[Congressional Record Volume 145, Number 41 (Tuesday, March 16, 1999)]
[Senate]
[Pages S2737-S2777]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FORT PECK RESERVATION RURAL WATER SYSTEM ACT OF 1999
Mr. BAUCUS. Mr. President, I rise today with my colleague,
Senator Burns, to introduce the ``Fort Peck Reservation Rural Water
System Act of 1999.'' This bill, which is broadly supported, will
ensure the Assiniboine and Sioux people of the Fort Peck Reservation,
as well as the surrounding communities in my great state of Montana,
something that each and everyone one of us in this body take for
granted everyday--a safe and reliable water supply.
This legislation authorizes a municipal, rural and industrial water
system for the Fort Peck Reservation and the surrounding communities
off the Reservation who compose the Dry Prairie Water Association.
Using a small amount of water from the Missouri River, this project
will benefit the entire region of Northeast Montana. This legislation
has the support of the State of Montana, the residents of the Fort Peck
Reservation, the Tribal Council of the Assiniboine and Sioux Tribes,
and all of the towns and communities surrounding the Reservation.
I am proud to sponsor this legislation because it represents the
coming together of people who have traditionally been divided on many
issues. The need for water has surfaced a tremendous show of friendship
and trust in Northeast Montana. This project has given the Fort Peck
Assiniboine and Sioux Tribes and the off-Reservation public common
ground to work towards and provided the trust needed for rural
communities to grow and prosper. The need for water exists not only for
drinking, but also for agricultural, municipal, and industrial
purposes.
Together, the people in this region are plagued with major drinking
water problems. The Reservation and surrounding communities are clearly
in desperate need of a safe and good source of drinking water. In one
community, the sulfate levels in the water are four times the standard
for safe drinking water. In four of the communities, iron levels are
five times the standard. Sadly, some residents have been forced to
abandon their homes and their farms because their only source of water
has been polluted with brine from oil production.
In all of the communities throughout the Reservation, groundwater
exceeds the standards for total dissolved solids, iron, sulfates, and
nitrates. In some instances, more lethal minerals such as selenium,
manganese, and fluorine are found in high concentrations.
In the area north of Culbertson, nitrate levels are too high to
safely use ground water. Along the Eastern borders, from Froid to
Plentywood, the high manganese, iron and total dissolved solids, make
treating the water very expensive. In the Northeast, near Westby, there
is oil field contamination from seismographing and salt water injection
methods.
In the middle of the service area, near Flaxville, nitrates and
sulfates exceed safe drinking water standards also. Finally, in the
west, in the St. Marie area, ground water is so hard and in such short
supply that it is unusable. In addition, several local water
[[Page S2738]]
systems have had occurrences of biological contamination.
As a result of the poor water that exists here, the Indian Health
Service has issued several public health alerts. In most communities in
this region, residents are forced to buy bottled water at a cost of at
least $75 a month. Those who cannot afford to buy bottled water--of
whom there are many--must continue to use the existing water sources,
at great risk to their health. Yet, despite the above mentioned health
risks, an ideal source of safe water, the Missouri River, flows past
these people every day.
In addition to the need for safe drinking water, an adequate source
of water is needed to preserve and protect agricultural operations. As
you know Mr. President, Northeast Montana relies almost exclusively on
agriculture to survive. The changing agricultural industry has brought
high unemployment and low family income to this area. To compete in
these challenging times, most agriculture producers in rural America
are adding value to the products they grow. To add value however, you
must have processing facilities that allow you to manufacture a high
quality, finished product. The people of Northeast Montana do not have
the quality of water needed to support industry of this kind. The
region's ability to supply employment and compete in agriculture is
destroyed without essential infrastructure.
I have described a desperate and complex situation, Mr. President.
The solution however, is simple. We need to provide a water system that
will deliver a safe and good source of water to the residents of the
Region. Fortunately, most of the work has been done. By working
together on a local and state level, these groups have struck a deal
that provides an adequate source of water for all who need it, for this
generation of users and for future generations. By using a small amount
of water from the Missouri River, combined with the structure this bill
provides, residents of Northeast Montana will be able to enjoy the
same, safe water supply that you and I do.
I look forward to swift passage of this legislation.
______
By Mr. GRASSLEY (for himself, Mr. Torricelli, Mr. Biden, and Mr.
Sessions):
S. 625. A bill to amend title 11, United States Code, and for other
purposes; to the Committee on the Judiciary.
THE BANKRUPTCY REFORM ACT OF 1999
Mr. GRASSLEY. Mr. President, I rise today to introduce ``The
Bankruptcy Reform Act of 1999'' with Senators Torricelli and Biden.
This bill builds on the conference report which the Senate and House
produced at the end of the 105th Congress, which melded together good
legislation from both the Senate and the House to create a final
product that combined the best aspects of both bills.
The bill I'm introducing today makes important changes to the
conference report from last year to accommodate concerns raised by some
Senators.
The need for real bankruptcy reform is pretty obvious. You don't need
an army of so-called scientists, law professors and academics to tell
us that we have a serious bankruptcy problem.
These are good times in America. Thanks to the hard work of a
Republican Congress, we have the first balanced budget in a generation.
Unemployment is low, we have a solid stock market and most Americans
are optimistic about the future.
Despite the prosperity we are experiencing now, About one and a half
million Americans will declare bankruptcy this year if previous trends
continue. Since 1990, the rate of personal bankruptcy filings are up an
amazing 94.7 percent. That's almost a 100 percent increase in
bankruptcies since 1990.
Clearly something is amiss, and to paraphrase, ``it's not the economy
stupid.'' The problem with the explosion in bankruptcies lies
elsewhere. While many Americans who declare bankruptcy undoubtedly need
a fresh start, it defies common sense to think that all of the million
and a half Americans in bankruptcy court can't repay at least some of
their debts. The point of bankruptcy reform is to limit chapter 7--
which provides for a no-questions asked complete discharge of debts--to
people who don't have the ability to repay any of their debts. People
who can repay some or all of their debts should be required to do so in
a chapter 13 repayment plan.
An important aspect to remember about bankruptcies is that we all
have to pick up the tab for bankrupts who walk away from their debts.
Businesses have to raise prices on products and services to offset
bankruptcy losses. When you realize this, it becomes very apparent that
allowing unfettered access to chapter 7 bankruptcy for high income
people is a lot like a special interest tax loophole. Over 30 years
ago, Senator Albert Gore, Sr. recognized this in a speech on the Senate
floor. According to Senator Gore, like tax loopholes, chapter 7 allows
someone to get out of paying his fair share and to shift the cost to
hardworking Americans who play by the rules.
I think that Senator Gore had it exactly right. Bankruptcy reform is
all about closing loopholes so higher income can't get out of paying
their fair share.
As I indicated earlier, the bill I'm introducing now contains
significant modifications to accommodate the concerns raised by some
Senators. At the outset, I want to make it clear that, as was the case
with the original Senate bill from last Congress, under this bill, a
person in financial trouble can file in any chapter of the bankruptcy
code he or she chooses. And before a debtor can be transferred from
chapter 7 to chapter 13 or kicked out of bankruptcy, a judge will have
the chance to review the merits of each and every case. I want to
repeat this: Each and every chapter 7 debtor who meets the means-test
will receive an individual hearing to press his or her own unique case
before anything happens. In other words, this bill maintains much of
the judicial scrutiny and discretion that was the distinguishing factor
of the Senate bill's means-test in the 105th Congress. In the bill
Senator Torricelli and I are introducing today, there is more
flexibility given to the bankruptcy judge.
Under the Grassley-Torricelli bill, there are even greater consumer
protections than were in last year's conference report. For instance,
in order to protect consumers from deceptive and coercive collection
Practices, the Justice Department and the FBI are directed to appoint
one agent and one prosecutor to investigate abusive or deceptive
reaffirmation practices. Sears recently plead guilty in Massachusetts
to bankruptcy fraud in connection with its business practices in
seeking reaffirmations, and agreed to pay 60 million dollars in fines.
I think this shows that we already have tough laws on the books
regarding reaffirmations. What we need is better law enforcement, not
new laws. That's why we require the Justice Department and the FBI to
designate a person to investigate reaffirmation practices. Under the
Grassley-Torricelli bill, State attorney generals may enforce State
criminal statutes similar to those under which Sears was prosecuted,
and the State attorney generals are given the express authority to
enforce consumer protections already in the bankruptcy code. Taken
together, these provisions amount to a massive infusion of Federal and
State law enforcment resources for the purpose of protecting consumers
in bankruptcy court from abusive collection tactics.
The Grassley-Torricelli bill retains all the protections for child
support in last year's conference report, with important new additions.
Now, bankruptcy trustees would be required to notify State enforcment
agencies of a bankrupt's address and telephone number if the bankrupt
owes child support. This means that the bankruptcy court will now help
to track down dead-beat parents.
Also, the bill I'm introducing today also provides that debts
incurred prior to bankruptcy to pay off non-dischargeable debts will
still be dischargeable if the bankrupt owes child support. This means
that child support will never have to compete with this new category of
non-dischargeable debt after bankruptcy. Taken together, these
provisions will provide key new protections for child support
claimants.
Mr. President, in addition to the consumer provisions, the Grassley-
[[Page S2739]]
Torricelli bill also contains numerous changes to improve the
bankruptcy code for businesses. The bill makes numerous changes to the
treatment of tax claims in bankruptcy, and I expect that these
provision will be refined on the floor as the Finance Committee makes
some suggestions.
The bill also creates a new chapter 15 to address the growing problem
on transnational bankruptcies.
The bill contains provisions to make chapter 12 permanent and to
expand access to chapter 12.
The bill contains an entire title dedicated to expediting chapter 11
proceedings for small businesses.
One business-related provision I want to high-light relates to
protecting patients when hospitals and health-care businesses declare
bankruptcy. I chaired a hearing on this topic last year and I was
shocked to realize that the bankruptcy code doesn't require bankruptcy
trustees and creditor committees to consider the welfare of patients
when closing down or re-organizing a hospital or nursing home. So,
under the Grassley-Torricelli bill, whenever a hospital or nursing home
declares bankruptcy a patient ombudsman will be appointed to represent
the interests of patients during bankruptcy proceedings. And bankruptcy
trustees are required to safeguard the privacy of medical records when
closing a health care business. These provisions will provide
significant protections for patients in bankruptcy proceedings.
Mr. President, this bill contains many much-needed reforms. This bill
is fair, balanced and should receive strong bi-partisan support. I ask
unanimous consent to print the bill in the Record as there is much
public interest in bankruptcy reform and I want to get as much
information out as possible. I also ask unanimous consent to print in
the Record a summary of the major differences between this bill and the
conference report from last year.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 625
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bankruptcy
Reform Act of 1999''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--NEEDS-BASED BANKRUPTCY
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.
Sec. 105. Credit counseling.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Violations of the automatic stay.
Sec. 204. Discouraging abuse of reaffirmation practices.
Subtitle B--Priority Child Support
Sec. 211. Priorities for claims for domestic support obligations.
Sec. 212. Requirements to obtain confirmation and discharge in cases
involving domestic support obligations.
Sec. 213. Exceptions to automatic stay in domestic support obligation
proceedings.
Sec. 214. Nondischargeability of certain debts for alimony,
maintenance, and support.
Sec. 215. Continued liability of property.
Sec. 216. Protection of domestic support claims against preferential
transfer motions.
Sec. 217. Amendment to section 1325 of title 11, United States Code.
Sec. 218. Definition of domestic support obligation.
Sec. 219. Collection of child support.
Subtitle C--Other Consumer Protections
Sec. 221. Definitions.
