, at the request of 
     the foreign representative, grant any appropriate relief, 
     including--
       ``(1) staying the commencement or continuation of 
     individual actions or individual proceedings concerning the 
     debtor's assets, rights, obligations or liabilities to the 
     extent they have not been stayed under section 1520(a);
       ``(2) staying execution against the debtor's assets to the 
     extent it has not been stayed under section 1520(a);
       ``(3) suspending the right to transfer, encumber or 
     otherwise dispose of any assets of the debtor to the extent 
     this right has not been suspended under section 1520(a);
       ``(4) providing for the examination of witnesses, the 
     taking of evidence or the delivery of information concerning 
     the debtor's assets, affairs, rights, obligations or 
     liabilities;
       ``(5) entrusting the administration or realization of all 
     or part of the debtor's assets within the territorial 
     jurisdiction of the United States to the foreign 
     representative or another person, including an examiner, 
     authorized by the court;
       ``(6) extending relief granted under section 1519(a); and
       ``(7) granting any additional relief that may be available 
     to a trustee, except for relief available under sections 522, 
     544, 545, 547, 548, 550, and 724(a).
       ``(b) Upon recognition of a foreign proceeding, whether 
     main or nonmain, the court may, at the request of the foreign 
     representative, entrust the distribution of all or part of 
     the debtor's assets located in the United States to the 
     foreign representative or another person, including an 
     examiner, authorized by the court, provided that the court is 
     satisfied that the interests of creditors in the United 
     States are sufficiently protected.
       ``(c) In granting relief under this section to a 
     representative of a foreign nonmain proceeding, the court 
     must be satisfied that the relief relates to assets that, 
     under the law of the United States, should be administered in 
     the foreign nonmain proceeding or concerns information 
     required in that proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under paragraphs (1), 
     (2), (3), and (6) of subsection (a).

     ``Sec. 1522. Protection of creditors and other interested 
       persons

       ``(a) The court may grant relief under section 1519 or 
     1521, or may modify or terminate relief under subsection (c), 
     only if the interests of the creditors and other interested 
     entities, including the debtor, are sufficiently protected.
       ``(b) The court may subject relief granted under section 
     1519 or 1521, or the operation of the debtor's business under 
     section 1520(a)(2) of this title, to conditions it considers 
     appropriate, including the giving of security or the filing 
     of a bond.
       ``(c) The court may, at the request of the foreign 
     representative or an entity affected by relief granted under 
     section 1519 or 1521, or at its own motion, modify or 
     terminate such relief.
       ``(d) Section 1104(d) shall apply to the appointment of an 
     examiner under this chapter. Any examiner shall comply with 
     the qualification requirements imposed on a trustee by 
     section 322.

     ``Sec. 1523. Actions to avoid acts detrimental to creditors

       ``(a) Upon recognition of a foreign proceeding, the foreign 
     representative has standing in a case concerning the debtor 
     pending under another chapter of this title to initiate 
     actions under sections 522, 544, 545, 547, 548, 550, and 
     724(a).
       ``(b) When the foreign proceeding is a foreign nonmain 
     proceeding, the court must be satisfied that an action under 
     subsection (a) relates to assets that, under United States 
     law, should be administered in the foreign nonmain 
     proceeding.

     ``Sec. 1524. Intervention by a foreign representative

       ``Upon recognition of a foreign proceeding, the foreign 
     representative may intervene in any proceedings in a State or 
     Federal court in the United States in which the debtor is a 
     party.

     ``SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN 
                            REPRESENTATIVES

     ``Sec. 1525. Cooperation and direct communication between the 
       court and foreign courts or foreign representatives

       ``(a) Consistent with section 1501, the court shall 
     cooperate to the maximum extent possible with foreign courts 
     or foreign representatives, either directly or through the 
     trustee.
       ``(b) The court is entitled to communicate directly with, 
     or to request information or assistance directly from, 
     foreign courts or foreign representatives, subject to the 
     rights of parties in interest to notice and participation.

     ``Sec. 1526. Cooperation and direct communication between the 
       trustee and foreign courts or foreign representatives

       ``(a) Consistent with section 1501, the trustee or other 
     person, including an examiner, authorized by the court, 
     shall, subject to the supervision of the court, cooperate to 
     the maximum extent possible with foreign courts or foreign 
     representatives.
       ``(b) The trustee or other person, including an examiner, 
     authorized by the court is entitled, subject to the 
     supervision of the court, to communicate directly with 
     foreign courts or foreign representatives.

     ``Sec. 1527. Forms of cooperation

       ``Cooperation referred to in sections 1525 and 1526 may be 
     implemented by any appropriate means, including--
       ``(1) appointment of a person or body, including an 
     examiner, to act at the direction of the court;
       ``(2) communication of information by any means considered 
     appropriate by the court;
       ``(3) coordination of the administration and supervision of 
     the debtor's assets and affairs;
       ``(4) approval or implementation of agreements concerning 
     the coordination of proceedings; and
       ``(5) coordination of concurrent proceedings regarding the 
     same debtor.

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

     ``Sec. 1528. Commencement of a case under this title after 
       recognition of a foreign main proceeding

       ``After recognition of a foreign main proceeding, a case 
     under another chapter of this title may be commenced only if 
     the debtor has assets in the United States. The effects of 
     such case shall be restricted to the assets of the debtor 
     that are within the territorial jurisdiction of the United 
     States and, to the extent necessary to implement cooperation 
     and coordination under sections 1525, 1526, and 1527, to 
     other assets of the debtor that are within the jurisdiction 
     of the court under sections 541(a) of this title, and 1334(e) 
     of title 28, to the extent that such other assets are not 
     subject to the jurisdiction and control of a foreign 
     proceeding that has been recognized under this chapter.

     ``Sec. 1529. Coordination of a case under this title and a 
       foreign proceeding

       ``Where a foreign proceeding and a case under another 
     chapter of this title are taking place concurrently regarding 
     the same debtor, the court shall seek cooperation and 
     coordination under sections 1525, 1526, and 1527, and the 
     following shall apply:
       ``(1) When the case in the United States is taking place at 
     the time the petition for recognition of the foreign 
     proceeding is filed--
       ``(A) any relief granted under sections 1519 or 1521 must 
     be consistent with the relief granted in the case in the 
     United States; and
       ``(B) even if the foreign proceeding is recognized as a 
     foreign main proceeding, section 1520 does not apply.
       ``(2) When a case in the United States under this title 
     commences after recognition, or after the filing of the 
     petition for recognition, of the foreign proceeding--
       ``(A) any relief in effect under sections 1519 or 1521 
     shall be reviewed by the court and shall be modified or 
     terminated if inconsistent with the case in the United 
     States; and
       ``(B) if the foreign proceeding is a foreign main 
     proceeding, the stay and suspension referred to in section 
     1520(a) shall be modified or terminated if inconsistent with 
     the relief granted in the case in the United States.
       ``(3) In granting, extending, or modifying relief granted 
     to a representative of a foreign nonmain proceeding, the 
     court must be satisfied that the relief relates to assets 
     that, under the law of the United States, should be 
     administered in the foreign nonmain proceeding or concerns 
     information required in that proceeding.
       ``(4) In achieving cooperation and coordination under 
     sections 1528 and 1529, the court may grant any of the relief 
     authorized under section 305.

     ``Sec. 1530. Coordination of more than 1 foreign proceeding

       ``In matters referred to in section 1501, with respect to 
     more than 1 foreign proceeding regarding the debtor, the 
     court shall seek cooperation and coordination under sections 
     1525, 1526, and 1527, and the following shall apply:
       ``(1) Any relief granted under section 1519 or 1521 to a 
     representative of a foreign nonmain proceeding after 
     recognition of a foreign main proceeding must be consistent 
     with the foreign main proceeding.
       ``(2) If a foreign main proceeding is recognized after 
     recognition, or after the filing of a petition for 
     recognition, of a foreign nonmain proceeding, any relief in 
     effect under section 1519 or 1521 shall be reviewed by the 
     court and shall be modified or terminated if inconsistent 
     with the foreign main proceeding.
       ``(3) If, after recognition of a foreign nonmain 
     proceeding, another foreign nonmain proceeding is recognized, 
     the court shall grant, modify, or terminate relief for the 
     purpose of facilitating coordination of the proceedings.

     ``Sec. 1531. Presumption of insolvency based on recognition 
       of a foreign main proceeding

       ``In the absence of evidence to the contrary, recognition 
     of a foreign main proceeding is for the purpose of commencing 
     a proceeding under section 303, proof that the debtor is 
     generally not paying its debts as such debts become due.

[[Page H9977]]

     ``Sec. 1532. Rule of payment in concurrent proceedings

       ``Without prejudice to secured claims or rights in rem, a 
     creditor who has received payment with respect to its claim 
     in a foreign proceeding pursuant to a law relating to 
     insolvency may not receive a payment for the same claim in a 
     case under any other chapter of this title regarding the 
     debtor, so long as the payment to other creditors of the same 
     class is proportionately less than the payment the creditor 
     has already received.''.
       (b) Clerical Amendment.--The table of chapters for title 
     11, United States Code, is amended by inserting after the 
     item relating to chapter 13 the following:

``15. Ancillary and Other Cross-Border Cases................1501''.....

     SEC. 902. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11, UNITED 
                   STATES CODE.

       (a) Applicability of Chapters.--Section 103 of title 11, 
     United States Code, is amended--
       (1) in subsection (a), by inserting before the period the 
     following: ``, and this chapter, sections 307, 304, 555 
     through 557, 559, and 560 apply in a case under chapter 15''; 
     and
       (2) by adding at the end the following:
       ``(j) Chapter 15 applies only in a case under such chapter, 
     except that--
       ``(1) sections 1513 and 1514 apply in all cases under this 
     title; and
       ``(2) section 1505 applies to trustees and to any other 
     entity (including an examiner) authorized by the court under 
     chapters 7, 11, and 12, to debtors in possession under 
     chapters 11 and 12, and to debtors under chapter 9 who are 
     authorized to act under section 1505.''.
       (b) Definitions.--Paragraphs (23) and (24) of title 11, 
     United States Code, are amended to read as follows:
       ``(23) `foreign proceeding' means a collective judicial or 
     administrative proceeding in a foreign country, including an 
     interim proceeding, pursuant to a law relating to insolvency 
     in which proceeding the assets and affairs of the debtor are 
     subject to control or supervision by a foreign court, for the 
     purpose of reorganization or liquidation;
       ``(24) `foreign representative' means a person or body, 
     including a person or body appointed on an interim basis, 
     authorized in a foreign proceeding to administer the 
     reorganization or the liquidation of the debtor's assets or 
     affairs or to act as a representative of the foreign 
     proceeding;''.
       (c) Amendments to Title 28, United States Code.--
       (1) Procedures.--Section 157(b)(2) of title 28, United 
     States Code, is amended--
       (A) in subparagraph (N), by striking ``and'' at the end;
       (B) in subparagraph (O), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(P) recognition of foreign proceedings and other matters 
     under chapter 15 of title 11.''.
       (2) Bankruptcy cases and proceedings.--Section 1334(c)(1) 
     of title 28, United States Code, is amended by striking 
     ``Nothing in'' and inserting ``Except with respect to a case 
     under chapter 15 of title 11, nothing in''.
       (3) Duties of trustees.--Section 586(a)(3) of title 28, 
     United States Code, is amended by inserting ``15,'' after 
     ``chapter''.