Sec. 222. Disclosures.
Sec. 223. Debtor's bill of rights.
Sec. 224. Enforcement.
Sec. 225. Sense of Congress.
Sec. 226. Additional amendments to title 11, United States Code.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not
complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Exemptions.
Sec. 308. Residency requirement for homestead exemption.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide
required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the
plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of the Congress regarding expansion of rule 9011 of the
Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
Sec. 401. Rolling stock equipment.
Sec. 402. Adequate protection for investors.
Sec. 403. Meetings of creditors and equity security holders.
Sec. 404. Protection of refinance of security interest.
Sec. 405. Executory contracts and unexpired leases.
Sec. 406. Creditors and equity security holders committees.
Sec. 407. Amendment to section 546 of title 11, United States Code.
Sec. 408. Limitation.
Sec. 409. Amendment to section 330(a) of title 11, United States Code.
Sec. 410. Postpetition disclosure and solicitation.
Sec. 411. Preferences.
Sec. 412. Venue of certain proceedings.
Sec. 413. Period for filing plan under chapter 11.
Sec. 414. Fees arising from certain ownership interests.
Sec. 415. Creditor representation at first meeting of creditors.
Sec. 416. Elimination of certain fees payable in chapter 11 bankruptcy
cases.
Sec. 417. Definition of disinterested person.
Sec. 418. Factors for compensation of professional persons.
Sec. 419. Appointment of elected trustee.
Subtitle B--Small Business Bankruptcy Provisions
Sec. 421. Flexible rules for disclosure statement and plan.
Sec. 422. Definitions; effect of discharge.
Sec. 423. Standard form disclosure statement and plan.
Sec. 424. Uniform national reporting requirements.
Sec. 425. Uniform reporting rules and forms for small business cases.
Sec. 426. Duties in small business cases.
Sec. 427. Plan filing and confirmation deadlines.
Sec. 428. Plan confirmation deadline.
Sec. 429. Prohibition against extension of time.
Sec. 430. Duties of the United States trustee.
Sec. 431. Scheduling conferences.
Sec. 432. Serial filer provisions.
Sec. 433. Expanded grounds for dismissal or conversion and appointment
of trustee.
Sec. 434. Study of operation of title 11, United States Code, with
respect to small businesses.
Sec. 435. 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--IMPROVED BANKRUPTCY STATISTICS AND DATA
Sec. 601. Audit procedures.
Sec. 602. Improved bankruptcy statistics.
Sec. 603. Uniform rules for the collection of bankruptcy data.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.
TITLE VII--BANKRUPTCY TAX PROVISIONS
Sec. 701. Treatment of certain liens.
Sec. 702. Effective notice to government.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Tolling of priority of tax claim time periods.
Sec. 706. Priority property taxes incurred.
Sec. 707. Chapter 13 discharge of fraudulent and other taxes.
Sec. 708. Chapter 11 discharge of fraudulent taxes.
Sec. 709. Stay of tax proceedings.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
[[Page S2740]]
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Amendments to other chapters in title 11, United States Code.
Sec. 803. Claims relating to insurance deposits in cases ancillary to
foreign proceedings.
TITLE IX--FINANCIAL CONTRACT PROVISIONScontracts.
Sec. 901. Bankruptcy Code amendments.
Sec. 902. Damage measure.
Sec. 903. Asset-backed securitizations.
Sec. 904. Effective date; application of amendments.
TITLE X--PROTECTION OF FAMILY FARMERS
Sec. 1001. Reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Elimination of requirement that family farmer and spouse
receive over 50 percent of income from farming operation
in year prior to bankruptcy.
Sec. 1004. Certain claims owed to governmental units.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1101. Definitions.
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health
care business.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
TITLE XII--TECHNICAL AMENDMENTS
Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Special tax provisions.
Sec. 1208. Effect of conversion.
Sec. 1209. Allowance of administrative expenses.
Sec. 1210. Priorities.
Sec. 1211. Exemptions.
Sec. 1212. Exceptions to discharge.
Sec. 1213. Effect of discharge.
Sec. 1214. Protection against discriminatory treatment.
Sec. 1215. Property of the estate.
Sec. 1216. Preferences.
Sec. 1217. Postpetition transactions.
Sec. 1218. Disposition of property of the estate.
Sec. 1219. General provisions.
Sec. 1220. Abandonment of railroad line.
Sec. 1221. Contents of plan.
Sec. 1222. Discharge under chapter 12.
Sec. 1223. Bankruptcy cases and proceedings.
Sec. 1224. Knowing disregard of bankruptcy law or rule.
Sec. 1225. Transfers made by nonprofit charitable corporations.
Sec. 1226. Protection of valid purchase money security interests.
Sec. 1227. Extensions.
Sec. 1228. Bankruptcy judgeships.
TITLE XIII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 1301. Effective date; application of amendments.
TITLE I--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)'';
(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 next to last sentence; and
(C) by adding at the end 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 reduced by the amounts
determined under clauses (ii), (iii), and (iv), and
multiplied by 60 is not less than the lesser of--
``(I) 25 percent of the debtor's nonpriority unsecured
claims in the case; or
``(II) $15,000.
``(ii) The debtor's monthly expenses shall be the
applicable monthly (excluding payments for debts) expenses
under standards 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--
``(I) 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; divided by
``(II) 60.
``(iv) The debtor's expenses for payment of all priority
claims (including priority child support and alimony claims)
shall be calculated as--
``(I) the total amount of debts entitled to priority;
divided by
``(II) 60.
``(B)(i) In any proceeding brought under this subsection,
the presumption of abuse may be rebutted by demonstrating
special circumstances that justify additional expenses or
adjustments of current monthly total income. In order to
establish special circumstances, the debtor shall be required
to--
``(I) itemize each additional expense or adjustment of
income; and
``(II) provide--
``(aa) documentation for such expenses; and
``(bb) a detailed explanation of the special circumstances
that make such expenses necessary and reasonable.
``(ii) 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 adjustments to income are required.
``(iii) The presumption of abuse may be rebutted if the
additional expenses or adjustments to income referred to in
clause (i) cause the product of the debtor's current monthly
income reduced by the amounts determined under clauses (ii),
(iii), and (iv) of subparagraph (A) multiplied by 60 to be
less than the lesser of--
``(I) 25 percent of the debtor's nonpriority unsecured
claims; or
``(II) $15,000.
``(C)(i) As part of the schedule of current income and
expenditures required under section 521, the debtor shall
include a statement of the debtor's current monthly income,
and the calculations that determine whether a presumption
arises under subparagraph (A)(i), that shows how each such
amount is calculated.
``(ii) The Supreme Court shall promulgate rules under
section 2075 of title 28, that prescribe a form for a
statement under clause (i) and may provide general rules on
the content of the statement.
``(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) of such paragraph 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) `current monthly income'--
``(A) means the average monthly income from all sources
which the debtor, or in a joint case, the debtor and the
debtor's spouse, receive without regard to whether the income
is taxable income, derived during the 180-day period
preceding the date of determination; and
``(B) includes any amount paid by any entity 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--
(A) by inserting ``(a)'' before ``The trustee shall--'';
and
(B) by adding at the end the following:
``(b)(1) With respect to an individual debtor under this
chapter--
``(A) the United States trustee or bankruptcy administrator
shall review all materials filed by the debtor and, not later
than 10 days before 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); and
``(B) not later than 5 days after receiving a statement
under subparagraph (A), the court shall provide a copy of the
statement to all creditors.
``(2) The United States trustee or bankruptcy administrator
shall not later than 30 days after receiving a statement
filed under paragraph (1) file a motion to dismiss or convert
under section 707(b), or file a statement setting forth the
reasons the United States trustee or bankruptcy administrator
does not believe that such a motion would be appropriate. If,
based on the filing of such statement with the court, the
United States trustee or bankruptcy administrator determines
that the debtor's case should be presumed to be an abuse
under section 707(b)
[[Page S2741]]
and the product of the debtor's current monthly income,
multiplied by 12 is not less than--
``(A) the highest national or applicable State median
family income reported for a family of equal or lesser size,
whichever is greater; or
``(B) in the case of a household of 1 person, the national
or applicable State median household income for 1 earner,
whichever is greater.
``(3)(A) The court shall order the counsel for the debtor
to reimburse the panel trustee for all reasonable costs in
prosecuting a motion brought under section 707(b), including
reasonable attorneys' fees, if--
``(i) a panel trustee appointed under section 586(a)(1) of
title 28 brings a motion for dismissal or conversion under
this subsection; and
``(ii) the court--
``(I) grants that motion; and
``(II) finds that the action of the counsel for the debtor
in filing under this chapter was not substantially justified.
``(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).
``(4)(A) Except as provided in subparagraph (B) and subject
to paragraph (5), 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) 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 a total current
monthly income equal to or less than the national or
applicable State median family monthly income calculated on a
monthly basis for a family of equal size.''.
(c) Clerical Amendment.--The table of sections for 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)(1) 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 I of chapter 5) a written notice prescribed by the
United States trustee for the district in which the petition
is filed under section 586 of title 28.
``(2) The notice shall contain the following:
``(A) A brief description of chapters 7, 11, 12, and 13 and
the general purpose, benefits, and costs of proceeding under
each of those chapters.
``(B) 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--
(1) 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, United States
Code, and who operate financial management education programs
for debtors; and
(2) develop a financial management training curriculum and
materials that may be used to educate individual debtors
concerning how to better manage their finances.
(b) Test.--
(1) In general.--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) Availability of curriculum and materials.--For a 1-year
period beginning not later than 270 days after the date of
enactment of this Act, the curriculum and materials referred
to in paragraph (1) shall be made available by the Director,
directly or indirectly, on request to individual debtors in
cases filed during that 1-year period under chapter 7 or 13
of title 11, United States Code.
(c) Evaluation.--
(1) In general.--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 issued on October 20, 1997, that are
representative of consumer education programs carried out
by--
(i) the credit industry;
(ii) trustees serving under chapter 13 of title 11, United
States Code; and
(iii) consumer counseling groups.
(2) Report.--Not later than 3 months after concluding the
evaluation under paragraph (1), 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 Congress, containing the findings
of the Director regarding the effectiveness of such
curriculum, such materials, and such programs.
SEC. 105. CREDIT COUNSELING.
(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 from
an approved nonprofit credit counseling service described in
section 111(a) an individual or group briefing that outlined
the opportunities for available credit counseling and
assisted that individual in performing a related budget
analysis.
``(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 nonprofit
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 1 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 nonprofit 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:
``(g) 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.
``(h) Subsection (g) 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.
``(i) Each United States trustee or bankruptcy
administrator that makes a determination described in
subsection (h) 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, is amended--
(1) by inserting ``(a)'' before ``The debtor shall--''; and
[[Page S2742]]
(2) by adding at the end the following:
``(b) 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) 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 for 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.''.
(f) Limitation.--Section 362 of title 11, United States
Code, is amended by adding at the end the following:
``(i) If a case commenced under chapter 7, 11, or 13 of
this title is dismissed due to the creation of a debt
repayment plan, for purposes of subsection (c)(3), any
subsequent case commenced by the debtor under any such
chapter shall not be presumed to be filed not in good
faith.''.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
SEC. 201. PROMOTION OF 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
of the claim, if--
``(A) 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;
``(B) the offer of the debtor under subparagraph (A)--
``(i) was made at least 60 days before the filing of the
petition; and
``(ii) provided for payment of at least 60 percent of the
amount of the debt 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, by clear
and convincing evidence, that--
``(A) the creditor unreasonably refused to consider the
debtor's proposal; and
``(B) the proposed alternative repayment schedule was made
in the 60-day period specified in paragraph (1)(B)(i).''.
(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. 202. 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).''.
SEC. 203. VIOLATIONS OF THE AUTOMATIC STAY.
Section 362(a) of title 11, United States Code, is
amended--
(1) in paragraph (7), by striking ``and'' at the end;
(2) in paragraph (8), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(9) any communication (other than a recitation of the
creditor's legal rights) threatening a debtor (for the
purpose of coercing an agreement for the reaffirmation of
debt), at any time after the commencement and before the
granting of a discharge in a case under this title, of an
intention to--
``(A) file a motion to--
``(i) determine the dischargeability of a debt; or
``(ii) under section 707(b), to dismiss or convert a case;
or
``(B) repossess collateral from the debtor to which the
stay applies.''.
SEC. 204. DISCOURAGING ABUSE OF REAFFIRMATION PRACTICES.
(a) In General.--Section 524 of title 11, United States
Code, as amended by section 202 of this Act, is amended--
(1) in subsection (c)--
(A) in paragraph (2)--
(i) in subparagraph (A), by striking ``and'' at the end;
(ii) in subparagraph (B), by inserting ``and'' at the end;
and
(iii) by adding at the end the following:
``(C)(i) the consideration for such agreement is based on a
wholly unsecured consumer debt; and
``(ii) such agreement contains a clear and conspicuous
statement that advises the debtor that--
``(I) the debtor is entitled to a hearing before the court
at which--
``(aa) the debtor shall appear in person; and
``(bb) the court shall decide whether the agreement
constitutes an undue hardship, is not in the debtor's best
interest, or is not the result of a threat by the creditor to
take an action that, at the time of the threat, that the
creditor may not legally take or does not intend to take; and
``(II) if the debtor is represented by counsel, the debtor
may waive the debtor's right to a hearing under subclause (I)
by signing a statement--
``(aa) waiving the hearing;
``(bb) stating that the debtor is represented by counsel;
and
``(cc) identifying the counsel.''; and
(B) in paragraph (6)(A)--
(i) in clause (i), by striking ``and'' at the end;
(ii) in clause (ii), by striking the period and inserting
``and''; and
(iii) by adding at the end the following:
``(iii) not an agreement that the debtor entered into as a
result of a threat by the creditor to take an action that, at
the time of the threat, the creditor could not legally take
or did not intend to take.''; and
(2) in subsection (d), in the third sentence, by inserting
after ``during the course of negotiating an agreement'' the
following: ``(or if the consideration by such agreement is
based on a wholly secured consumer debt, and the debtor has
not waived the right to a hearing under subsection
(c)(2)(C))''.
(b) Law Enforcement.--
(1) In general.--Chapter 9 of title 18, United States Code,
is amended by adding at the end the following:
``Sec. 158. Designation of United States attorneys and agents
of the Federal Bureau of Investigation to address abusive
reaffirmations of debt
``(a) In General.--The Attorney General of the United
States shall designate the individuals described in
subsection (b) to have primary responsibility in carrying out
enforcement activities in addressing violations of section
152 or 157 relating to abusive reaffirmations of debt.
``(b) United States District Attorneys and Agents of the
Federal Bureau of Investigation--The individuals referred to
in subsection (a) are
``(1) a United States attorney for each judicial district
of the United States; and
``(2) an agent of the Federal Bureau of Investigation
(within the meaning of section 3107) for each field office of
the Federal Bureau of Investigation.
``(c) Bankruptcy Investigations.--Each United States
attorney designated under this section shall have primary
responsibility for carrying out the duties of a United States
attorney under section 3057.''.
(2) Clerical amendment.--The analysis for chapter 9 of
title 18, United States Code, is amended by adding at the end
the following:
``158. Designation of United States attorneys and agents of the Federal
Bureau of Investigation to address abusive reaffirmations
of debt.''.
(c) Exceptions to Discharge.--Section 523 of title 11,
United States Code, is amended by adding at the end the
following:
``(f) Nothing in this section or in any other provision of
this title shall preempt any State law relating to unfair
trade practices that imposes restrictions on creditor conduct
that would give rise to liability--
``(1) under this section; or
``(2) under section 524, for failure to comply with
applicable requirements for seeking a reaffirmation of debt.
``(g) Actions by States.--The attorney general of a State,
or an official or agency designated by a State--
``(1) may bring an action on behalf of its residents to
recover damages on their behalf under subsection (d) or
section 524(c); and
``(2) may bring an action in a State court to enforce a
State criminal law that is similar to section 152 or 157 of
title 18.''.
Subtitle B--Priority Child Support
SEC. 211. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT
OBLIGATIONS.
Section 507(a) of title 11, United States Code, is
amended--
(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:
[[Page S2743]]
``(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. 212. 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), 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. 213. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT
OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, is
amended--
(1) by striking paragraph (2) and inserting the following:
``(2) under subsection (a)--
``(A) of the commencement 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 (17), by striking ``or'' at the end;
(3) in paragraph (18), by striking the period at the end
and inserting a semicolon; and
(4) by inserting after paragraph (18) the following:
``(19) under subsection (a) with respect to the withholding
of income under an order as specified in section 466(b) of
the Social Security Act (42 U.S.C. 666(b)); or
``(20) under subsection (a) with respect to--
``(A) the withholding, suspension, or restriction of
drivers' licenses, professional and occupational licenses,
and recreational licenses under 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. 214. 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. 215. 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. 216. 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. 217. AMENDMENT TO SECTION 1325 OF TITLE 11, UNITED
STATES CODE.
Section 1325(b)(2) of title 11, United States Code, is
amended by inserting ``(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)'' after
``received by the debtor''.
SEC. 218. 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. 219. COLLECTION OF CHILD SUPPORT.
(a) Duties of Trustee Under Chapter 7.--Section 704 of
title 11, United States Code, as amended by section 102(b) of
this Act, is amended--
(1) in subsection (a)--
(A) in paragraph (8), by striking ``and'' at the end;
(B) in paragraph (9), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(10) if, with respect to an individual debtor, there is a
claim for support of a child of the debtor or a custodial
parent of such child entitled to receive priority under
section 507(a)(1), provide the applicable notification
specified in subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In any case described in subsection (a)(10), the
trustee shall--
``(A)(i) notify in writing the holder of the claim of the
right of that holder to use the services of a State child
support enforcement agency established under sections 464 and
466 of the Social Security Act (42 U.S.C. 654 and 666,
respectively) for the State in which the holder resides; and
``(ii) include in the notice under this paragraph the
address and telephone number of the child support enforcement
agency; and
``(B)(i) notify in writing the State child support agency
of the State in which the holder of the claim resides of the
claim;
``(ii) include in the notice under this paragraph the name,
address, and telephone number of the holder of the claim; and
``(iii) at such time as the debtor is granted a discharge
under section 727, notify the holder of that claim and the
State child support agency of the State in which that holder
resides of--
``(I) the granting of the discharge;
``(II) the last recent known address of the debtor; and
``(III) with respect to the debtor's case, the name of each
creditor that holds a claim--
``(aa) that is not discharged under paragraph (2), (4), or
(14A) of section 523(a); or
``(bb) that was reaffirmed by the debtor under section
524(c).
``(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject of
the notice, that party may request from a creditor described
in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known
address of the debtor.
``(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address of a
debtor in connection with a request made under subparagraph
(A) shall not be liable to the debtor or any other person by
reason of making that disclosure.''.
(b) Duties of Trustee Under Chapter 13.--Section 1302 of
title 11, United States Code, as amended by section 102(b) of
this Act, is amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``and'' at the end;
(B) in paragraph (5), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(6) if, with respect to an individual debtor, there is a
claim for support of a child of the debtor or a custodial
parent of such child entitled to receive priority under
section
[[Page S2744]]
507(a)(1), provide the applicable notification specified in
subsection (d).''; and
(s) by adding at the end the following:
``(d)(1) In any case described in subsection (b)(6), the
trustee shall--
``(A)(i) notify in writing the holder of the claim of the
right of that holder to use the services of a State child
support enforcement agency established under sections 464 and
466 of the Social Security Act (42 U.S.C. 654 and 666,
respectively) for the State in which the holder resides; and
``(ii) include in the notice under this paragraph the
address and telephone number of the child support enforcement
agency; and
``(B)(i) notify in writing the State child support agency
of the State in which the holder of the claim resides of the
claim; and
``(ii) include in the notice under this paragraph the name,
address, and telephone number of the holder of the claim;
``(iii) at such time as the debtor is granted a discharge
under section 1328, notify the holder of the claim and the
State child support agency of the State in which that holder
resides of--
``(I) the granting of the discharge;
``(II) the last recent known address of the debtor; and
``(III) with respect to the debtor's case, the name of each
creditor that holds a claim--
``(aa) that is not discharged under paragraph (2), (4), or
(14A) of section 523(a); or
``(bb) that was reaffirmed by the debtor under section
524(c).
``(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject of
the notice, that party may request from a creditor described
in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known
address of the debtor.
``(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address of a
debtor in connection with a request made under subparagraph
(A) shall not be liable to the debtor or any other person by
reason of making that disclosure.''.
Subtitle C--Other Consumer Protections
SEC. 221. 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 nonexempt
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 assisted person in return for
the payment of money or other valuable consideration, or who
is a bankruptcy petition preparer under section 110, 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 (12 U.S.C. 1813)) or any
Federal credit union or State credit union (as those terms
are defined in section 101 of the Federal Credit Union Act
(12 U.S.C. 1751)), or any affiliate or subsidiary of such a
depository institution or credit union;''.
(b) Conforming Amendment.--Section 104(b)(1) of title 11,
United States Code, is amended by inserting ``101(3),'' after
``sections''.
SEC. 222. 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).
``(2) To the extent not covered in the written notice
described in paragraph (1) and not later than 3 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 that--
``(A) all information the assisted person is required to
provide with a petition and thereafter during a case under
this title shall be complete, accurate, and truthful;
``(B) all assets and all liabilities shall 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, shall be stated in those documents if
requested after reasonable inquiry to establish such value;
``(C) total current monthly income, projected monthly net
income and, in a case under chapter 13, monthly net income
shall be stated after reasonable inquiry; and
``(D) information an assisted person provides during the
case of that person may be audited under this title and the
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 a
substantially similar statement. 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 3 to 5 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
total current monthly income, projected monthly income and,
in a case under chapter 13, 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--
``(A) determine what property is exempt; and
``(B) value exempt property at replacement value, as
defined in section 506.
``(d) A debt relief agency shall maintain a copy of the
notices required under subsection (a) of this section for a
period of 2 years after the latest date on which the notice
is given the assisted person.''.
(b) Conforming Amendment.--The table of sections 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. 223. 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 222 of
this Act, is amended by adding at the end the following:
[[Page S2745]]
``Sec. 527. Debtor's bill of rights
``(a)(1) A debt relief agency shall--
``(A) not later than 5 business days after the first date
on which a debt relief agency provides any bankruptcy
assistance services to an assisted person, but before that
assisted person's petition under this title is filed--
``(i) 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
``(ii) give the assisted person a copy of the fully
executed and completed contract in a form the person is able
to retain;
``(B) 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 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; and
``(C) 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.
``(2) For purposes of paragraph (1)(B), an advertisement
shall be of bankruptcy assistance services if that
advertisement describes or offers bankruptcy assistance with
a plan under chapter 12, without regard to whether chapter 13
is specifically mentioned. A statement such as `federally
supervised repayment plan' or `Federal debt restructuring
help' or any other similar statement that would lead a
reasonable consumer to believe that help with debts is being
offered when in fact in most cases the help available is
bankruptcy assistance with a plan under chapter 13 is a
statement covered under the preceding sentence.