                 TITLE X--FINANCIAL CONTRACT PROVISIONS

     SEC. 1001. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR 
                   --RECEIVERS OF INSURED DEPOSITORY INSTITUTIONS.

       (a) Definition of Qualified Financial Contract.--Section 
     11(e)(8)(D)(i) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(i)) is amended by inserting ``, 
     resolution or order'' after ``any similar agreement that the 
     Corporation determines by regulation''.
       (b) Definition of Securities Contract.--Section 
     11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(ii)) is amended to read as follows:
       ``(ii) Securities contract.--The term `securities 
     contract'--

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, loan, interest, group or index, or option;
       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan unless the Corporation determines by regulation, 
     resolution, or order to include any such agreement within the 
     meaning of such term;

       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, certificates of deposit, or mortgage loans or 
     interests therein (including any interest therein or based on 
     the value thereof) or option on any of the foregoing, 
     including any option to purchase or sell any such security, 
     certificate of deposit, loan, interest, group or index or 
     option;
       ``(V) means any margin loan;
       ``(VI) means any other agreement or transaction that is 
     similar to any agreement or transaction referred to in this 
     clause;
       ``(VII) means any combination of the agreements or 
     transactions referred to in this clause;
       ``(VIII) means any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     (IV), (V), (VI), (VII), or (VIII), together with all 
     supplements to any such master agreement, without regard to 
     whether the master agreement provides for an agreement or 
     transaction that is not a securities contract under this 
     clause, except that the master agreement shall be considered 
     to be a securities contract under this clause only with 
     respect to each agreement or transaction under the master 
     agreement that is referred to in subclause (I), (III), (IV), 
     (V), (VI), (VII), or (VIII); and
       ``(X) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this clause.''.

       (c) Definition of Commodity Contract.--Section 
     11(e)(8)(D)(iii) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(iii)) is amended to read as follows:
       ``(iii) Commodity contract.--The term `commodity contract' 
     means--

       ``(I) with respect to a futures commission merchant, a 
     contract for the purchase or sale of a commodity for future 
     delivery on, or subject to the rules of, a contract market or 
     board of trade;
       ``(II) with respect to a foreign futures commission 
     merchant, a foreign future;
       ``(III) with respect to a leverage transaction merchant, a 
     leverage transaction;
       ``(IV) with respect to a clearing organization, a contract 
     for the purchase or sale of a commodity for future delivery 
     on, or subject to the rules of, a contract market or board of 
     trade that is cleared by such clearing organization, or 
     commodity option traded on, or subject to the rules of, a 
     contract market or board of trade that is cleared by such 
     clearing organization;
       ``(V) with respect to a commodity options dealer, a 
     commodity option;
       ``(VI) any other agreement or transaction that is similar 
     to any agreement or transaction referred to in this clause;
       ``(VII) any combination of the agreements or transactions 
     referred to in this clause;
       ``(VIII) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), (IV), 
     (V), (VI), (VII), or (VIII), together with all supplements to 
     any such master agreement, without regard to whether the 
     master agreement provides for an agreement or transaction 
     that is not a commodity contract under this clause, except 
     that the master agreement shall be considered to be a 
     commodity contract under this clause only with respect to 
     each agreement or transaction under the master agreement that 
     is referred to in subclause (I), (II), (III), (IV), (V), 
     (VI), (VII), or (VIII); or
       ``(X) a security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this clause.''.

       (d) Definition of Forward Contract.--Section 
     11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:
       ``(iv) Forward contract.--The term `forward contract' 
     means--

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date the 
     contract is entered into, including a repurchase 
     agreement, reverse repurchase agreement, consignment, 
     lease, swap, hedge transaction, deposit, loan, option, 
     allocated transaction, unallocated transaction, or any 
     other similar agreement;

       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);
       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or
       ``(V) a security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV).''.

       (e) Definition of Repurchase Agreement.--Section 
     11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(v)) is amended to read as follows:
       ``(v) Repurchase agreement.--The terms `repurchase 
     agreement' and `reverse repurchase agreement'--

       ``(I) mean an agreement, including related terms, which 
     provides for the transfer of 1 or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in the Securities Exchange Act of 1934), mortgage loans, 
     interests in mortgage-related securities or mortgage loans, 
     eligible bankers' acceptances, qualified foreign government 
     securities or securities that are direct obligations of, or 
     that are fully guaranteed by, the United States or any agency 
     of the United States against the transfer of funds by the 
     transferee of such certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests with a 
     simultaneous agreement by such transferee to transfer to the 
     transferor thereof certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests as described 
     above, at a date certain not later than 1 year after such 
     transfers or on demand, against the transfer of funds, or any 
     other similar agreement;

[[Page H9978]]

       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan unless the 
     Corporation determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means a security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V).

     For purposes of this clause, the term `qualified foreign 
     government security' means a security that is a direct 
     obligation of, or that is fully guaranteed by, the central 
     government of a member of the Organization for Economic 
     Cooperation and Development (as determined by regulation or 
     order adopted by the appropriate Federal banking 
     authority).''.
       (f) Definition of Swap Agreement.--The Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is amended to 
     read as follows:
       ``(vi) Swap agreement.--The term `swap agreement' means--

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or 
     precious metals agreement; a currency swap, option, 
     future, or forward agreement; an equity index or equity 
     swap, option, future, or forward agreement; a debt index 
     or debt swap, option, future, or forward agreement; a 
     credit spread or credit swap, option, future, or forward 
     agreement; a commodity index or commodity swap, option, 
     future, or forward agreement;

       ``(II) any agreement or transaction similar to any other 
     agreement or transaction referred to in this clause that is 
     presently, or in the future becomes, regularly entered into 
     in the swap market (including terms and conditions 
     incorporated by reference in such agreement) and that is a 
     forward, swap, future, or option on 1 or more rates, 
     currencies, commodities, equity securities or other equity 
     instruments, debt securities or other debt instruments, or 
     economic indices or measures of economic risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and
       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in subparagraph (I), (II), (III), or (IV).

     Such term is applicable for purposes of this Act only and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     and the regulations promulgated by the Securities and 
     Exchange Commission or the Commodity Futures Trading 
     Commission.''.
       (g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of 
     the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)(D)(viii)) is amended to read as follows:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the depository 
     institutions's equity of redemption.''.
       (h) Treatment of Qualified Financial Contracts.--Section 
     11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)) is amended--
       (1) in subparagraph (A), by striking ``paragraph (10)'' and 
     inserting ``paragraphs (9) and (10)'';
       (2) in subparagraph (A)(i), by striking ``to cause the 
     termination or liquidation'' and inserting ``such person has 
     to cause the termination, liquidation, or acceleration'';
       (3) by amending subparagraph (A)(ii) to read as follows:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''; and
       (4) by amending subparagraph (E)(ii) to read as follows:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''.
       (i) Avoidance of Transfers.--Section 11(e)(8)(C)(i) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is 
     amended by inserting ``section 5242 of the Revised Statutes 
     (12 U.S.C. 91) or any other Federal or State law relating to 
     the avoidance of preferential or fraudulent transfers,'' 
     before ``the Corporation''.

     SEC. 1002. AUTHORITY OF THE CORPORATION WITH RESPECT TO 
                   FAILED AND FAILING INSTITUTIONS.

       (a) In General.--Section 11(e)(8) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
       (1) in subparagraph (E), by striking ``other than paragraph 
     (12) of this subsection, subsection (d)(9)'' and inserting 
     ``other than subsections (d)(9) and (e)(10)''; and
       (2) by adding at the end the following new subparagraphs:
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Corporation, 
     or authorizing any court or agency to limit or delay, in any 
     manner, the right or power of the Corporation to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10) of this subsection or to disaffirm or repudiate 
     any such contract in accordance with subsection (e)(1) of 
     this section.
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of an insured depository institution in 
     default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of such party's status as a 
     nondefaulting party.''.
       (b) Technical and Conforming Amendment.--Section 
     11(e)(12)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(12)(A)) is amended by inserting ``or the exercise of 
     rights or powers'' after ``the appointment''.

     SEC. 1003. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED 
                   FINANCIAL CONTRACTS.

       (a) Transfers of Qualified Financial Contracts to Financial 
     Institutions.--Section 11(e)(9) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(9)) is amended to read as 
     follows:
       ``(9) Transfer of qualified financial contracts.--
       ``(A) In general.--In making any transfer of assets or 
     liabilities of a depository institution in default which 
     includes any qualified financial contract, the conservator or 
     receiver for such depository institution shall either--
       ``(i) transfer to 1 financial institution, other than a 
     financial institution for which a conservator, receiver, 
     trustee in bankruptcy, or other legal custodian has been 
     appointed or which is otherwise the subject of a bankruptcy 
     or insolvency proceeding--

       ``(I) all qualified financial contracts between any person 
     or any affiliate of such person and the depository 
     institution in default;
       ``(II) all claims of such person or any affiliate of such 
     person against such depository institution under any such 
     contract (other than any claim which, under the terms of any 
     such contract, is subordinated to the claims of general 
     unsecured creditors of such institution);
       ``(III) all claims of such depository institution against 
     such person or any affiliate of such person under any such 
     contract; and
       ``(IV) all property securing or any other credit 
     enhancement for any contract described in subclause (I) or 
     any claim described in subclause (II) or (III) under any such 
     contract; or

       ``(ii) transfer none of the qualified financial contracts, 
     claims, property or other credit enhancement referred to in 
     clause (i) (with respect to such person and any affiliate of 
     such person).
       ``(B) Transfer to foreign bank, foreign financial 
     institution, or branch or agency of a foreign bank or 
     financial institution.--In transferring any qualified 
     financial contracts and related claims and property pursuant 
     to subparagraph (A)(i), the conservator or receiver for such 
     depository institution shall not make such transfer to a 
     foreign bank, financial institution organized under the laws 
     of a foreign country, or a branch or agency of a foreign bank 
     or financial institution unless, under the law applicable to 
     such bank, financial institution, branch or agency, to the 
     qualified financial contracts, and to any netting contract, 
     any security agreement or arrangement or other credit 
     enhancement related to 1 or more qualified financial 
     contracts the contractual rights of the parties to such 
     qualified financial contracts, netting contracts, security 
     agreements or arrangements, or other credit enhancements are 
     enforceable substantially to the same extent as permitted 
     under this section.
       ``(C) Transfer of contracts subject to the rules of a 
     clearing organization.--In the event that a conservator or 
     receiver transfers any qualified financial contract and 
     related claims, property and credit enhancements pursuant to 
     subparagraph (A)(i) and such contract is subject to the rules 
     of a clearing organization, the clearing organization shall 
     not be required to accept the transferee as a member by 
     virtue of the transfer.
       ``(D) Definition.--For purposes of this section, the term 
     `financial institution' means a