``(b) A debt relief agency shall not--
``(1) fail to perform any service that 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, that--
``(A) is untrue and misleading; or
``(B) 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 may
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 under
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 sections for
chapter 5 of title 11, United States Code, as amended by
section 222 of this Act, is amended by inserting after the
item relating to section 526 of title 11, United States Code,
the following:
``527. Debtor's bill of rights.''.
SEC. 224. ENFORCEMENT.
(a) Enforcement.--Subchapter II of chapter 5 of title 11,
United States Code, as amended by section 223 of this Act, is
amended by adding at the end the following:
``Sec. 528. Debt relief agency enforcement
``(a) Any waiver by any assisted person of any protection
or right provided by or under section 526 or 527 shall be
void and may not be enforced by any Federal or State court or
any other person.
``(b)(1) Any contract between a debt relief agency and an
assisted person for bankruptcy assistance that does not
comply with the material requirements of section 526 or 527
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 that 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; 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 that 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, 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, or engaged in a clear and
consistent pattern or practice of violating section 526 or
527, the court may--
``(A) enjoin the violation of such section; or
``(B) impose an appropriate civil penalty against such
person.
``(c) 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 sections for
chapter 5 of title 11, United States Code, as amended by
section 223 of this Act, is amended by inserting after the
item relating to section 527 of title 11, United States Code,
the following:
``528. Debt relief agency enforcement.''.
SEC. 225. SENSE OF CONGRESS.
It is the sense of Congress that States should develop
curricula relating to the subject of personal finance,
designed for use in elementary and secondary schools.
SEC. 226. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES
CODE.
(a) Section 507(a) of title 11, United States Code, as
amended by section 211 of this Act, 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''.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. REINFORCEMENT OF THE FRESH START.
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. 302. 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:
``(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 preceding
1-year period but was dismissed, other than a case refiled
under a chapter other than chapter 7 after dismissal under
section 707(b)--
``(A) 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;
``(B) 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;
and
``(C) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption
may be rebutted by clear and convincing evidence to the
contrary)--
``(i) as to all creditors, if--
``(I) more than 1 previous case under any of chapter 7, 11,
or 13 in which the individual was a debtor was pending within
the preceding 1-year period;
[[Page S2746]]
``(II) a previous case under any of chapter 7, 11, or 13 in
which the individual was a debtor was dismissed within such
1-year period, after the debtor failed to--
``(aa) 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 a
substantial excuse unless the dismissal was caused by the
negligence of the debtor's attorney);
``(bb) provide adequate protection as ordered by the court;
or
``(cc) 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 chapter 7, 11,
or 13 of this title, or any other reason to conclude that the
later case will be concluded--
``(aa) if a case under chapter 7 of this title, with a
discharge; or
``(bb) if a case under chapter 11 or 13 of this title, with
a confirmed plan which will be fully performed; and
``(ii) 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; and
``(4)(A)(i) 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), the stay under subsection (a)
shall not go into effect upon the filing of the later case;
and
``(ii) on request of a party in interest, the court shall
promptly enter an order confirming that no stay is in effect;
``(B) if, within 30 days after the filing of the later
case, a party in interest requests 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;
``(C) a stay imposed under subparagraph (B) shall be
effective on the date of entry of the order allowing the stay
to go into effect; and
``(D) for purposes of subparagraph (B), a case is
presumptively not filed in good faith (but such presumption
may be rebutted by clear and convincing evidence to the
contrary)--
``(i) 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
``(ii) 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. 303. 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 under 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, as amended by section 213 of this Act, is
amended--
(1) in paragraph (19), by striking ``or'' at the end;
(2) in paragraph (20), by striking the period at the end;
and
(3) by inserting after paragraph (20) the following:
``(21) 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) as to that property
in any prior bankruptcy case for a period of 2 years after
entry of such an order, except that the debtor, in a
subsequent case, 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
``(22) 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) 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. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(1) in section 521(a), as so redesignated--
(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
within 45 days after the first meeting of creditors under
section 341(a)--
``(A) enters into an agreement with the creditor under
section 524(c) with respect to the claim secured by such
property; or
``(B) redeems such property from the security interest
under section 722.''; and
(C) by adding at the end the following:
``(b) If the debtor fails to so act within the 45-day
period specified in subsection (a)(6), 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. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES
NOT COMPLETE INTENDED SURRENDER OF CONSUMER
DEBT COLLATERAL.
Title 11, United States Code, is amended--
(1) in section 362--
(A) in subsection (c), by striking ``(e), and (f)'' and
inserting ``(e), (f), and (h)''; and
(B) by redesignating subsection (h), as amended by section
227 of this Act, as subsection (j) and by inserting after
subsection (g) the following:
``(h)(1) Subject to paragraph (2), in an individual case
under 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
period of time set by section 521(a)(2) to--
``(A) file timely any statement of intention required under
section 521(a)(2) with respect to that property or to
indicate therein that the debtor--
``(i) will either surrender the property or retain the
property; and
``(ii) if retaining the property, will, as applicable--
``(I) redeem the property under section 722;
``(II) reaffirm the debt the property secures under section
524(c); or
``(III) assume the unexpired lease under section 365(p) if
the trustee does not do so; or
``(B) take timely the action specified in that statement of
intention, as the statement 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.
``(2) Paragraph (1) shall not apply if 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 section 304 of this Act--
(A) in subsection (a)(2), as redesignated--
(i) by striking ``consumer'';
(ii) in subparagraph (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)''; and
(II) by striking ``forty-five day period'' and inserting
``30-day period''; and
(iii) in subparagraph (C), by inserting ``except as
provided in section 362(h)'' before the semicolon; and
(B) by adding at the end the following:
``(c) If the debtor fails timely to take the action
specified in subsection (a)(6), or in paragraph (1) or (2) of
section 362(h), 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
[[Page S2747]]
section 522(f), 544, 545, 547, 548, or 549, nothing in this
title shall prevent or limit the operation of a provision in
the underlying lease or agreement that has the effect of
placing the debtor in default under that 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. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER
13.
(a) In General.--Section 1325(a)(5)(B)(i) of title 11,
United States Code, is amended to read as follows:
``(i) the plan provides that--
``(I) the holder of such claim retain the lien securing
such claim until the earlier of--
``(aa) the payment of the underlying debt determined under
nonbankruptcy law; or
``(bb) discharge under section 1328; and
``(II) 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''.
(b) Restoring the Foundation for Secured Credit.--Section
1325(a) of title 11, United States Code, is amended by adding
at the end the following flush sentence:
``For purposes of paragraph (5), section 506 shall not apply
to a claim described in that paragraph if the debt that is
the subject of the claim was incurred within the 5-year
period preceding the filing of the petition and the
collateral for that debt consists of a motor vehicle (as
defined in section 30102 of title 49) acquired for the
personal use of the debtor, or if collateral for that debt
consists of any other thing of value, if the debt was
incurred during the 6-month period preceding that filing.''.
(c) Definitions.--Section 101 of title 11, United States
Code, as amended by section 221 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 (27), the following:
``(27A) `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;''.
SEC. 307. 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. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EXEMPTION.
Section 522 of title 11, United States Code, as amended by
section 307 of this Act, 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 on 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. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.
(a) 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
under 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.''.
(b) 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) is automatically terminated.
``(2)(A) 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.
``(B) If within 30 days after notice is provided under
subparagraph (A), 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.
``(C) The stay under section 362 and the injunction under
section 524(a)(2) 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 and any stay under
section 1301 is automatically terminated with respect to the
property subject to the lease.''.
(c) Adequate Protection of Lessors and Purchase Money
Secured Creditors.--
(1) In general.--Subchapter I of chapter 13 of title 11,
United States Code, is amended by inserting after section
1307 the following:
``Sec. 1308. 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),
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.
``(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 for--
``(1) payments to a creditor or lessor described in
subsection (a)(1); and
``(2) 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 the date that is 60 days after the
filing 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.''.
(2) Clerical amendment.--The table of sections for chapter
13 of title 11, United States Code, is amended, in the matter
relating to subchapter I, by inserting after the item
relating to section 1307 the following:
[[Page S2748]]
``1308. Adequate protection in chapter 13 cases.''.
SEC. 310. 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)--
``(I) 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 are presumed to be
nondischargeable; and
``(II) cash advances aggregating more than $750 that are
extensions of consumer credit under an open end credit plan
obtained by an individual debtor on or within 70 days before
the order for relief under this title, are presumed to be
nondischargeable; and
``(ii) for purposes of this subparagraph--
``(I) the term `extension of credit under an open end
credit plan' means an extension of credit under an open end
credit plan, within the meaning of the Consumer Credit
Protection Act (15 U.S.C. 1601 et seq.);
``(II) the term `open end credit plan' has the meaning
given that term under section 103 of Consumer Credit
Protection Act (15 U.S.C. 1602); and
``(III) 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.''.
SEC. 311. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as amended
by section 303(b) of this Act, is amended--
(1) in paragraph (21), by striking ``or'' at the end;
(2) in paragraph (22), by striking the period at the end
and inserting a semicolon; and
(3) by inserting after paragraph (22) the following:
``(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;
``(24) under subsection (a)(3), of the commencement 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 under the lease agreement or
applicable State law; or
``(25) under subsection (a)(3), of eviction actions based
on endangerment to property or person or the use of illegal
drugs.''.
SEC. 312. EXTENSION OF 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 if the debtor has
received a discharge in any case filed under this title
within 5 years before the order for relief under this
chapter.''.
SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
Section 522(f) of title 11, United States Code, is amended
by adding at the end the following:
``(4)(A) Subject to subparagraph (B), for purposes of
paragraph (1)(B), the term `household goods' means--
``(i) clothing;
``(ii) furniture;
``(iii) appliances;
``(iv) 1 radio;
``(v) 1 television;
``(vi) 1 VCR;
``(vii) linens;
``(viii) china;
``(ix) crockery;
``(x) kitchenware;
``(xi) educational materials and educational equipment
primarily for the use of minor dependent children of the
debtor, but only 1 personal computer only if used primarily
for the education or entertainment of such minor children;
``(xii) medical equipment and supplies;
``(xiii) furniture exclusively for the use of minor
children, or elderly or disabled dependents of the debtor;
and
``(xiv) personal effects (including wedding rings and the
toys and hobby equipment of minor dependent children) of the
debtor and the dependents of the debtor.
``(B) The term `household goods' does not include--
``(i) works of art (unless by or of the debtor or the
dependents of the debtor);
``(ii) electronic entertainment equipment (except 1
television, 1 radio, and 1 VCR);
``(iii) items acquired as antiques;
``(iv) jewelry (except wedding rings); and
``(v) 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. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.
Section 523(a) of title 11, United States Code, is amended
by inserting after paragraph (14) the following:
``(14A)(A) 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;
``(B) except that all debts incurred to pay
nondischargeable debts shall be presumed to be
nondischargeable debts if incurred within 70 days before the
filing of the petition (except that, in any case in which
there is an allowed claim under section 502 for child support
or spousal support entitled to priority under section
507(a)(1) and that was filed in a timely manner, debts that
would otherwise be presumed to be nondischargeable debts by
reason of this subparagraph shall be treated as dischargeable
debts);''.
(b) 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);
``(2) of the kind specified in paragraph (2), (4), (3)(B),
(5), (8), or (9) of section 523(a);
``(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. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13
CASES.
(a) Notice.--Section 342 of title 11, United States Code,
is amended--
(1) in subsection (c)--
(A) by inserting ``(1)'' after ``(c)''; and
(B) by striking ``, but the failure of such notice to
contain such information shall not invalidate the legal
effect of such notice''; and
(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)(1) Notice given to a creditor other than as provided
in this section shall not be effective notice until that
notice has been brought to the attention of the creditor. If
the creditor designates a person or department to be
responsible for receiving notices concerning bankruptcy cases
and establishes reasonable procedures so that bankruptcy
notices received by the creditor are to be delivered to such
department or person, notice shall not be considered to have
been brought to the attention of the creditor until received
by such person or department.
``(2) No sanction under section 362(h) or any other
sanction that a court may impose on account of violations of
the stay under section 362(a) or failure to comply with
section 542 or 543 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 section 305 of this Act, is
amended--
(1) in subsection (a), 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 under section 110(b)(1) indicating that
such attorney or bankruptcy petition preparer delivered to
the debtor any notice required by section 342(b); 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 before the filing of the
petition;
``(vi) a statement of the amount of projected monthly net
income, itemized to show how the amount is 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
(2) by adding at the end the following:
``(d)(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)(A) 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.
``(B) The court shall make such plan available to the
creditor who requests such plan--
``(i) at a reasonable cost; and
[[Page S2749]]
``(ii) not later than 5 days after such request.
``(e) 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.
``(f)(1) A statement referred to in subsection (e)(4) shall
disclose--
``(A) the amount and sources of income of the debtor;
``(B) the identity of any person responsible with the
debtor for the support of any dependent of the debtor; and
``(C) the identity of any person 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 (f).
``(g)(1) Not later than 30 days after the date of enactment
of the Bankruptcy Reform Act of 1999, 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 Bankruptcy Reform Act of 1999, 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 to--
``(i) further protect the confidentiality of tax
information; and
``(ii) 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 shall provide--
``(1) 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
``(2) such other personal identifying information relating
to the debtor that establishes the identity of the debtor.''.
SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR
PROVIDE REQUIRED INFORMATION.
Section 521 of title 11, United States Code, as amended by
section 315 of this Act, is amended by adding at the end the
following:
``(i)(1) Notwithstanding section 707(a), 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. If requested, the court shall 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. 317. 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 later than 45 days after the meeting of creditors under
section 341(a).''.
(b) Filing of Plan.--Section 1321 of title 11, United
States Code, is amended to read as follows:
``Sec. 1321. Filing of plan
``Not later than 90 days after the order for relief under
this chapter, the debtor shall file a plan, 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. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN
CERTAIN CASES.
Section 1322(d) of title 11, United States Code, is amended
to read as follows:
``(d)(1) Except as provided in paragraph (2), the plan may
not provide for payments over a period that is longer than 3
years.
``(2) The plan may provide for payments over a period that
is longer than 3 years if--
``(A) the plan is for a case that was converted to a case
under this chapter from a case under chapter 7, in which case
the plan shall provide for payments over a period of 5 years;
or
``(B) the plan is for a case that is not described in
subparagraph (A), and the court, for cause, approves a period
longer than 3 years, but not to exceed 5 years.''.
SEC. 319. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE
9011 OF THE FEDERAL RULES OF BANKRUPTCY
PROCEDURE.
It is the sense of 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--
(1) well grounded in fact; and
(2) warranted by existing law or a good-faith argument for
the extension, modification, or reversal of existing law.
SEC. 320. 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 for good cause, as described in
findings made by the court.''.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
SEC. 401. 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, 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), under such security agreement, lease,
or conditional sale contract that--
``(i) 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) 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) 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
[[Page S2750]]
``(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.
``(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
under 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 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.
``(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 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), under such security agreement, lease,
or conditional sale contract that occurs--
``(i) before the date of the order is cured before the
expiration of such 60-day period;
``(ii) 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) 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 under 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
``(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
under 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. 402. 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 under section 15A of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-3) or a
national securities exchange registered with the Securities
and Exchange Commission under section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f);''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, as amended by section 311 of this Act, is
amended--
(1) in paragraph (24), by striking ``or'' at the end;
(2) in paragraph (25), by striking the period at the end
and inserting ``; or''; and
(3) by inserting after paragraph (25) the following:
``(26) under subsection (a), of--
``(A) the commencement or continuation of an investigation
or action by a securities self regulatory organization to
enforce such organization's regulatory power;
``(B) 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
``(C) 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. 403. 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. 404. PROTECTION OF REFINANCE OF SECURITY INTEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2) of
title 11, United States Code, are each amended by striking
``10'' each place it appears and inserting ``30''.
SEC. 405. 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 120 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. 406. 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
[[Page S2751]]
the court determines that the change is necessary to ensure
adequate representation of creditors or equity security
holders.''.
SEC. 407. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES
CODE.
Section 546 of title 11, United States Code, is amended--
(1) by redesignating the second subsection designated as
subsection (g) (as added by section 222(a) of Public Law 103-
394) as subsection (i); and
(2) by adding at the end the following:
``(j)(1) Notwithstanding section 545 (2) and (3), the
trustee may not avoid a warehouseman's lien for storage,
transportation or other costs incidental to the storage and
handling of goods.
``(2) The prohibition under paragraph (1) shall be applied
in a manner consistent with any applicable State statute that
is similar to section 7-209 of the Uniform Commercial
Code.''.
SEC. 408. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code, is
amended by striking ``20'' and inserting ``45''.
SEC. 409. AMENDMENT TO SECTION 330(A) OF TITLE 11, UNITED
STATES CODE.
Section 330(a)(3) of title 11, United States Code, is
amended--
(1) by striking ``(A) the; and inserting ``(i) the'';
(2) by striking ``(B)'' and inserting ``(ii)'';
(3) by striking ``(C)'' and inserting ``(iii)'';
(4) by striking ``(D)'' and inserting ``(iv)'';
(5) by striking ``(E)'' and inserting ``(v)'';
(6) in subparagraph (A), by inserting ``to an examiner,
trustee under chapter 11, or professional person'' after
``awarded''; and
(7) by adding at the end the following:
``(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. 410. 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. 411. PREFERENCES.
Section 547(c) of title 11, United States Code, is
amended--
(1) by striking paragraph (2) and inserting the following:
``(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
$5,000.''.
SEC. 412. 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. 413. 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) The 120-day period specified in paragraph (1) may
not be extended beyond a date that is 18 months after the
date of the order for relief under this chapter.
``(B) The 180-day period specified in paragraph (1) may not
be extended beyond a date that is 20 months after the date of
the order for relief under this chapter.''.
SEC. 414. 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
``but nothing in this paragraph'' and inserting ``or a lot in
a homeowners association, for as long as the 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, but nothing in this paragraph''.
SEC. 415. 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 1 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. 416. ELIMINATION OF CERTAIN FEES PAYABLE IN CHAPTER 11
BANKRUPTCY CASES.
(a) Amendments.--Section 1930(a)(6) of title 28, United
States Code, is amended--
(1) in the first sentence by striking ``until the case is
converted or dismissed, whichever occurs first''; and
(2) in the second 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. 417. 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. 418. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.
Section 330(a)(3) of title 11, United States Code, is
amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) by redesignating subparagraph (E) as subparagraph (F);
and
(3) by inserting after subparagraph (D) the following:
``(E) with respect to a professional person, whether the
person is board certified or otherwise has demonstrated skill
and experience in the bankruptcy field;''.
SEC. 419. 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.
``(B) Upon the filing of a report under subparagraph (A)--
``(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.
``(C) In the case of any dispute arising out of an election
described in subparagraph (A), the court shall resolve the
dispute.''.
Subtitle B--Small Business Bankruptcy Provisions
SEC. 421. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.
Section 1125 of title 11, United States Code, is amended by
striking subsection (f) and inserting the following:
``(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
under 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 later 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. 422. DEFINITIONS; EFFECT OF DISCHARGE.
(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;
[[Page S2752]]
``(51D) `small business debtor'--
``(A) subject to subparagraph (B), means a person
(including any affiliate of such person that is also a debtor
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) for a case in which the United States trustee has
appointed under section 1102(a)(1) a committee of unsecured
creditors that the court has determined is sufficiently
active and representative to provide effective oversight of
the debtor; and
``(B) does not include any member of a group of affiliated
debtors that has aggregate noncontingent liquidated secured
and unsecured debts in an amount greater than $4,000,000
(excluding debt owed to 1 or more affiliates or insiders);''.
(b) Effect of Discharge.--Section 524 of title 11, United
States Code, as amended by section 204 of this Act, is
amended by adding at the end the following:
``(j)(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. 423. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
Within a reasonable period of time after the date of the
enactment of this Act, the Advisory Committee on Bankruptcy
Rules of the Judicial Conference of the United States shall
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. 424. UNIFORM NATIONAL REPORTING REQUIREMENTS.
(a) Reporting Required.--
(1) In general.--Chapter 3 of title 11, United States Code,
is amended by inserting after section 307 the following:
``Sec. 308. Debtor reporting requirements
``(1) For purposes of this section, the term
`profitability' means, with respect to a debtor, the amount
of money that the debtor has earned or lost during current
and recent fiscal periods.
``(2) A small business debtor shall file periodic financial
and other reports containing information including--
``(A) the debtor's profitability;
``(B) reasonable approximations of the debtor's projected
cash receipts and cash disbursements over a reasonable
period;
``(C) comparisons of actual cash receipts and disbursements
with projections in prior reports;
``(D)(i) whether the debtor is--
``(I) in compliance in all material respects with
postpetition requirements imposed by this title and the
Federal Rules of Bankruptcy Procedure; and
``(II) timely filing tax returns and paying taxes and other
administrative claims when due; and
``(ii) if the debtor is not in compliance with the
requirements referred to in clause (i)(I) or filing tax
returns and making the payments referred to in clause
(i)(II), what the failures are and how, at what cost, and
when the debtor intends to remedy such failures; and
``(iii) 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) Clerical amendment.--The table of sections for 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 under section 2075 of 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. 425. 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 among--
(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 the small
business debtor's financial condition and plan the small
business debtor's future.
SEC. 426. DUTIES IN SMALL BUSINESS CASES.
(a) Duties in Chapter 11 Cases.--Title 11, 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 unless the court waives that 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;
``(5) subject to section 363(c)(2), maintain insurance
customary and appropriate to the industry;
``(6)(A) timely file tax returns;
``(B) subject to section 363(c)(2), 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), 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
that requirement after notice and hearing, upon a finding of
extraordinary and compelling circumstances; and
``(7) allow the United States trustee, or a designated
representative of the United States trustee, 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 for 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. 427. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121 of title 11, United States Code, is amended by
striking subsection (e) and inserting the following:
``(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 that period is
--
``(A) shortened on request of a party in interest made
during the 90-day period;
``(B) extended as provided by this subsection, after notice
and hearing; or
``(C) 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), 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 period of 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. 428. 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).''.
[[Page S2753]]
SEC. 429. PROHIBITION AGAINST EXTENSION OF TIME.
Section 105(d) of title 11, United States Code, is
amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2)(B)(vi), by striking the period at the
end and inserting ``; and''; and
(3) 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), except as provided
in section 1121(e)(3).''.
SEC. 430. 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 (5), by striking ``and'' at the end;
(3) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(4) by inserting after paragraph (6) the following:
``(7) 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--
``(i) begin to investigate the debtor's viability;
``(ii) inquire about the debtor's business plan;
``(iii) explain the debtor's obligations to file monthly
operating reports and other required reports;
``(iv) attempt to develop an agreed scheduling order; and
``(v) inform the debtor of other obligations;
``(B) if 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
``(8) in any case 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 after
making that finding to the court for relief.''.