[[Page H9979]]

     broker or dealer, a depository institution, a futures 
     commission merchant, or any other institution as determined 
     by the Corporation by regulation to be a financial 
     institution.''.
       (b) Notice to Qualified Financial Contract 
     Counterparties.--Section 11(e)(10)(A) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended by 
     amending the flush material following clause (ii) to read as 
     follows: ``the conservator or receiver shall notify any 
     person who is a party to any such contract of such transfer 
     by 5:00 p.m. (eastern time) on the business day following the 
     date of the appointment of the receiver, in the case of a 
     receivership, or the business day following such transfer, in 
     the case of a conservatorship.''.
       (c) Rights Against Receiver and Treatment of Bridge 
     Banks.--Section 11(e)(10) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1821(e)(10)) is further amended--
       (1) by redesignating subparagraph (B) as subparagraph (D); 
     and
       (2) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with an insured depository institution may 
     not exercise any right such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(A) or 
     section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 solely by reason of or 
     incidental to the appointment of a receiver for the 
     depository institution (or the insolvency or financial 
     condition of the depository institution for which the 
     receiver has been appointed)--

       ``(I) until 5:00 p.m. (eastern time) on the business day 
     following the date of the appointment of the receiver; or
       ``(II) after the person has received notice that the 
     contract has been transferred pursuant to paragraph (9)(A).

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with an insured depository 
     institution may not exercise any right such person has to 
     terminate, liquidate, or net such contract under paragraph 
     (8)(E) or sections 403 or 404 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991, solely by 
     reason of or incidental to the appointment of a conservator 
     for the depository institution (or the insolvency or 
     financial condition of the depository institution for which 
     the conservator has been appointed).
       ``(iii) Notice.--For purposes of this subsection, the 
     Corporation as receiver or conservator of an insured 
     depository institution shall be deemed to have notified a 
     person who is a party to a qualified financial contract with 
     such depository institution if the Corporation has taken 
     steps reasonably calculated to provide notice to such person 
     by the time specified in subparagraph (A) of this subsection.
       ``(C) Treatment of bridge banks.--The following 
     institutions shall not be considered a financial institution 
     for which a conservator, receiver, trustee in bankruptcy, or 
     other legal custodian has been appointed or which is 
     otherwise the subject of a bankruptcy or insolvency 
     proceeding for purposes of subsection (e)(9)--
       ``(i) a bridge bank; or
       ``(ii) a depository institution organized by the 
     Corporation, for which a conservator is appointed either--

       ``(I) immediately upon the organization of the institution; 
     or
       ``(II) at the time of a purchase and assumption transaction 
     between such institution and the Corporation as receiver for 
     a depository institution in default.''.

     SEC. 1004. AMENDMENTS RELATING TO DISAFFIRMANCE OR 
                   REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS.

       Section 11(e) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)) is further amended--
       (1) by redesignating paragraphs (11) through (15) as 
     paragraphs (12) through (16), respectively; and
       (2) by inserting after paragraph (10) the following new 
     paragraph:
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which an insured depository 
     institution is a party, the conservator or receiver for such 
     institution shall either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the depository institution in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).''.

     SEC. 1005. CLARIFYING AMENDMENT RELATING TO MASTER 
                   AGREEMENTS.

       Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as 
     follows:
       ``(vii) Treatment of master agreement as 1 agreement.--Any 
     master agreement for any contract or agreement described in 
     any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains 
     provisions relating to agreements or transactions that are 
     not themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.''.

     SEC. 1006. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT 
                   ACT OF 1991.

       (a) Definitions.--Section 402 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
     4402) is amended--
       (1) in paragraph (6)--
       (A) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively;
       (B) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) an uninsured national bank or an uninsured State bank 
     that is a member of the Federal Reserve System if the 
     national bank or State member bank is not eligible to make 
     application to become an insured bank under section 5 of the 
     Federal Deposit Insurance Act;''; and
       (C) by amending subparagraph (C) (as redesignated) to read 
     as follows:
       ``(C) a branch or agency of a foreign bank, a foreign bank 
     and any branch or agency of the foreign bank, or the foreign 
     bank that established the branch or agency, as those terms 
     are defined in section 1(b) of the International Banking Act 
     of 1978;'';
       (2) in paragraph (11), by adding before the period ``and 
     any other clearing organization with which such clearing 
     organization has a netting contract'';
       (3) by amending paragraph (14)(A)(i) to read as follows:
       ``(i) means a contract or agreement between 2 or more 
     financial institutions, clearing organizations, or members 
     that provides for netting present or future payment 
     obligations or payment entitlements (including liquidation or 
     closeout values relating to such obligations or entitlements) 
     among the parties to the agreement; and''; and
       (4) by adding at the end the following new paragraph:
       ``(15) Payment.--The term `payment' means a payment of 
     United States dollars, another currency, or a composite 
     currency, and a noncash delivery, including a payment or 
     delivery to liquidate an unmatured obligation.''.
       (b) Enforceability of Bilateral Netting Contracts.--Section 
     403 of the Federal Deposit Insurance Corporation Improvement 
     Act of 1991 (12 U.S.C. 4403) is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act or any order authorized under section 5(b)(2) of the 
     Securities Investor Protection Act of 1970, the covered 
     contractual payment obligations and the covered contractual 
     payment entitlements between any 2 financial institutions 
     shall be netted in accordance with, and subject to the 
     conditions of, the terms of any applicable netting contract 
     (except as provided in section 561(b)(2) of title 11).''; and
       (2) by adding at the end the following new subsection:
       ``(f) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to 1 or more netting contracts 
     between any 2 financial institutions shall be enforceable in 
     accordance with their terms (except as provided in section 
     561(b)(2) of title 11) and shall not be stayed, avoided, or 
     otherwise limited by any State or Federal law (other than 
     paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of 
     the Federal Deposit Insurance Act and section 5(b)(2) of the 
     Securities Investor Protection Act of 1970).''.
       (c) Enforceability of Clearing Organization Netting 
     Contracts.--Section 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 4404) is 
     amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act and any order authorized under section 5(b)(2) of the 
     Securities Investor Protection Act of 1970, the covered 
     contractual payment obligations and the covered contractual 
     payment entitlements of a member of a clearing organization 
     to and from all other members of a clearing organization 
     shall be netted in accordance with and subject to the 
     conditions of any applicable netting contract (except as 
     provided in section 561(b)(2) of title 11, United States 
     Code).''; and
       (2) by adding at the end the following new subsection:
       ``(h) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to 1 or more netting contracts 
     between any 2 members of a clearing organization shall be 
     enforceable in accordance with their terms (except as 
     provided in section 561(b)(2) of title 11, United States 
     Code) and shall not be stayed, avoided, or otherwise limited 
     by any State or Federal law other than paragraphs (8)(E), 
     (8)(F), and (10)(B) of section 11(e) of the Federal Deposit 
     Insurance Act and section 5(b)(2) of the Securities Investor 
     Protection Act of 1970.''.
       (d) Enforceability of Contracts With Uninsured National 
     Banks and Uninsured Federal Branches and Agencies.--The 
     Federal Deposit Insurance Corporation Improvement Act of 1991 
     (12 U.S.C. 4401 et seq.) is amended--
       (1) by redesignating section 407 as section 408; and
       (2) by adding after section 406 the following new section:

     ``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL 
                   BANKS AND UNINSURED FEDERAL BRANCHES AND 
                   AGENCIES.

       ``(a) In General.--Notwithstanding any other provision of 
     law, paragraphs (8), (9), (10), and (11) of section 11(e) of 
     the Federal Deposit Insurance Act shall apply to an uninsured 
     national bank or uninsured Federal branch or Federal agency 
     except--
       ``(1) any reference to the `Corporation as receiver' or 
     `the receiver or the Corporation' shall

[[Page H9980]]

     refer to the receiver of an uninsured national bank or 
     uninsured Federal branch or Federal agency appointed by the 
     Comptroller of the Currency;
       ``(2) any reference to the `Corporation' (other than in 
     section 11(e)(8)(D) of such Act), the `Corporation, whether 
     acting as such or as conservator or receiver', a `receiver', 
     or a `conservator' shall refer to the receiver or conservator 
     of an uninsured national bank or uninsured Federal branch or 
     Federal agency appointed by the Comptroller of the Currency; 
     and
       ``(3) any reference to an `insured depository institution' 
     or `depository institution' shall refer to an uninsured 
     national bank or an uninsured Federal branch or Federal 
     agency.
       ``(b) Liability.--The liability of a receiver or 
     conservator of an uninsured national bank or uninsured 
     Federal branch or agency shall be determined in the same 
     manner and subject to the same limitations that apply to 
     receivers and conservators of insured depository institutions 
     under section 11(e) of the Federal Deposit Insurance Act.
       ``(c) Regulatory Authority.--
       ``(1) In general.--The Comptroller of the Currency, in 
     consultation with the Federal Deposit Insurance Corporation, 
     may promulgate regulations to implement this section.
       ``(2) Specific requirement.--In promulgating regulations to 
     implement this section, the Comptroller of the Currency shall 
     ensure that the regulations generally are consistent with the 
     regulations and policies of the Federal Deposit Insurance 
     Corporation adopted pursuant to the Federal Deposit Insurance 
     Act.
       ``(d) Definitions.--For purposes of this section, the terms 
     `Federal branch', `Federal agency', and `foreign bank' have 
     the same meaning as in section 1(b) of the International 
     Banking Act.''.

     SEC. 1007. BANKRUPTCY CODE AMENDMENTS.