SEC. 431. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, as amended
by section 429 of this Act, is amended--
(1) in the matter preceding paragraph (1) by striking ``,
may'';
(2) by striking paragraph (1) and inserting the following:
``(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. 432. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is amended--
(1) in subsection (j), as redesignated by section 305(1) of
this Act--
(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, the recovery under paragraph (1) against such
entity shall be limited to actual damages.''; and
(2) by inserting after subsection (j), as added by section
419 of this Act, the following:
``(k)(1) Except as provided in paragraph (2), 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--
``(A) is a debtor in a small business case pending at the
time the petition is filed;
``(B) was a debtor in a small business case that 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;
``(C) 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
``(D) 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).
``(2) Paragraph (1) does not apply to the filing of a
petition if the debtor proves by a preponderance of the
evidence that--
``(A) the filing of that petition resulted from
circumstances beyond the control of the debtor not
foreseeable at the time the case then pending was filed; and
``(B) it is more likely than not that the court will
confirm a feasible plan, but not a liquidating plan, within a
reasonable period of time.''.
SEC. 433. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND
APPOINTMENT OF TRUSTEE.
(a) Expanded Grounds for Dismissal or Conversion.--Section
1112 of title 11, United States Code, is amended by striking
subsection (b) and inserting the following:
``(b)(1) Except as provided in paragraph (2), in subsection
(c), and section 1104(a)(3), 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
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--
``(i) a period of time fixed under this title or by order
of the court entered under section 1121(e)(3); or
``(ii) a reasonable period of time if no period of 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)(I) the act or omission will be cured within a
reasonable period of time fixed by the court, but 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
``(II) compelling circumstances beyond the control of the
debtor justify an extension.
``(3) 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.
``(4) 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) 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;
``(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.
``(5) 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.''.
(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, but the court determines that the appointment
of a trustee is in the best interests of creditors and the
estate.''.
SEC. 434. STUDY OF OPERATION OF TITLE 11, 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 of
the United States, 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, 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
[[Page S2754]]
(2) submit to the President pro tempore of the Senate and
the Speaker of the House of Representatives a report
summarizing that study.
SEC. 435. 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 striking subparagraph (B) and inserting the
following:
``(B) the debtor has commenced monthly payments that--
``(i) may, in the debtor's sole discretion, notwithstanding
section 363(c)(2), 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); and
``(ii) 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 striking the last sentence and inserting the
following:
``(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--IMPROVED BANKRUPTCY STATISTICS AND DATA
SEC. 601. AUDIT PROCEDURES.
(a) Amendments.--Section 586 of title 28, United States
Code, is amended--
(1) in subsection (a), by striking paragraph (6) and
inserting the following:
``(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.
``(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 if those variances occur by reason of higher income or
higher expenses than the statistical norm of the disctrict in
which the schedules were filed; and
``(iv) include procedures for providing, not less
frequently than annually, public information concerning the
aggregate results of the audits referred to in this
subparagraph, 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 may
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 under section 3057 of title 18;
and
``(ii) if advisable, take appropriate action, including
commencing an adversary proceeding to revoke the debtor's
discharge under section 727(d) of title 11.''.
(b) Amendments to Section 521 of Title 11, United States
Code.--Paragraphs (3) and (4) of section 521(a) of title 11,
United States Code, as amended by section 315 of this Act,
are each amended by inserting ``or an auditor appointed under
section 586 of title 28'' after ``serving in the case'' each
place that term appears.
(c) Amendments to Section 727 of Title 11, United States
Code.--Section 727(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) the debtor has failed to explain satisfactorily--
``(A) a material misstatement in an audit performed under
section 586(f) of title 28; or
``(B) a failure to make available for inspection all
necessary accounts, papers, documents, financial records,
files, and any other papers, things, or property belonging to
the debtor that are requested for an audit conducted under
section 586(f).''.
(d) Effective Date.--The amendments made by this section
shall take effect 18 months after the date of enactment of
this Act.
SEC. 602. IMPROVED BANKRUPTCY STATISTICS.
(a) Amendment.--Chapter 6 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 court 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, 1999, 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
under section 2075 and filed by those debtors;
``(B) the total current 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 the cases under each of subclauses (I) and (II),
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 during the 6-year period preceding the date of
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 for 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. 603. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY
DATA.
(a) Amendment.--Chapter 39 of title 28, United States Code,
is amended by inserting after section 589a the following:
``Sec. 589b. Bankruptcy data
``(a) Within a reasonable period of time after the
effective date of this section, The Attorney General of the
United States shall 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
[[Page S2755]]
``(2) periodic reports by debtors in possession or
trustees, as the case may be, in cases under chapter 11 of
title 11.
``(b) Each report 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 practicable access of the public, by--
``(1) physical inspection at 1 or more central filing
locations; and
``(2) electronic access through the Internet or other
appropriate media.
``(c)(1) The information required to be filed in the
reports referred to in subsection (b) shall be information
that is--
``(A) in the best interests of debtors and creditors, and
in the public interest; and
``(B) reasonable and adequate information to evaluate the
efficiency and practicality of the Federal bankruptcy system.
``(2) In issuing rules proposing the forms referred to in
subsection (a), the Attorney General shall strike the best
achievable practical balance between--
``(A) the reasonable needs of the public for information
about the operational results of the Federal bankruptcy
system; and
``(B) economy, simplicity, and lack of undue burden on
persons with a duty to file reports.
``(d)(1) Final reports proposed for adoption by trustees
under chapters 7, 12, and 13 of title 11 shall include with
respect to a case under such title, by appropriate category--
``(A) information about the length of time the case was
pending;
``(B) assets abandoned;
``(C) assets exempted;
``(D) receipts and disbursements of the estate;
``(E) expenses of administration;
``(F) claims asserted;
``(G) claims allowed; and
``(H) distributions to claimants and claims discharged
without payment.
``(2) In cases under chapters 12 and 13 of title 11, final
reports proposed for adoption by trustees shall include--
``(A) the date of confirmation of the plan;
``(B) each modification to the plan; and
``(C) defaults by the debtor in performance under the plan.
``(3) The information described in paragraphs (1) and (2)
shall be in addition to such other matters as are required by
law for a final report or as the Attorney General, in the
discretion of the Attorney General, may propose for a final
report.
``(e)(1) Periodic reports proposed for adoption by trustees
or debtors in possession under chapter 11 of title 11 shall
include--
``(A) information about the standard industry
classification, published by the Department of Commerce, for
the businesses conducted by the debtor;
``(B) the length of time the case has been pending;
``(C) the number of full-time employees--
``(i) as of the date of the order for relief; and
``(ii) at the end of each reporting period since the case
was filed;
``(D) cash receipts, cash disbursements, and profitability
of the debtor for the most recent period and cumulatively
since the date of the order for relief;
``(E) 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;
``(F) all professional fees approved by the court in the
case for the most recent period and cumulatively since the
date of the order for relief (separately reported, 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 that would not have been so
incurred); and
``(G) 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.
``(2) The information described in paragraph (1) shall be
in addition to such other matters as are required by law for
a periodic report or as the Attorney General, in the
discretion of the Attorney General, may propose for a
periodic report.''.
(b) Technical Amendment.--The table of sections for chapter
39 of title 28, United States Code, is amended by adding at
the end the following:
``589b. Bankruptcy data.''.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF
BANKRUPTCY DATA.
It is the sense of Congress that--
(1) it should be the national policy of the United States
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, 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 VII--BANKRUPTCY TAX PROVISIONS
SEC. 701. 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), by inserting ``(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)'' after ``507(a)(1)''; 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), 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
under this section and subject to the requirements of
subsection (e), the following may be paid from property of
the estate which secures a tax lien, or the proceeds of such
property:
``(1) Claims for wages, salaries, and commissions that are
entitled to priority under section 507(a)(3).
``(2) Claims for contributions to an employee benefit plan
entitled to priority under section 507(a)(4).''.
(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. 702. EFFECTIVE NOTICE TO GOVERNMENT.
(a) Effective Notice to Governmental Units.--Section 342 of
title 11, United States Code, as amended by section 315(a) of
this Act, is amended by adding at the end the following:
``(g)(1) 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, applicable rule, other
provision of law, or order of the court, shall identify the
department, agency, or instrumentality through which the
debtor is indebted.
``(2) The debtor shall identify (with information such as a
taxpayer identification number, loan, account or contract
number, or real estate parcel number, if applicable), and
describe the underlying basis for the claim of the
governmental unit.
``(3) If the liability of the debtor 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 that individual, entity,
organization, or name.
``(h) The clerk shall keep and update on a quarterly basis,
in such form and manner as the Director of the Administrative
Office of the United States Courts prescribes, a register in
which a governmental unit may designate or redesignate a
mailing address for service of notice in cases pending in the
district. The clerk shall make such register available to
debtors.''.
(b) Adoption of Rules Providing Notice.--
(1) In general.--Within a reasonable period of time after
the date of enactment of this Act, the Advisory Committee on
Bankruptcy Rules of the Judicial Conference shall propose for
adoption enhanced rules for providing notice to Federal,
State, and local government units that have regulatory
authority over the debtor or that may be creditors in the
debtor's case.
(2) Persons notified.--The rules proposed under paragraph
(1) shall be reasonably calculated to ensure that notice will
reach the representatives of the governmental unit (or
subdivision thereof) who will be the appropriate persons
authorized to act upon the notice.
(3) Rules required.--At a minimum, the rules under
paragraph (1) should require that the debtor--
(A) identify in the schedules and the notice, the
subdivision, agency, or entity with respect to which such
notice should be received;
(B) 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 in any case in which--
(i) the debtor may be a successor in interest; or
(ii) may not be the same entity as the entity that incurred
the debt or obligation; and
(C) identify, in appropriate schedules, served together
with the notice--
(i) the property with respect to which the claim or
regulatory obligation may have arisen, if applicable;
(ii) the nature of such claim or regulatory obligation; and
[[Page S2756]]
(iii) 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:
``(i) 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--
``(1) timely notice was given in a manner reasonably
calculated to satisfy the requirements of this section; and
``(2) either--
``(A) the notice was timely sent to the address provided in
the register maintained by the clerk of the district in which
the case was pending for such purposes; or
``(B) no 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. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
The second sentence of section 505(b) of title 11, United
States Code, is amended by striking ``Unless'' and inserting
``If the request is made substantially in the manner
designated by the governmental unit and unless''.
SEC. 704. RATE OF INTEREST ON TAX CLAIMS.
(a) In General.--Subchapter I of 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 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 secured tax claims, unsecured ad
valorem tax claims, other unsecured tax claims in which
interest is required to be paid under section 726(a)(5), and
administrative tax claims paid under section 503(b)(1), the
rate shall be determined under applicable nonbankruptcy law.
``(2)(A) In the case of any tax claim other than a claim
described in paragraph (1), the minimum rate of interest
shall be a percentage equal to the sum of--
``(i) 3; plus
``(ii) the Federal short-term rate rounded to the nearest
full percent, determined under section 1274(d) of the
Internal Revenue Code of 1986.
``(B) In the case of any claim for Federal income taxes,
the minimum rate of interest shall be subject to any
adjustment that may be required under section 6621(d) of the
Internal Revenue Code of 1986.
``(C) In the case of taxes paid under a confirmed plan or
reorganization under this title, the minimum rate of interest
shall be determined as of the calendar month in which the
plan is confirmed.''.
(b) Clerical Amendment.--The table of sections for chapter
5 of title 11, United States Code, is amended by inserting
after the item relating to section 510 the following:
``511. Rate of interest on tax claims.''.
SEC. 705. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.