       (a) Definitions of Forward Contract, Repurchase Agreement, 
     Securities Clearing Agency, Swap Agreement, Commodity 
     Contract, and Securities Contract.--Title 11, United States 
     Code, is amended--
       (1) in section 101--
       (A) in paragraph (25)--
       (i) by striking ``means a contract'' and inserting 
     ``means--
       ``(A) a contract'';
       (ii) by striking ``, or any combination thereof or option 
     thereon;'' and inserting ``, or any other similar 
     agreement;''; and
       (iii) by adding at the end the following:
       ``(B) a combination of agreements or transactions referred 
     to in subparagraphs (A) and (C);
       ``(C) an option to enter into an agreement or transaction 
     referred to in subparagraph (A) or (B);
       ``(D) a master netting agreement that provides for an 
     agreement or transaction referred to in subparagraph (A), 
     (B), or (C), together with all supplements to such master 
     netting agreement, without regard to whether such master 
     netting agreement provides for an agreement or transaction 
     that is not a forward contract under this paragraph, except 
     that such master netting agreement shall be considered to be 
     a forward contract under this paragraph only with respect to 
     each agreement or transaction under such master netting 
     agreement that is referred to in subparagraph (A), (B) or 
     (C); or
       ``(E) a security agreement or arrangement, or other credit 
     enhancement, directly pertaining to a contract, option, 
     agreement, or transaction referred to in subparagraph (A), 
     (B), (C), or (D), but not to exceed the actual value of such 
     contract, option, agreement, or transaction on the date of 
     the filing of the petition;'';
       (B) by amending paragraph (47) to read as follows:
       ``(47) `repurchase agreement' and `reverse repurchase 
     agreement'--
       ``(A) mean--
       ``(i) an agreement, including related terms, which provides 
     for the transfer of--

       ``(I) a certificate of deposit, mortgage-related security 
     (as defined in the Securities Exchange Act of 1934), mortgage 
     loan, interest in a mortgage-related security or mortgage 
     loan, eligible bankers' acceptance, qualified foreign 
     government security; or
       ``(II) security that is a direct obligation of, or that is 
     fully guaranteed by, the United States or an agency of the 
     United States against the transfer of funds by the transferee 
     of such certificate of deposit, eligible bankers' acceptance, 
     security, loan, or interest;

     with a simultaneous agreement by such transferee to transfer 
     to the transferor thereof a certificate of deposit, eligible 
     bankers' acceptance, security, loan, or interest of the kind 
     described in subclause (I) or (II), at a date certain not 
     later than 1 year after the transferor's transfer or on 
     demand, against the transfer of funds;
       ``(ii) a combination of agreements or transactions referred 
     to in clauses (i) and (iii);
       ``(iii) an option to enter into an agreement or transaction 
     referred to in clause (i) or (ii);
       ``(iv) a master netting agreement that provides for an 
     agreement or transaction referred to in clause (i), (ii), or 
     (iii), together with all supplements to such master netting 
     agreement, without regard to whether such master netting 
     agreement provides for an agreement or transaction that is 
     not a repurchase agreement under this subparagraph, except 
     that such master netting agreement shall be considered to be 
     a repurchase agreement under this subparagraph only with 
     respect to each agreement or transaction under such master 
     netting agreement that is referred to in clause (i), (ii), or 
     (iii); or
       ``(v) a security agreement or arrangement, or other credit 
     enhancement, directly pertaining to a contract referred to in 
     clause (i), (ii), (iii), or (iv), but not to exceed the 
     actual value of such contract on the date of the filing of 
     the petition; and
       ``(B) do not include a repurchase obligation under a 
     participation in a commercial mortgage loan;
     and, for purposes of this paragraph, the term `qualified 
     foreign government security' means a security that is a 
     direct obligation of, or that is fully guaranteed by, the 
     central government of a member of the Organization for 
     Economic Cooperation and Development;'';
       (C) in paragraph (48) by inserting ``or exempt from such 
     registration under such section pursuant to an order of the 
     Securities and Exchange Commission'' after ``1934''; and
       (D) by amending paragraph (53B) to read as follows:
       ``(53B) `swap agreement' means--
       ``(A) an agreement, including the terms and conditions 
     incorporated by reference in such agreement, that is--
       ``(i) an interest rate swap, option, future, or forward 
     agreement, including a rate floor, rate cap, rate collar, 
     cross-currency rate swap, and basis swap;
       ``(ii) a spot, same day-tomorrow, tomorrow-next, forward, 
     or other foreign exchange or precious metals agreement;
       ``(iii) a currency swap, option, future, or forward 
     agreement;
       ``(iv) an equity index or an equity swap, option, future, 
     or forward agreement;
       ``(v) a debt index or a debt swap, option, future, or 
     forward agreement;
       ``(vi) a credit spread or a credit swap, option, future, or 
     forward agreement; or
       ``(vii) a commodity index or a commodity swap, option, 
     future, or forward agreement;
       ``(B) an agreement or transaction similar to an agreement 
     or transaction referred to in this paragraph that--
       ``(i) is currently, or in the future becomes, regularly 
     entered into in the swap market (including terms and 
     conditions incorporated by reference therein); and
       ``(ii) is a forward, swap, future, or option on a rate, 
     currency, commodity, equity security, or other equity 
     instrument, on a debt security or other debt instrument, or 
     on an economic index or measure of economic risk or value;
       ``(C) a combination of agreements or transactions referred 
     to in this paragraph;
       ``(D) an option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(E) a master netting agreement that provides for an 
     agreement or transaction referred to in subparagraph (A), 
     (B), (C), or (D), together with all supplements to such 
     master netting agreement and without regard to whether such 
     master netting agreement contains an agreement or transaction 
     described in any such subparagraph, but only with respect to 
     each agreement or transaction referred to in any such 
     subparagraph that is under such master netting agreement; or
       ``(F) is applicable for purposes of this title only and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     and the regulations prescribed by the Securities and Exchange 
     Commission or the Commodity Futures Trading Commission.'';
       (2) by amending section 741(7) to read as follows:
       ``(7) `securities contract'--
       ``(A) means--
       ``(i) a contract for the purchase, sale, or loan of a 
     security, a mortgage loan or an interest in a mortgage loan, 
     a group or index of securities, or mortgage loans or 
     interests therein (including an interest therein or based on 
     the value thereof), or option on any of the foregoing, 
     including an option to purchase or sell any of the foregoing;
       ``(ii) an option entered into on a national securities 
     exchange relating to foreign currencies;
       ``(iii) the guarantee by or to a securities clearing agency 
     of a settlement of cash, securities, mortgage loans or 
     interests therein, group or index of securities, or mortgage 
     loans or interests therein (including any interest therein or 
     based on the value thereof), or option on any of the 
     foregoing, including an option to purchase or sell any of the 
     foregoing;
       ``(iv) a margin loan;
       ``(v) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this subparagraph;
       ``(vi) a combination of the agreements or transactions 
     referred to in this subparagraph;
       ``(vii) an option to enter into an agreement or transaction 
     referred to in this subparagraph;
       ``(viii) a master netting agreement that provides for an 
     agreement or transaction referred to in clause (i), (ii), 
     (iii), (iv), (v), (vi), or (vii), together with all 
     supplements to such master netting agreement, without regard 
     to whether such master netting agreement provides for an 
     agreement or transaction that is not a securities contract 
     under this subparagraph, except that such master netting 
     agreement shall be considered to be a securities contract 
     under this subparagraph only with respect to each agreement 
     or transaction under such master netting agreement that is 
     referred to in clause (i), (ii), (iii), (iv), (v), (vi), or 
     (vii); or
       ``(ix) a security agreement or arrangement, or other credit 
     enhancement, directly pertaining to a contract referred to in 
     this subparagraph, but not to exceed the actual value of such 
     contract on the date of the filing of the petition; and
       ``(B) does not include a purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan;''; and
       (3) in section 761(4)--
       (A) by striking ``or'' at the end of subparagraph (D); and

[[Page H9981]]

       (B) by adding at the end the following:
       ``(F) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(G) a combination of the agreements or transactions 
     referred to in this paragraph;
       ``(H) an option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(I) a master netting agreement that provides for an 
     agreement or transaction referred to in subparagraph (A), 
     (B), (C), (D), (E), (F), (G), or (H), together with all 
     supplements to such master netting agreement, without regard 
     to whether such master netting agreement provides for an 
     agreement or transaction that is not a commodity contract 
     under this paragraph, except that such master netting 
     agreement shall be considered to be a commodity contract 
     under this paragraph only with respect to each agreement or 
     transaction under such master netting agreement that is 
     referred to in subparagraph (A), (B), (C), (D), (E), (F), 
     (G), or (H); or
       ``(J) a security agreement or arrangement, or other credit 
     enhancement, directly pertaining to a contract referred to in 
     this paragraph, but not to exceed the actual value of such 
     contract on the date of the filing of the petition;''.
       (b) Definitions of Financial Institution, Financial 
     Participant, and Forward Contract Merchant.--Section 101 of 
     title 11, United States Code, is amended--
       (1) by amending paragraph (22) to read as follows:
       ``(22) `financial institution' means--
       ``(A) a Federal reserve bank, or an entity that is a 
     commercial or savings bank, industrial savings bank, savings 
     and loan association, trust company, or receiver or 
     conservator for such entity and, when such Federal reserve 
     bank, receiver, or conservator or entity is acting as agent 
     or custodian for a customer in connection with a securities 
     contract, as defined in section 741 of this title, such 
     customer; or
       ``(B) in connection with a securities contract, as defined 
     in section 741 of this title, an investment company 
     registered under the Investment Company Act of 1940;'';
       (2) by inserting after paragraph (22) the following:
       ``(22A) `financial participant' means an entity that is a 
     party to a securities contract, commodity contract or forward 
     contract, or on the date of the filing of the petition, has a 
     commodity contract (as defined in section 761 of this title) 
     with the debtor or any other entity (other than an affiliate) 
     of a total gross dollar value of at least $1,000,000,000 in 
     notional or actual principal amount outstanding on any day 
     during the previous 15-month period, or has gross mark-to-
     market positions of at least $100,000,000 (aggregated across 
     counterparties) in any such agreement or transaction with the 
     debtor or any other entity (other than an affiliate) on any 
     day during the previous 15-month period;''; and
       (3) by amending paragraph (26) to read as follows:
       ``(26) `forward contract merchant' means a Federal reserve 
     bank, or an entity whose business consists in whole or in 
     part of entering into forward contracts as or with merchants 
     or in a commodity, as defined or in section 761 of this 
     title, or any similar good, article, service, right, or 
     interest which is presently or in the future becomes the 
     subject of dealing or in the forward contract trade;''.
       (c) Definition of Master Netting Agreement and Master 
     Netting Agreement Participant.--Section 101 of title 11, 
     United States Code, is amended by inserting after paragraph 
     (38) the following new paragraphs:
       ``(38A) the term `master netting agreement' means an 
     agreement providing for the exercise of rights, including 
     rights of netting, setoff, liquidation, termination, 
     acceleration, or closeout, under or in connection with 1 or 
     more contracts that are described in any 1 or more of 
     paragraphs (1) through (5) of section 561(a), or any security 
     agreement or arrangement or other credit enhancement related 
     to 1 or more of the foregoing. If a master netting agreement 
     contains provisions relating to agreements or transactions 
     that are not contracts described in paragraphs (1) through 
     (5) of section 561(a), the master netting agreement shall be 
     deemed to be a master netting agreement only with respect to 
     those agreements or transactions that are described in any 1 
     or more of the paragraphs (1) through (5) of section 561(a);
       ``(38B) the term `master netting agreement participant' 
     means an entity that, at any time before the filing of the 
     petition, is a party to an outstanding master netting 
     agreement with the debtor;''.
       (d) Swap Agreements, Securities Contracts, Commodity 
     Contracts, Forward Contracts, Repurchase Agreements, and 
     Master Netting Agreements Under the Automatic-Stay.--
       (1) In general.--Section 362(b) of title 11, United States 
     Code, as amended by sections 120, 134, 139, 203 and 818, is 
     amended--
       (A) in paragraph (6), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (B) in paragraph (7), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (C) by amending paragraph (17) to read as follows:
       ``(17) under subsection (a), of the setoff by a swap 
     participant of a mutual debt and claim under or in connection 
     with a swap agreement that constitutes the setoff of a claim 
     against the debtor for a payment or transfer due from the 
     debtor under or in connection with a swap agreement against a 
     payment due to the debtor from the swap participant under or 
     in connection with a swap agreement or against cash, 
     securities, or other property held by, pledged to, and under 
     the control of, or due from such swap participant to 
     guarantee, secure, or settle a swap agreement;'';
       (D) in paragraph (27), by striking ``or'' at the end;
       (E) in paragraph (28) by striking the period at the end and 
     inserting ``; and''; and
       (F) by inserting after paragraph (28) the following new 
     paragraph:
       ``(29) under subsection (a), of the setoff by a master 
     netting agreement participant of a mutual debt and claim 
     under or in connection with 1 or more master netting 
     agreements or any contract or agreement subject to such 
     agreements that constitutes the setoff of a claim against the 
     debtor for any payment or other transfer of property due from 
     the debtor under or in connection with such agreements or any 
     contract or agreement subject to such agreements against any 
     payment due to the debtor from such master netting agreement 
     participant under or in connection with such agreements or 
     any contract or agreement subject to such agreements 
     or against cash, securities, or other property held by, 
     pledged or and under the control of, or due from such 
     master netting agreement participant to margin, guarantee, 
     secure, or settle such agreements or any contract or 
     agreement subject to such agreements, to the extent such 
     participant is eligible to exercise such offset rights 
     under paragraph (6), (7), or (17) for each individual 
     contract covered by the master netting agreement in 
     issue.''.
       (2) Limitation.--Section 362 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(i) Limitation.--The exercise of rights not subject to 
     the stay arising under subsection (a) pursuant to paragraph 
     (6), (7), or (17) of subsection (b) shall not be stayed by an 
     order of a court or administrative agency in any proceeding 
     under this title.''.
       (e) Limitation of Avoidance Powers Under Master Netting 
     Agreement.--Section 546 of title 11, United States Code, is 
     amended--
       (1) in subsection (g) (as added by section 103 of Public 
     Law 101-311)--
       (A) by striking ``under a swap agreement'';
       (B) by striking ``in connection with a swap agreement'' and 
     inserting ``under or in connection with any swap agreement'';
       (2) by redesignating subsection (g) (as added by section 
     222(a) of Public Law 103-394) as subsection (i); and
       (3) by inserting before subsection (i) (as redesignated) 
     the following new subsection:
       ``(h) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), 
     and 548(b) of this title, the trustee may not avoid a 
     transfer made by or to a master netting agreement participant 
     under or in connection with any master netting agreement or 
     any individual contract covered thereby that is made before 
     the commencement of the case, and except to the extent the 
     trustee could otherwise avoid such a transfer made under an 
     individual contract covered by such master netting agreement, 
     except under section 548(a)(1)(A) of this title.''.
       (f) Fraudulent Transfers of Master Netting Agreements.--
     Section 548(d)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (C), by striking ``and'';
       (2) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) a master netting agreement participant that receives 
     a transfer in connection with a master netting agreement or 
     any individual contract covered thereby takes for value to 
     the extent of such transfer, except, with respect to a 
     transfer under any individual contract covered thereby, to 
     the extent such master netting agreement participant 
     otherwise did not take (or is otherwise not deemed to have 
     taken) such transfer for value.''.
       (g) Termination or Acceleration of Securities Contracts.--
     Section 555 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

     ``Sec. 555. Contractual right to liquidate, terminate, or 
       accelerate a securities contract''; and

       (2) in the first sentence, by striking ``liquidation'' and 
     inserting ``liquidation, termination, or acceleration''.
       (h) Termination or Acceleration of Commodities or Forward 
     Contracts.--Section 556 of title 11, United States Code, is 
     amended--
       (1) by amending the section heading to read as follows:

     ``Sec. 556. Contractual right to liquidate, terminate, or 
       accelerate a commodities contract or forward contract''; 
       and

       (2) in the first sentence, by striking ``liquidation'' and 
     inserting ``liquidation, termination, or acceleration''.
       (i) Termination or Acceleration of Repurchase Agreements.--
     Section 559 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

     ``Sec. 559. Contractual right to liquidate, terminate, or 
       accelerate a repurchase agreement''; and

       (2) in the first sentence, by striking ``liquidation'' and 
     inserting ``liquidation, termination, or acceleration''.
       (j) Liquidation, Termination, or Acceleration of Swap 
     Agreements.--Section 560 of title 11, United States Code, is 
     amended--
       (1) by amending the section heading to read as follows:

     ``Sec. 560. Contractual right to liquidate, terminate, or 
       accelerate a swap agreement''; and

       (2) in the first sentence, by striking ``termination of a 
     swap agreement'' and inserting ``liquidation, termination, or 
     acceleration of a swap agreement''; and
       (3) by striking ``in connection with any swap agreement'' 
     and inserting ``in connection with the termination, 
     liquidation, or acceleration of a swap agreement''.

[[Page H9982]]

       (k) Liquidation, Termination, Acceleration, or Offset Under 
     a Master Netting Agreement and Across Contracts.--Title 11, 
     United States Code, is amended by inserting after section 560 
     the following new section:

     ``Sec. 561. Contractual right to terminate, liquidate, 
       accelerate, or offset under a master netting agreement and 
       across contracts

       ``(a) In General.--Subject to subsection (b), the exercise 
     of any contractual right, because of a condition of the kind 
     specified in section 365(e)(1), to cause the termination, 
     liquidation, or acceleration of or to offset or net 
     termination values, payment amounts or other transfer 
     obligations arising under or in connection with 1 or more (or 
     the termination, liquidation, or acceleration of 1 or more--
       ``(1) securities contracts, as defined in section 741(7);
       ``(2) commodity contracts, as defined in section 761(4);
       ``(3) forward contracts;
       ``(4) repurchase agreements;
       ``(5) swap agreements; or
       ``(6) master netting agreements,
     shall not be stayed, avoided, or otherwise limited by 
     operation of any provision of this title or by any order of a 
     court or administrative agency in any proceeding under this 
     title.
       ``(b) Exception.--
       ``(1) A party may exercise a contractual right described in 
     subsection (a) to terminate, liquidate, or accelerate only to 
     the extent that such party could exercise such a right under 
     section 555, 556, 559, or 560 for each individual contract 
     covered by the master netting agreement in issue.
       ``(2) If a debtor is a commodity broker subject to 
     subchapter IV of chapter 7 of this title--
       ``(A) a party may not net or offset an obligation to the 
     debtor arising under, or in connection with, a commodity 
     contract against any claim arising under, or in connection 
     with, other instruments, contracts, or agreements listed in 
     subsection (a) except to the extent the party has no positive 
     net equity in the commodity accounts at the debtor, as 
     calculated under subchapter IV;
       ``(B) another commodity broker may not net or offset an 
     obligation to the debtor arising under, or in connection 
     with, a commodity contract entered into or held on behalf of 
     a customer of the debtor against any claim arising under, or 
     in connection with, other instruments, contracts, or 
     agreements listed in subsection (a).
       ``(c) Definition.--As used in this section, the term 
     `contractual right' includes a right set forth in a rule or 
     bylaw of a national securities exchange, a national 
     securities association, or a securities clearing agency, a 
     right set forth in a bylaw of a clearing organization or 
     contract market or in a resolution of the governing board 
     thereof, and a right, whether or not evidenced in writing, 
     arising under common law, under law merchant, or by reason of 
     normal business practice.''.
       (l) Municipal Bankruptcies.--Section 901 of title 11, 
     United States Code, is amended--
       (1) by inserting ``, 555, 556'' after ``553''; and
       (2) by inserting ``, 559, 560, 561,'' after ``557''.
       (m) Ancillary Proceedings.--Section 304 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(d) Any provisions of this title relating to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, or master netting agreements 
     shall apply in a case ancillary to a foreign proceeding under 
     this section or any other section of this title, so that 
     enforcement of contractual provisions of such contracts and 
     agreements in accordance with their terms will not be stayed 
     or otherwise limited by operation of any provision of this 
     title or by order of a court in any case under this title, 
     and to limit avoidance powers to the same extent as in a 
     proceeding under chapter 7 or 11 of this title (such 
     enforcement not to be limited based on the presence or 
     absence of assets of the debtor in the United States).''.
       (n) Commodity Broker Liquidations.--Title 11, United States 
     Code, is amended by inserting after section 766 the 
     following:

     ``Sec. 767. Commodity broker liquidation and forward contract 
       merchants, commodity brokers, stockbrokers, financial 
       institutions, securities clearing agencies, swap 
       participants, repo participants, and master netting 
       agreement participants

       ``Notwithstanding any other provision of this title, the 
     exercise of rights by a forward contract merchant, commodity 
     broker, stockbroker, financial institution, securities 
     clearing agency, swap participant, repo participant, or 
     master netting agreement participant under this title shall 
     not affect the priority of any unsecured claim it may have 
     after the exercise of such rights.''.
       (o) Stockbroker Liquidations.--Title 11, United States 
     Code, is amended by inserting after section 752 the 
     following:

     ``Sec. 753. Stockbroker liquidation and forward contract 
       merchants, commodity brokers, stockbrokers, financial 
       institutions, securities clearing agencies, swap 
       participants, repo participants, and master netting 
       agreement participants

       ``Notwithstanding any other provision of this title, the 
     exercise of rights by a forward contract merchant, commodity 
     broker, stockbroker, financial institution, securities 
     clearing agency, swap participant, repo participant, 
     financial participant, or master netting agreement 
     participant under this title shall not affect the priority of 
     any unsecured claim it may have after the exercise of such 
     rights.''.
       (p) Setoff.--Section 553 of title 11, United States Code, 
     is amended--
       (1) in subsection (a)(3)(C), by inserting ``(except for a 
     setoff of a kind described in section 362(b)(6), 362(b)(7), 
     362(b)(17), 362(b)(19), 555, 556, 559, or 560 of this 
     title)'' before the period; and
       (2) in subsection (b)(1), by striking ``362(b)(14),'' and 
     inserting ``362(b)(17), 362(b)(19), 555, 556, 559, 560,''.
       (q) Securities Contracts, Commodity Contracts, and Forward 
     Contracts.--Title 11, United States Code, is amended--
       (1) in section 362(b)(6), by striking ``financial 
     institutions,'' each place such term appears and inserting 
     ``financial institution, financial participant'';
       (2) in section 546(e), by inserting ``financial 
     participant'' after ``financial institution,'';
       (3) in section 548(d)(2)(B), by inserting ``financial 
     participant'' after ``financial institution,'';
       (4) in section 555--
       (A) by inserting ``financial participant'' after 
     ``financial institution,''; and
       (B) by inserting before the period ``, a right set forth in 
     a bylaw of a clearing organization or contract market or in a 
     resolution of the governing board thereof, and a right, 
     whether or not in writing, arising under common law, under 
     law merchant, or by reason of normal business practice''; and
       (5) in section 556, by inserting ``, financial 
     participant'' after ``commodity broker''.
       (r) Conforming Amendments.--Title 11 of the United States 
     Code is amended--
       (1) in the table of sections of chapter 5--
       (A) by amending the items relating to sections 555 and 556 
     to read as follows:

``555. Contractual right to liquidate, terminate, or accelerate a 
              securities contract.
``556. Contractual right to liquidate, terminate, or accelerate a 
              commodities contract or forward contract.''; and

       (B) by amending the items relating to sections 555 and 556 
     to read as follows:

``559. Contractual right to liquidate, terminate, or accelerate a 
              repurchase agreement.
``560. Contractual right to liquidate, terminate, or accelerate a swap 
              agreement.''; and

       (2) in the table of sections of chapter 7--
       (A) by inserting after the item relating to section 766 the 
     following:

``767. Commodity broker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              securities clearing agencies, swap participants, repo 
              participants, and master netting agreement 
              participants.''; and

       (B) by inserting after the item relating to section 752 the 
     following:

``753. Stockbroker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              securities clearing agencies, swap participants, repo 
              participants, and master netting agreement 
              participants.''.