Section 507(a)(8)(A) of title 11, United States Code, as
redesignated by section 221 of this Act, is amended--
(1) in clause (i), by inserting before the semicolon at the
end, the following: ``, plus any time during which the stay
of proceedings was in effect in a prior case under this
title, plus 6 months''; and
(2) by striking clause (ii) and inserting the following:
``(ii) assessed within 240 days before the date of the
filing of the petition, exclusive of--
``(I) any time during which an offer in compromise with
respect to that tax, was pending or in effect during that
240-day period, plus 30 days;
``(II) the lesser of--
``(aa) any time during which an installment agreement with
respect to that tax was pending or in effect during that 240-
day period, plus 30 days; or
``(bb) 1 year; and
``(III) any time during which a stay of proceedings against
collections was in effect in a prior case under this title
during that 240-day period; plus 6 months.''.
SEC. 706. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(9)(B) of title 11, United States Code, as
redesignated by section 221 of this Act, is amended by
striking ``assessed'' and inserting ``incurred''.
SEC. 707. CHAPTER 13 DISCHARGE OF FRAUDULENT AND OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code, as
amended by section 228 of this Act, is amended by inserting
``(1),'' after ``paragraph''.
SEC. 708. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, is amended
by adding at the end the following:
``(5) Notwithstanding paragraph (1), the confirmation of a
plan does not discharge a debtor that is a corporation from
any debt for a tax or customs duty with respect to which the
debtor--
``(A) made a fraudulent return; or
``(B) willfully attempted in any manner to evade or defeat
that tax or duty.''.
SEC. 709. 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
inserting before the semicolon at the end the following: ``,
with respect to a tax liability for a taxable period ending
before the order for relief under section 301, 302, or 303''.
(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. 710. 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), by striking ``deferred cash
payments, over a period not exceeding six years after the
date of assessment of such claim,'' and all that follows
through the end of the subparagraph, and inserting ``regular
installment payments--
``(i) of a total value, as of the effective date of the
claim, equal to the allowed amount of such claim in cash, but
in no case with a balloon payment; and
``(ii) beginning not later than the effective date of the
plan and ending on the earlier of--
``(I) the date that is 5 years after the date of the filing
of the petition; or
``(II) the last date payments are to be made under the plan
to unsecured creditors; and''; and
(3) by adding at the end the following:
``(D) with respect to a secured claim which would otherwise
meet the description on an unsecured claim of a governmental
unit under section 507(a)(8), but for the secured status of
that claim, the holder of that claim will receive on account
of that claim, cash payments, in the same manner and over the
same period, as prescribed in subparagraph (C).''.
SEC. 711. 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
in any case in which a purchaser is a purchaser described in
section 6323 of the Internal Revenue Code of 1986, or in any
other similar provision of State or local law;''.
SEC. 712. 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) A tax under subsection (a) shall be paid when due in
the conduct of business unless--
``(1) the tax is a property tax secured by a lien against
property that is abandoned within a reasonable period of time
after the lien attaches, by the trustee of a bankruptcy
estate, under 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 makes 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 the priority
of that tax.''.
(b) Payment of Ad Valorem Taxes Required.--Section
503(b)(1)(B)(i) of title 11, United States Code, is amended
by inserting ``whether secured or unsecured, including
property taxes for which liability is in rem, in personam, or
both,'' before ``except''.
(c) Request for Payment of Administrative Expense Taxes
Eliminated.--Section 503(b)(1) of title 11, United States
Code, is amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) in subparagraph (C), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(D) notwithstanding the requirements of subsection (a), 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 with respect to the
property'' before the period at the end.
SEC. 713. 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
the following: ``on or before the earlier of--
``(A) the date that is 10 days after the mailing to
creditors of the summary of the trustee's final report; or
``(B) the date on which the trustee commences final
distribution under this section;''.
[[Page S2757]]
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.
Section 523(a) of title 11, United States Code, is
amended--
(1) in paragraph (1)(B)--
(A) by inserting ``or equivalent report or notice,'' after
``a return,'';
(B) in clause (i)--
(i) by inserting ``or given'' after ``filed''; and
(ii) by striking ``or'' at the end; and
(C) in clause (ii)--
(i) by inserting ``or given'' after ``filed''; and
(ii) by inserting ``, report, or notice'' after ``return'';
and
(2) by adding at the end the following flush sentences:
``For purposes of this subsection, the term `return' means a
return that satisfies the requirements of applicable
nonbankruptcy law (including applicable filing requirements).
Such term 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 a similar State or local law.''.
SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID
TAXES.
The second sentence of section 505(b) of title 11, United
States Code, as amended by section 703 of this Act, is
amended by inserting ``the estate,'' after
``misrepresentation,''.
SEC. 716. 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 212 of this Act, 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 applicable Federal,
State, and local tax returns as required by section 1309.''.
(b) Additional Time Permitted for Filing Tax Returns.--
(1) In general.--Chapter 13 of title 11, United States
Code, as amended by section 309(c) of this Act, is amended by
adding at the end the following:
``Sec. 1309. Filing of prepetition tax returns
``(a) Not later than the day before the day on which the
first meeting of the creditors is convened under section
341(a), the debtor shall file with appropriate tax
authorities all tax returns for all taxable periods ending
during the 3-year period ending on the date of the filing of
the petition.
``(b)(1) Subject to paragraph (2), 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), the trustee may continue that meeting for a
reasonable period of time to allow the debtor an additional
period of time to file any unfiled returns, but such
additional period of time shall not extend beyond--
``(A) for any return that is past due as of the date of the
filing of the petition, the date that is 120 days after the
date of that first meeting; or
``(B) for any return that is not past due as of the date of
the filing of the petition, the later of--
``(i) the date that is 120 days after the date of that
first meeting; or
``(ii) the date on which the return is due under the last
automatic extension of time for filing that return to which
the debtor is entitled, and for which request has been timely
made, according to applicable nonbankruptcy law.
``(2) Upon notice and hearing, and order entered before the
tolling of any applicable filing period determined under this
subsection, if the debtor demonstrates by clear and
convincing evidence that the failure to file a return as
required under this subsection is attributable to
circumstances beyond the control of the debtor, the court may
extend the filing period established by the trustee under
this subsection for--
``(A) a period of not more than 30 days for returns
described in paragraph (1); and
``(B) a period not to extend after the applicable extended
due date for a return described in paragraph (2).
``(c) For purposes of this section, the term `return'
includes a return prepared pursuant to section 6020 (a) or
(b) of the Internal Revenue Code of 1986, or a similar State
or local law, or written stipulation to a judgment entered by
a nonbankruptcy tribunal.''.
(2) Conforming amendment.--The table of sections for
chapter 13 of title 11, United States Code, is amended by
inserting after the item relating to section 1308 the
following:
``1309. 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 a tax return
under section 1309, on request of a party in interest or the
United States trustee and after notice and a hearing, the
court shall dismiss the case.''.
(d) Timely Filed Claims.--Section 502(b)(9) of title 11,
United States Code, is amended by inserting before the period
at the end the following ``, and except that in a case under
chapter 13 of this title, a claim of a governmental unit for
a tax with respect to a return filed under section 1309 shall
be timely if the claim is filed on or before the date that is
60 days after that return was filed in accordance with
applicable requirements''.
(e) Rules for Objections to Claims and to Confirmation.--It
is the sense of Congress that the Advisory Committee on
Bankruptcy Rules of the Judicial Conference should, within a
reasonable period of time after the date of 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 the date that is 60 days after the date on which
the debtor files all tax returns required under sections 1309
and 1325(a)(7) of title 11, United States Code; and
(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 with respect to which a return is required
to be filed under section 1309 of title 11, United States
Code, shall be filed until such return has been filed as
required.
SEC. 717. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a)(1) of title 11, United States Code, is
amended--
(1) by inserting ``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,'' after ``records''; and
(2) by striking ``a hypothetical reasonable investor
typical of holders of claims or interests'' and inserting
``such a hypothetical investor''.
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended
by section 402 of this Act, is amended--
(1) in paragraph (25), by striking ``or'' at the end;
(2) in paragraph (26), by striking the period at the end
and inserting ``; or''; and
(3) by inserting after paragraph (26) the following:
``(27) under subsection (a), of the setoff of an income tax
refund, by a governmental unit, with respect to a taxable
period that ended before the order for relief against an
income tax liability for a taxable period that also ended
before the order for relief, unless--
``(A) before that setoff, an action to determine the amount
or legality of that tax liability under section 505(a) was
commenced; or
``(B) in any case in which 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, in which
case the governmental unit may hold the refund pending the
resolution of the action.''.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 801. 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.
[[Page S2758]]
``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 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 if--
``(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 of 1970 (84 Stat. 1636 et
seq.), 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 under other
provisions of this chapter, the court, upon recognition of a
foreign proceeding, may 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 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 shall have 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, 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 Federal or State 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 law in
effect on the date of enactment of this chapter as to the
priority of claims under section 507 or 726, except that the
claim of a foreign creditor under section 507 or 726 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.
[[Page S2759]]
``(2)(A) Subsection (a) and paragraph (1) do not change or
codify law in effect on the date of enactment of this chapter
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
``After the the petition for recognition of the foreign
proceeding is filed, 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) Beginning on the date on which a petition for
recognition is filed and ending on the date on which 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 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 the actions or proceedings have not been stayed under
section 1520(a);
``(2) staying execution against the debtor's assets to the
extent the execution 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
that 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).
[[Page S2760]]
``(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, if 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), to conditions that the court considers to
be 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 the relief referred to in subsection (b).
``(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) In any case in which 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), 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
``In any case in which 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) If 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) If 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.
``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. 802. 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
chapter 7, 11, or 12, to debtors in possession under chapter
11 or 12, and to debtors under chapter 9 who are authorized
to act under section 1505.''.
(b) Definitions.--Paragraphs (23) and (24) of section 101
of title 11, United States Code, are amended to read as
follows:
[[Page S2761]]
``(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''.
SEC. 803. 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.''.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
SEC. 901. 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 striking paragraph (47) and inserting the following:
``(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 section 3 of the Securities Exchange Act of
1934), mortgage loan, interest in a mortgage related security
or mortgage loan, eligible bankers' acceptance, or qualified
foreign government security (defined for purposes of this
paragraph to mean 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); or
``(II) a 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 that is
not later than 1 year after the date of 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); or
``(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;'';
(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 striking paragraph (53B) and inserting the
following:
``(53B) `swap agreement'--
``(A) means--
``(i) 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;
``(ii) an agreement or transaction that is similar to an
agreement or transaction referred to in clause (i) 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;
``(iii) a combination of agreements or transactions
referred to in clauses (i) and (ii);
``(iv) an option to enter into an agreement or transaction
referred to in this subparagraph;
``(v) a master netting agreement that provides for an
agreement or transaction referred to in clause (i), (ii),
(iii), or (iv), 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 clause, but only with respect to each
agreement or transaction referred to in any such clause that
is under such master netting agreement; except that
``(B) the definition under subparagraph (A) 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) in section 741, by striking paragraph (7) and inserting
the following:
``(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;
[[Page S2762]]
``(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);
(B) in subparagraph (E), by striking the period at the end
and inserting ``; and''; and
(C) 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 striking paragraph (22) and inserting the following:
``(22) `financial institution' means--
``(A)(i) 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
``(ii) if 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, 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) with the
debtor or any other entity (other than an affiliate) of a
total gross dollar value of not less than $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 not less than $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 striking paragraph (26) and inserting the following:
``(26) `forward contract merchant' means a Federal reserve
bank, or an entity, the business of which 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, or
any similar good, article, service, right, or interest that
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'--
``(A) 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; except
that
``(B) 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 section 718 of this Act, 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 striking paragraph (17) and inserting the following:
``(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 (26), by striking ``or'' at the end;
(E) in paragraph (27), by striking the period at the end
and inserting ``; or''; and
(F) by inserting after paragraph (27) the following:
``(28) 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, as amended by section 432(2) of this Act, is amended by
adding at the end the following:
``(l) 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 (104 Stat. 267 et seq.))--
(A) by striking ``under a swap agreement''; and
(B) by striking ``in connection with a swap agreement'' and
inserting ``under or in connection with any swap agreement'';
and
(2) by inserting before subsection (i) (as redesignated by
section 407 of this Act) the following new subsection:
``(h) Notwithstanding sections 544, 545, 547, 548(a)(2)(B),
and 548(b), 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 that 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)).''.