     SEC. 1008. RECORDKEEPING REQUIREMENTS.

       Section 11(e)(8) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)) is amended by adding at the end the 
     following new subparagraph:
       ``(H) Recordkeeping requirements.--The Corporation, in 
     consultation with the appropriate Federal banking agencies, 
     may prescribe regulations requiring more detailed 
     recordkeeping with respect to qualified financial contracts 
     (including market valuations) by insured depository 
     institutions.''.

     SEC. 1009. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION ---
                   REQUIREMENT.

       Section 13(e)(2) of the Federal Deposit Insurance Act (12 
     U.S.C. 1823(e)(2)) is amended to read as follows:
       ``(2) Exemptions from contemporaneous execution 
     requirement.--An agreement to provide for the lawful 
     collateralization of--
       ``(A) deposits of, or other credit extension by, a Federal, 
     State, or local governmental entity, or of any depositor 
     referred to in section 11(a)(2), including an agreement to 
     provide collateral in lieu of a surety bond;
       ``(B) bankruptcy estate funds pursuant to section 345(b)(2) 
     of title 11, United States Code;
       ``(C) extensions of credit, including any overdraft, from a 
     Federal reserve bank or Federal home loan bank; or
       ``(D) 1 or more qualified financial contracts, as defined 
     in section 11(e)(8)(D),

     shall not be deemed invalid pursuant to paragraph (1)(B) 
     solely because such agreement was not executed 
     contemporaneously with the acquisition of the collateral or 
     because of pledges, delivery, or substitution of the 
     collateral made in accordance with such agreement.''.

     SEC. 1010. DAMAGE MEASURE.

       (a) Title 11, United States Code, is amended--
       (1) by inserting after section 561 the following:

     ``Sec. 562. Damage measure in connection with swap 
       agreements, securities contracts, forward contracts, 
       commodity contracts, repurchase agreements, or master 
       netting agreements

       ``If the trustee rejects a swap agreement, securities 
     contract as defined in section 741 of this title, forward 
     contract, commodity contract (as defined in section 761 of 
     this title) repurchase agreement, or master netting agreement 
     pursuant to section 365(a) of this title, or if a forward 
     contract merchant, stockbroker, financial institution, 
     securities clearing agency, repo participant, financial 
     participant, master netting agreement participant, or swap 
     participant liquidates, terminates, or accelerates such 
     contract or agreement, damages shall be measured as of the 
     earlier of--
       ``(1) the date of such rejection; or
       ``(2) the date of such liquidation, termination, or 
     acceleration.''; and

[[Page H9983]]

       (2) in the table of sections of chapter 5 by inserting 
     after the item relating to section 561 the following:

``562. Damage measure in connection with swap agreements, securities 
              contracts, forward contracts, commodity contracts, 
              repurchase agreements, or master netting agreements.''.
       (b) Claims Arising From Rejection.--Section 502(g) of title 
     11, United States Code, is amended--
       (1) by designating the existing text as paragraph (1); and
       (2) by adding at the end the following:
       ``(2) A claim for damages calculated in accordance with 
     section 561 of this title shall be allowed under subsection 
     (a), (b), or (c), or disallowed under subsection (d) or (e), 
     as if such claim had arisen before the date of the filing of 
     the petition.''.

     SEC. 1011. SIPC STAY.

       Section 5(b)(2) of the Securities Investor Protection Act 
     of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding after 
     subparagraph (B) the following new subparagraph:
       ``(C) Exception from stay.--
       ``(i) Notwithstanding section 362 of title 11, United 
     States Code, neither the filing of an application under 
     subsection (a)(3) nor any order or decree obtained by 
     Securities Investor Protection Corporation from the court 
     shall operate as a stay of any contractual rights of a 
     creditor to liquidate, terminate, or accelerate a securities 
     contract, commodity contract, forward contract, repurchase 
     agreement, swap agreement, or master netting agreement, each 
     as defined in title 11, to offset or net termination values, 
     payment amounts, or other transfer obligations arising under 
     or in connection with 1 or more of such contracts or 
     agreements, or to foreclose on any cash collateral pledged by 
     the debtor whether or not with respect to 1 or more of such 
     contracts or agreements.
       ``(ii) Notwithstanding clause (i), such application, order, 
     or decree may operate as a stay of the foreclosure on 
     securities collateral pledged by the debtor, whether or not 
     with respect to 1 or more of such contracts or agreements, 
     securities sold by the debtor under a repurchase agreement or 
     securities lent under a securities lending agreement.
       ``(iii) As used in this section, the term `contractual 
     right' includes a right set forth in a rule or bylaw of a 
     national securities exchange, a national securities 
     association, or a securities clearing agency, a right set 
     forth in a bylaw of a clearing organization or contract 
     market or in a resolution of the governing board thereof, and 
     a right, whether or not in writing, arising under common law, 
     under law merchant, or by reason of normal business 
     practice.''.

     SEC. 1012. ASSET-BACKED SECURITIZATIONS.

       Section 541 of title 11, United States Code, is amended--
       (1) in subsection (b), by striking ``or'' at the end of 
     paragraph (4);
       (2) by redesignating paragraph (5) of subsection (b) as 
     paragraph (6);
       (3) by inserting after paragraph (4) of subsection (b) the 
     following new paragraph:
       ``(5) any eligible asset (or proceeds thereof), to the 
     extent that such eligible asset was transferred by the 
     debtor, before the date of commencement of the case, to an 
     eligible entity in connection with an asset-backed 
     securitization, except to the extent such asset (or proceeds 
     or value thereof) may be recovered by the trustee under 
     section 550 by virtue of avoidance under section 548(a); 
     or''; and
       (4) by adding at the end the following new subsection:
       ``(e) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Asset-backed securitization.--The term `asset-backed 
     securitization' means a transaction in which eligible assets 
     transferred to an eligible entity are used as the source of 
     payment on securities, the most senior of which are rated 
     investment grade by 1 or more nationally recognized 
     securities rating organizations, issued by an issuer;
       ``(2) Eligible asset.--The term `eligible asset' means--
       ``(A) financial assets (including interests therein and 
     proceeds thereof), either fixed or revolving, including 
     residential and commercial mortgage loans, consumer 
     receivables, trade receivables, and lease receivables, that, 
     by their terms, convert into cash within a finite time 
     period, plus any rights or other assets designed to assure 
     the servicing or timely distribution of proceeds to security 
     holders;
       ``(B) cash; and
       ``(C) securities.
       ``(3) Eligible entity.--The term `eligible entity' means--
       ``(A) an issuer; or
       ``(B) a trust, corporation, partnership, or other entity 
     engaged exclusively in the business of acquiring and 
     transferring eligible assets directly or indirectly to an 
     issuer and taking actions ancillary thereto;
       ``(4) Issuer.--The term `issuer' means a trust, 
     corporation, partnership, or other entity engaged exclusively 
     in the business of acquiring and holding eligible assets, 
     issuing securities backed by eligible assets, and taking 
     actions ancillary thereto.
       ``(5) Transferred.--The term `transferred' means the 
     debtor, pursuant to a written agreement, represented and 
     warranted that eligible assets were sold, contributed, or 
     otherwise conveyed with the intention of removing them from 
     the estate of the debtor pursuant to subsection (b)(5), 
     irrespective, without limitation of--
       ``(A) whether the debtor directly or indirectly obtained or 
     held an interest in the issuer or in any securities issued by 
     the issuer;
       ``(B) whether the debtor had an obligation to repurchase or 
     to service or supervise the servicing of all or any portion 
     of such eligible assets; or
       ``(C) the characterization of such sale, contribution, or 
     other conveyance for tax, accounting, regulatory reporting, 
     or other purposes.''.

     SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIREMENTS.

       The 2d sentence of the 2d undesignated paragraph of section 
     16 of the Federal Reserve Act (12 U.S.C. 412) is amended by 
     striking ``acceptances acquired under section 13 of this 
     Act'' and inserting ``acceptances acquired under section 10A, 
     10B, 13, or 13A of this Act''.

     SEC. 1014. SEVERABILITY; EFFECTIVE DATE; APPLICATION OF 
                   AMENDMENTS.

       (a) Severability.--If any provision of this Act or any 
     amendment made by this Act, or the application of any such 
     provision or amendment to any person or circumstance, is held 
     to be unconstitutional, the remaining provisions of and 
     amendments made by this Act and the application of such other 
     provisions and amendments to any person or circumstance shall 
     not be affected thereby.
       (b) Effective Date.--This Act shall take effect on the date 
     of the enactment of this Act.
       (c) Application of Amendments.--The amendments made by this 
     Act shall apply with respect to cases commenced or 
     appointments made under any Federal or State law after the 
     date of enactment of this Act, but shall not apply with 
     respect to cases commenced or appointments made under any 
     Federal or State law before the date of enactment of this 
     Act.

                    TITLE XI--TECHNICAL CORRECTIONS

     SEC. 1101. DEFINITIONS.

       Section 101 of title 11, United States Code, as amended by 
     section 317, is amended--
       (1) by striking ``In this title--'' and inserting ``In this 
     title:'';
       (2) in each paragraph, by inserting ``The term'' after the 
     paragraph designation;
       (3) in paragraph (35)(B), by striking ``paragraphs (21B) 
     and (33)(A)'' and inserting ``paragraphs (23) and (35)'';
       (4) in each of paragraphs (35A) and (38), by striking ``; 
     and'' at the end and inserting a period;
       (5) in paragraph (51B)--
       (A) by inserting ``who is not a family farmer'' after 
     ``debtor'' the first place it appears; and
       (B) by striking ``thereto having aggregate'' and all that 
     follows through the end of the paragraph;
       (6) by amending paragraph (54) to read as follows:
       ``(54) The term `transfer' means--
       ``(A) the creation of a lien;
       ``(B) the retention of title as a security interest;
       ``(C) the foreclosure of a debtor's equity of redemption; 
     or
       ``(D) each mode, direct or indirect, absolute or 
     conditional, voluntary or involuntary, of disposing of or 
     parting with--
       ``(i) property; or
       ``(ii) an interest in property;'';
       (7) in each of paragraphs (1) through (35), in each of 
     paragraphs (36) and (37), and in each of paragraphs (40) 
     through (55) (including paragraph (54), as amended by 
     paragraph (6) of this section), by striking the semicolon at 
     the end and inserting a period; and
       (8) by redesignating paragraphs (4) through (55), including 
     paragraph (54), as amended by paragraph (6) of this section, 
     in entirely numerical sequence.

     SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.

       Section 104 of title 11, United States Code, is amended by 
     inserting ``522(f)(3), 707(b)(5),'' after ``522(d),'' each 
     place it appears.

     SEC. 1103. EXTENSION OF TIME.

       Section 108(c)(2) of title 11, United States Code, is 
     amended by striking ``922'' and all that follows through 
     ``or'', and inserting ``922, 1201, or''.

     SEC. 1104. TECHNICAL AMENDMENTS.

       Title 11 of the United States Code is amended--
       (1) in section 109(b)(2) by striking ``subsection (c) or 
     (d) of'';
       (2) in section 541(b)(4) by adding ``or'' at the end; and
       (3) in section 552(b)(1) by striking ``product'' each place 
     it appears and inserting ``products''.

     SEC. 1105. PENALTY FOR PERSONS WHO NEGLIGENTLY OR 
                   FRAUDULENTLY PREPARE BANKRUPTCY PETITIONS.

       Section 110(j)(3) of title 11, United States Code, is 
     amended by striking ``attorney's'' and inserting ``attorneys' 
     ''.

     SEC. 1106. LIMITATION ON COMPENSATION OF PROFESSIONAL 
                   PERSONS.

       Section 328(a) of title 11, United States Code, is amended 
     by inserting ``on a fixed or percentage fee basis,'' after 
     ``hourly basis,''.

     SEC. 1107. SPECIAL TAX PROVISIONS.

       Section 346(g)(1)(C) of title 11, United States Code, is 
     amended by striking ``, except'' and all that follows through 
     ``1986''.

     SEC. 1108. EFFECT OF CONVERSION.

       Section 348(f)(2) of title 11, United States Code, is 
     amended by inserting ``of the estate'' after ``property'' the 
     first place it appears.

     SEC. 1109. AMENDMENT TO TABLE OF SECTIONS.

       The table of sections for chapter 5 of title 11, United 
     States Code, is amended by striking the item relating to 
     section 556 and inserting the following:

``556. Contractual right to liquidate a commodities contract or forward 
              contract.''.

     SEC. 1110. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

       Section 503(b)(4) of title 11, United States Code, is 
     amended by inserting ``subparagraph (A), (B), (C), (D), or 
     (E) of'' before ``paragraph (3)''.

     SEC. 1111. PRIORITIES.

       Section 507(a) of title 11, United States Code, as amended 
     by section 323, is amended--

[[Page H9984]]

       (1) in paragraph (3)(B), by striking the semicolon at the 
     end and inserting a period; and
       (2) in paragraph (7), by inserting ``unsecured'' after 
     ``allowed''.

     SEC. 1112. EXEMPTIONS.

       Section 522 of title 11, United States Code, as amended by 
     section 320, is amended--
       (1) in subsection (f)(1)(A)(ii)(II)--
       (A) by striking ``includes a liability designated as'' and 
     inserting ``is for a liability that is designated as, and is 
     actually in the nature of,''; and
       (B) by striking ``, unless'' and all that follows through 
     ``support''; and
       (2) in subsection (g)(2), by striking ``subsection (f)(2)'' 
     and inserting ``subsection (f)(1)(B)''.

     SEC. 1113. EXCEPTIONS TO DISCHARGE.

       Section 523 of title 11, United States Code, is amended--
       (1) in subsection (a)(3), by striking ``or (6)'' each place 
     it appears and inserting ``(6), or (15)'';
       (2) as amended by section 304(e) of Public Law 103-394 (108 
     Stat. 4133), in paragraph (15), by transferring such 
     paragraph so as to insert it after paragraph (14) of 
     subsection (a);
       (3) in subsection (a)(9), by inserting ``, watercraft, or 
     aircraft'' after ``motor vehicle'';
       (4) in subsection (a)(15), as so redesignated by paragraph 
     (2) of this subsection, by inserting ``to a spouse, former 
     spouse, or child of the debtor and'' after ``(15)'';
       (5) in subsection (a)(17)--
       (A) by striking ``by a court'' and inserting ``on a 
     prisoner by any court'';
       (B) by striking ``section 1915 (b) or (f)'' and inserting 
     ``subsection (b) or (f)(2) of section 1915''; and
       (C) by inserting ``(or a similar non-Federal law)'' after 
     ``title 28'' each place it appears; and
       (6) in subsection (e), by striking ``a insured'' and 
     inserting ``an insured''.

     SEC. 1114. EFFECT OF DISCHARGE.

       Section 524(a)(3) of title 11, United States Code, is 
     amended by striking ``section 523'' and all that follows 
     through ``or that'' and inserting ``section 523, 1228(a)(1), 
     or 1328(a)(1) of this title, or that''.

     SEC. 1115. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

       Section 525(c) of title 11, United States Code, is 
     amended--
       (1) in paragraph (1), by inserting ``student'' before 
     ``grant'' the second place it appears; and
       (2) in paragraph (2), by striking ``the program operated 
     under part B, D, or E of'' and inserting ``any program 
     operated under''.

     SEC. 1116. PROPERTY OF THE ESTATE.

       Section 541(b)(4)(B)(ii) of title 11, United States Code, 
     is amended by inserting ``365 or'' before ``542''.

     SEC. 1117. PREFERENCES.

       Section 547 of title 11, United States Code, is amended--
       (1) in subsection (b), by striking ``subsection (c)'' and 
     inserting ``subsections (c) and (h)''; and
       (2) by adding at the end the following:
       ``(h) If the trustee avoids under subsection (b) a security 
     interest given between 90 days and 1 year before the date of 
     the filing of the petition, by the debtor to an entity that 
     is not an insider for the benefit of a creditor that is an 
     insider, such security interest shall be considered to be 
     avoided under this section only with respect to the creditor 
     that is an insider.''.

     SEC. 1118. POSTPETITION TRANSACTIONS.

       Section 549(c) of title 11, United States Code, is 
     amended--
       (1) by inserting ``an interest in'' after ``transfer of'';
       (2) by striking ``such property'' and inserting ``such real 
     property''; and
       (3) by striking ``the interest'' and inserting ``such 
     interest''.

     SEC. 1119. DISPOSITION OF PROPERTY OF THE ESTATE.

       Section 726(b) of title 11, United States Code, is amended 
     by striking ``1009,''.

     SEC. 1120. GENERAL PROVISIONS.

       Section 901(a) of title 11, United States Code, as amended 
     by section 408, is amended by inserting ``1123(d),'' after 
     ``1123(b),''.

     SEC. 1121. APPOINTMENT OF ELECTED TRUSTEE.

       Section 1104(b) of title 11, United States Code, is 
     amended--
       (1) by inserting ``(1)'' after ``(b)''; and
       (2) by adding at the end the following:
       ``(2)(A) If an eligible, disinterested trustee is elected 
     at a meeting of creditors under paragraph (1), the United 
     States trustee shall file a report certifying that election. 
     Upon the filing of a report under the preceding sentence--
       ``(i) the trustee elected under paragraph (1) shall be 
     considered to have been selected and appointed for purposes 
     of this section; and
       ``(ii) the service of any trustee appointed under 
     subsection (d) shall terminate.
       ``(B) In the case of any dispute arising out of an election 
     under subparagraph (A), the court shall resolve the 
     dispute.''.

     SEC. 1122. ABANDONMENT OF RAILROAD LINE.

       Section 1170(e)(1) of title 11, United States Code, is 
     amended by striking ``section 11347'' and inserting ``section 
     11326(a)''.

     SEC. 1123. CONTENTS OF PLAN.

       Section 1172(c)(1) of title 11, United States Code, is 
     amended by striking ``section 11347'' and inserting ``section 
     11326(a)''.

     SEC. 1124. DISCHARGE UNDER CHAPTER 12.

       Subsections (a) and (c) of section 1228 of title 11, United 
     States Code, are amended by striking ``1222(b)(10)'' each 
     place it appears and inserting ``1222(b)(9)''.

     SEC. 1125. BANKRUPTCY CASES AND PROCEEDINGS.

       Section 1334(d) of title 28, United States Code, is 
     amended--
       (1) by striking ``made under this subsection'' and 
     inserting ``made under subsection (c)''; and
       (2) by striking ``This subsection'' and inserting 
     ``Subsection (c) and this subsection''.

     SEC. 1126. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.

       Section 156(a) of title 18, United States Code, is 
     amended--
       (1) in the first undesignated paragraph--
       (A) by inserting ``(1) the term'' before `` `bankruptcy''; 
     and
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (2) in the second undesignated paragraph--
       (A) by inserting ``(2) the term'' before `` `document''; 
     and
       (B) by striking ``this title'' and inserting ``title 11''.

     SEC. 1127. TRANSFERS MADE BY NONPROFIT CHARITABLE 
                   CORPORATIONS.

       (a) Sale of Property of Estate.--Section 363(d) of title 
     11, United States Code, is amended--
       (1) by striking ``only'' and all that follows through the 
     end of the subsection and inserting ``only--
       ``(1) in accordance with applicable nonbankruptcy law that 
     governs the transfer of property by a corporation or trust 
     that is not a moneyed, business, or commercial corporation or 
     trust; and
       ``(2) to the extent not inconsistent with any relief 
     granted under subsection (c), (d), (e), or (f) of section 362 
     of this title.''.
       (b) Confirmation of Plan for Reorganization.--Section 
     1129(a) of title 11, United States Code, as amended by 
     section 143, is amended by adding at the end the following:
       ``(15) All transfers of property of the plan shall be made 
     in accordance with any applicable provisions of nonbankruptcy 
     law that govern the transfer of property by a corporation or 
     trust that is not a moneyed, business, or commercial 
     corporation or trust.''.
       (c) Transfer of Property.--Section 541 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(e) Notwithstanding any other provision of this title, 
     property that is held by a debtor that is a corporation 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986 and exempt from tax under section 501(a) of such Code 
     may be transferred to an entity that is not such a 
     corporation, but only under the same conditions as would 
     apply if the debtor had not filed a case under this title.''.
       (d) Applicability.--The amendments made by this section 
     shall apply to a case pending under title 11, United States 
     Code, on the date of enactment of this Act, except that the 
     court shall not confirm a plan under chapter 11 of this title 
     without considering whether this section would substantially 
     affect the rights of a party in interest who first acquired 
     rights with respect to the debtor after the date of the 
     petition. The parties who may appear and be heard in a 
     proceeding under this section include the attorney general of 
     the State in which the debtor is incorporated, was formed, or 
     does business.
       (e) Rule of Construction.--Nothing in this section shall be 
     deemed to require the court in which a case under chapter 11 
     is pending to remand or refer any proceeding, issue, or 
     controversy to any other court or to require the approval of 
     any other court for the transfer of property.

     SEC. 1128. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO 
                   INCUR FINANCE CHARGES.

       Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is 
     amended by adding at the end the following:
       ``(h) Prohibition on Certain Actions for Failure To Incur 
     Finance Charges.--A creditor of an account under an open end 
     consumer credit plan may not terminate an account prior to 
     its expiration date solely because the consumer has not 
     incurred finance charges on the account. Nothing in this 
     subsection shall prohibit a creditor from terminating an 
     account for inactivity in 3 or more consecutive months.''.

     SEC. 1129. PROTECTION OF VALID PURCHASE MONEY SECURITY 
                   INTERESTS.

       Section 547(c)(3)(B) of title 11, united states code, is 
     amended by striking ``20'' and inserting ``30''.

     SEC. 1130. TRUSTEES.

       (a) Suspension and Termination of Panel Trustees and 
     Standing Trustees.--Section 586(d) of title 28, United States 
     Code, is amended--
       (1) by inserting ``(1)'' after ``(d)''; and
       (2) by adding at the end the following:
       ``(2) A trustee whose appointment under subsection (a)(1) 
     or under subsection (b) is terminated or who ceases to be 
     assigned to cases filed under title 11 of the United States 
     Code may obtain judicial review of the final agency decision 
     by commencing an action in the United States district court 
     for the district for which the panel to which the trustee is 
     appointed under subsection (a)(1), or in the United States 
     district court for the district in which the trustee is 
     appointed under subsection (b) resides, after first 
     exhausting all available administrative remedies, which if 
     the trustee so elects, shall also include an administrative 
     hearing on the record. Unless the trustee elects to have an 
     administrative hearing on the record, the trustee shall be 
     deemed to have exhausted all administrative remedies for 
     purposes of this paragraph if the agency fails to make a 
     final agency decision within 90 days after the trustee 
     requests administrative remedies. The Attorney General shall 
     prescribe procedures to implement this paragraph. The 
     decision of the agency shall be affirmed by the district 
     court unless it is unreasonable and without cause based on 
     the administrative record before the agency.''.
       (b) Expenses of Standing Trustees.--Section 586(e) of title 
     28, United States Code, is amended by adding at the end the 
     following:

[[Page H9985]]

       ``(3) After first exhausting all available administrative 
     remedies, an individual appointed under subsection (b) may 
     obtain judicial review of final agency action to deny a claim 
     of actual, necessary expenses under this subsection by 
     commencing an action in the United States district court in 
     the district where the individual resides. The decision of 
     the agency shall be affirmed by the district court unless it 
     is unreasonable or without cause based upon the 
     administrative record before the agency.
       ``(4) The Attorney General shall prescribe procedures to 
     implement this subsection.''.

      TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

     SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as provided otherwise in this 
     Act, this Act and the amendments made by this Act shall take 
     effect 180 days after the date of the enactment of this Act.
       (b) Application of Amendments.--The amendments made by this 
     Act shall not apply with respect to cases commenced under 
     title 11 of the United States Code before the effective date 
     of this Act.
       And the Senate agree to the same.
     From the Committee on the Judiciary, for consideration of the 
     House bill and the Senate amendment, and modifications 
     committed to conference:
     Henry Hyde,
     Bill McCollum,
     George W. Gekas,
     Bob Goodlatte,
     Ed Bryant,
     Steve Chabot,
     Rick Boucher,
                                Managers on the Part of the House.

     Orrin G. Hatch,
     Chuck Grassley,
     Jeff Sessions,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     Conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to the bill (H.R. 3150), to amend 
     title 11 of the United States Code, and for other purposes, 
     submit the following joint statement to the House and Senate 
     in explanation of the effect of the action agreed upon by the 
     managers and recommended in the accompanying conference 
     report:
       Differences between the House and Senate bills on several 
     primary issues were the focus of discussions at the 
     Conference.


                             means testing

       The House version contained a pre-filing formula to steer 
     debtors with repayment capacity into Chapter 13 repayment 
     plans. The Senate bill directed bankruptcy judges to consider 
     the repayment capacity of debtors who had filed in Chapter 7 
     bankruptcy to determine whether they were appropriately 
     filed. The compromise combines the best aspects of both 
     approaches. It adopts the procedural approach of the Senate 
     bill directing bankruptcy judges to consider repayment 
     capacity, while instructing that such repayment capacity 
     shall be presumed by the judge if the individual meets 
     certain bright-line standards for measuring such repayment 
     capacity. This approach preserves the right of a debtor in 
     bankruptcy to have a judge review his or her individual case 
     so that the debtor's unique circumstances could be taken into 
     account.


                          non-dischargeability

       The House bill contained a provision that any debts 
     incurred within 90 days of declaring bankruptcy, other than 
     reasonably necessary living expenses not exceeding $250, were 
     presumed to be nondischargeable. The House bill capped 
     necessary living expenses at $250. The Senate bill contained 
     a provision that debts other than reasonably necessary living 
     expenses incurred within 90 days of declaring bankruptcy were 
     presumed non-dischargeable. The Senate bill exempted all 
     expenses, whether reasonable or not, up to $400. The 
     Conferees reached a compromise between these provisions that 
     new debts incurred within 90 days of bankruptcy for luxury 
     goods over $250 in value would be presumed non-dischargeable. 
     The compromise provides no limitation for reasonably 
     necessary living expenses.
       In addition, the House bill contained a provision that any 
     debt incurred to pay non-dischargeable debt is also non-
     dischargeable. Under the Senate bill, debts incurred to pay 
     non-dischargeable debts were only non-dischargeable if the 
     debtor intended to discharge the newly created debt in 
     bankruptcy. Under the Committee compromise, only debts 
     incurred within 90 days prior to filing for bankruptcy to pay 
     non-dischargeable debts are non-dischargeable, however, debts 
     incurred prior to 90 days prior to filing for bankruptcy to 
     pay nondischargeable debts are nondischargeable only if the 
     debtor intended to discharge the newly created debt in 
     bankruptcy.


              ENHANCED DISCLOSURES AND CREDITOR PENALTIES

       The House bill contained disclosure requirements for debtor 
     lawyers who advertise debt relief services to ensure that 
     unwary consumers were not lured into bankruptcy without being 
     fully aware of their alternatives. The Senate bill contained 
     provisions which required certain lenders to make 
     disclosures, regarding minimum monthly payments, total costs, 
     among others. The House bill contained no such provisions on 
     enhanced consumer disclosures for credit extensions. The 
     Conferees agreed to retain the disclosure provisions for 
     debtor attorneys and to direct the Board of Governors of the 
     Federal Reserve to develop appropriate and meaningful 
     additional disclosure requirements for the use of consumers. 
     In addition, several of the Senate bill provisions which 
     assessed stiff fines on creditors who used abusive collection 
     techniques, were adopted in the final Conference Report. The 
     Conference Report also specifies that the new penalties will 
     not give rise to class action liability.


                             REAFFIRMATIONS

       The House bill contained no comparable provision to the 
     Senate bill, which imposed a requirement for a hearing before 
     a judge for certain types of reaffirmations by debtors. The 
     Conference Committee streamlined these judicial procedures by 
     ensuring that every debtor who reaffirms unsecured debt has 
     the opportunity to appear before a judge. Under the 
     compromise an enhanced standard is provided for the review of 
     certain reaffirmation agreements. The judge is now required 
     to determine that the reaffirmation was in the best interest 
     of the debtor, would not impose an undue hardship, and was 
     not the result of coercion.


                               CRAMDOWNS

       The House bill prohibited cramdowns for certain secured 
     debts incurred within 180 days prior to bankruptcy. The 
     Senate bill contained an absolute prohibition on cramdowns in 
     Chapter 13 cases. The Committee compromised by prohibiting 
     cramdowns on debts securing personal property incurred within 
     five years of filing for bankruptcy.


                          HOMESTEAD EXEMPTION

       The House version of the homestead exemption required a 
     one-year residency prior to being able to claim the homestead 
     exemption. The Senate versions capped all homestead 
     exemptions at $100,000. The Committee compromise imposes a 
     two-year residency requirement before a debtor can claim the 
     homestead exemption available in a particular state.
       Other differences between the bills that were resolved by 
     the Committee of Conference are apparent from a comparison of 
     the two bills.


                        CURBING ABUSIVE FILINGS

       The conferees have added a new paragraph to section 707(b) 
     to make clear that, among the considerations in applying the 
     ``totality of the circumstances'' test for ``abuse'' is 
     whether an individual debtor seeks to reject a personal 
     services contract and the financial need for such rejection 
     as sought by the debtor. This is intended to remedy problems 
     brought to the attention of Congress involving bankruptcy 
     filings that were motivated in material part in order to 
     reject executory contracts for personal services so that the 
     debtor could negotiate a new and better contract with a 
     different company. This problem was initially addressed in 
     Section 212 of H.R. 3150, and the solution contained in that 
     provision was targeted at this particular form of abuse of 
     the bankruptcy process. With the new standard for ``abuse'' 
     in Section 707(b)(2)(C), the conferees have determined that 
     the specific provisions of Section 212 are no longer 
     necessary, as the bankruptcy court will not have the 
     authority to identify and remedy such abuses. The conferees 
     intend that, under the ``totality of the circumstances'' 
     test, an ``abuse'' of Chapter 7 exists when rejection of the 
     personal services contract was a material reason for 
     commencing the bankruptcy case, and economic rehabilitation 
     of the debtor's finances can be achieved absent rejection of 
     the contract. The conferees also intend that application of 
     the existing judicially-determined ``bad faith'' standard now 
     be used in these circumstances in Chapter 7 cases and in 
     Chapter 11 and Chapter 13 cases, in which the debtor or 
     debtors are parties to a single personal services contract.

     From the Committee on the Judiciary, for consideration of the 
     House bill and the Senate amendment, and modifications 
     committed to conference:
     Henry Hyde,
     Bill McCollum,
     George W. Gekas,
     Bob Goodlatte,
     Ed Bryant,
     Steve Chabot,
     Rick Boucher,
                                Managers on the Part of the House.

     Orrin G. Hatch,
     Chuck Grassley,
     Jeff Sessions,
     Managers on the Part of the Senate.

                          ____________________