[[Page S2763]]
(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 at the end
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 that 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 striking the section heading and inserting the
following:
``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 striking the section heading and inserting the
following:
``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 striking the section heading and inserting the
following:
``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 striking the section heading and inserting
following:
``Sec. 560. Contractual right to liquidate, terminate, or
accelerate a swap agreement'';
(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''.
(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) 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)(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 that the party has no
positive net equity in the commodity accounts at the debtor,
as calculated under subchapter IV; and
``(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 referred to in subsection (a).
``(c) 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) 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--
``(1) shall not be stayed or otherwise limited by--
``(A) operation of any provision of this title; or
``(B) order of a court in any case under this title;
``(2) shall limit avoidance powers to the same extent as in
a proceeding under chapter 7 or 11; and
``(3) shall not be limited based on the presence or absence
of assets of the debtor in the United States.''.
(m) 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.''.
(n) 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.''.
(o) 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)'' 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,''.
(p) 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''.
(q) Conforming Amendments.--Title 11 of the United States
Code is amended--
(1) in the table of sections for chapter 5--
(A) by striking the items relating to sections 555 and 556
and inserting the following:
``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.'';
(B) by striking the items relating to sections 559 and 560
and inserting the following:
``559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement.
``560. Contractual right to liquidate, terminate, or accelerate a swap
agreement.'';
[[Page S2764]]
and
(C) by adding after the item relating to section 560 the
following:
``561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts.'';
and
(2) in the table of sections for 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. 902. DAMAGE MEASURE.
(a) In General.--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), forward contract,
commodity contract (as defined in section 761) repurchase
agreement, or master netting agreement under section 365(a),
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
(2) in the table of sections for 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 inserting ``(1)'' after ``(g)''; and
(2) by adding at the end the following:
``(2) A claim for damages calculated in accordance with
section 561 shall be allowed under subsection (a), (b), or
(c) of this section, or disallowed under subsection (d) or
(e) of this section, as if such claim had arisen before the
date of the filing of the petition.''.
SEC. 903. 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 that 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) For purposes of this section, the following
definitions shall apply:
``(1) 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) 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) 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) 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) The term `transferred' means the debtor, under 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. 904. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--This title shall take effect on the
date of enactment of this Act.
(b) Application of Amendments.--The amendments made by this
title 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 X--PROTECTION OF FAMILY FARMERS
SEC. 1001. REENACTMENT OF CHAPTER 12.
(a) Reenactment.--
(1) In general.--Chapter 12 of title 11, United States
Code, as reenacted by section 149 of division C of the
Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999 (Public Law 105-277), and amended by
this Act, is reenacted.
(2) Effective Date.--Subsection (a) shall take effect on
April 1, 1999.
(b) Conforming Amendment.--Section 302 of the Bankruptcy,
Judges, United States Trustees, and Family Farmer Bankruptcy
Act of 1986 (28 U.S.C. 581 note) is amended by striking
subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, is amended
by adding at the end the following:
``(4) The dollar amount in section 101(18) shall be
adjusted at the same times and in the same manner as the
dollar amounts in paragraph (1) of this subsection, beginning
with the adjustment to be made on April 1, 2001.''.
SEC. 1003. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND
SPOUSE RECEIVE OVER 50 PERCENT OF INCOME FROM
FARMING OPERATION IN YEAR PRIOR TO BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is
amended by striking ``the taxable year preceding the taxable
year'' and inserting ``at least 1 of the 3 calendar years
preceding the year''.
SEC. 1004. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.
(a) Contents of Plan.--Section 1222(a)(2) of title 11,
United States Code, is amended to read as follows:
``(2) provide for the full payment, in deferred cash
payments, of all claims entitled to priority under section
507, unless--
``(A) the claim is a claim owed to a governmental unit that
arises as a result of the sale, transfer, exchange, or other
disposition of any farm asset used in the debtor's farming
operation, in which case the claim shall be treated as an
unsecured claim that is not entitled to priority under
section 507, but the debt shall be treated in such manner
only if the debtor receives a discharge; or
``(B) the holder of a particular claim agrees to a
different treatment of that claim; and''.
(b) Special Notice Provisions.--Section 1231(d) of title
11, United States Code, is amended by striking ``a State or
local governmental unit'' and inserting ``any governmental
unit''.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) Health Care Business Defined.--Section 101 of title 11,
United States Code, as amended by section 1004(a) of this
Act, is amended--
(1) by redesignating paragraph (27A) as paragraph (27C);
and
(2) inserting after paragraph (27) the following:
``(27A) `health care business'--
``(A) means any public or private entity (without regard to
whether that entity is organized for profit or not for
profit) that is primarily engaged in offering to the general
public facilities and services for--
``(i) the diagnosis or treatment of injury, deformity, or
disease; and
``(ii) surgical, drug treatment, psychiatric or obstetric
care; and
``(B) includes--
``(i) any--
``(I) general or specialized hospital;
``(II) ancillary ambulatory, emergency, or surgical
treatment facility;
``(III) hospice;
``(IV) health maintenance organization;
``(V) home health agency; and
``(VI) other health care institution that is similar to an
entity referred to in subclause (I), (II), (III), (IV), or
(V); and
``(ii) any long-term care facility, including any--
``(I) skilled nursing facility;
``(II) intermediate care facility;
[[Page S2765]]
``(III) assisted living facility;
``(IV) home for the aged;
``(V) domicilary care facility; and
``(VI) health care institution that is related to a
facility referred to in subclause (I), (II), (III), (IV), or
(V), if that institution is primarily engaged in offering
room, board, laundry, or personal assistance with activities
of daily living and incidentals to activities of daily
living;''.
(b) Health Maintenance Organization Defined.--Section 101
of title 11, United States Code, as amended by subsection
(a), is amended by inserting after paragraph (27A) the
following:
``(27B) `health maintenance organization' means any person
that undertakes to provide or arrange for basic health care
services through an organized system that--
``(A)(i) combines the delivery and financing of health care
to enrollees; and
``(ii)(I) provides--
``(aa) physician services directly through physicians or 1
or more groups of physicians; and
``(bb) basic health care services directly or under a
contractual arrangement; and
``(II) if reasonable and appropriate, provides physician
services and basic health care services through arrangements
other than the arrangements referred to in clause (i); and
``(B) includes any organization described in subparagraph
(A) that provides, or arranges for, health care services on a
prepayment or other financial basis;''.
(c) Patient.--Section 101 of title 11, United States Code,
as amended by subsection (b), is amended by inserting after
paragraph (40) the following:
``(40A) `patient' means any person who obtains or receives
services from a health care business;''.
(d) Patient Records.--Section 101 of title 11, United
States Code, as amended by subsection (c), is amended by
inserting after paragraph (40A) the following:
``(40B) `patient records' means any written document
relating to a patient or record recorded in a magnetic,
optical, or other form of electronic medium;''.
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) In General.--Subchapter III of chapter 3 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 351. Disposal of patient records
``If a health care business commences a case under chapter
7, 9, or 11, and the trustee does not have a sufficient
amount of funds to pay for the storage of patient records in
the manner required under applicable Federal or State law,
the following requirements shall apply:
``(1) The trustee shall mail, by certified mail, a written
request to each appropriate Federal or State agency to
request permission from that agency to deposit the patient
records with that agency.
``(2) If no appropriate Federal or State agency agrees to
permit the deposit of patient records referred to in
paragraph (1) by the date that is 60 days after the trustee
mails a written request under that paragraph, the trustee
shall--
``(A) publish notice, in 1 or more appropriate newspapers,
that if those patient records are not claimed by the patient
or an insurance provider (if applicable law permits the
insurance provider to make that claim) by the date that is 60
days after the date of that notification, the trustee will
destroy the patient records; and
``(B) during the 60-day period described in subparagraph
(A), the trustee shall attempt to notify directly each
patient that is the subject of the patient records concerning
the patient records by mailing to the last known address of
that patient an appropriate notice regarding the claiming or
disposing of patient records.
``(3) If, after providing the notification under paragraph
(2), patient records are not claimed during the 60-day period
described in paragraph (2)(A) or in any case in which a
notice is mailed under paragraph (2)(B), during the 90-day
period beginning on the date on which the notice is mailed,
by a patient or insurance provider in accordance with that
paragraph, the trustee shall destroy those records by--
``(A) if the records are written, shredding or burning the
records; or
``(B) if the records are magnetic, optical, or other
electronic records, by otherwise destroying those records so
that those records cannot be retrieved.''.
(b) Clerical Amendment.--The chapter analysis for chapter 3
of title 11, United States Code, is amended by inserting
after the item relating to section 350 the following:
``351. Disposal of patient records.''.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING
A HEALTH CARE BUSINESS.
Section 503(b) of title 11, United States Code, is
amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(7) the actual, necessary costs and expenses of closing a
health care business incurred by a trustee, including any
cost or expense incurred--
``(A) in disposing of patient records in accordance with
section 351; or
``(B) in connection with transferring patients from the
health care business that is in the process of being closed
to another health care business.''.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT
ADVOCATE.
(a) In General.--
(1) Appointment of ombudsman.--Subchapter II of chapter 3
of title 11, United States Code, is amended by inserting
after section 331 the following:
``Sec. 332. Appointment of ombudsman
``(a) Not later than 30 days after a case is commenced by a
health care business under chapter 7, 9, or 11, the court
shall appoint an ombudsman to represent the interests of the
patients of the health care business.
``(b) An ombudsman appointed under subsection (a) shall--
``(1) monitor the quality of patient care, to the extent
necessary under the circumstances, including reviewing
records and interviewing patients and physicians;
``(2) not later than 60 days after the date of appointment,
and not less frequently than every 60 days thereafter, report
to the court, at a hearing or in writing, regarding the
quality of patient care at the health care business involved;
and
``(3) if the ombudsman determines that the quality of
patient care is declining significantly or is otherwise being
materially compromised, notify the court by motion or written
report, with notice to appropriate parties in interest,
immediately upon making that determination.
``(c) An ombudsman shall maintain any information obtained
by the ombudsman under this section that relates to patients
(including information relating to patient records) as
confidential information.''.
(2) Clerical amendment.--The chapter analysis for chapter 3
of title 11, United States Code, is amended by inserting
after the item relating to section 331 the following:
``332. Appointment of ombudsman.''.
(b) Compensation of Ombudsman.--Section 330(a)(1) of title
11, United States Code, is amended--
(1) in the matter proceeding subparagraph (A), by inserting
``an ombudsman appointed under section 331, or'' before ``a
professional person''; and
(2) in subparagraph (A), by inserting ``ombudsman,'' before
``professional person''.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER
PATIENTS.
(a) In General.--Section 704(a) of title 11, United States
Code, as amended by section 219 of this Act, is amended--
(1) in paragraph (9), by striking ``and'' at the end;
(2) in paragraph (10), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(11) use all reasonable and best efforts to transfer
patients from a health care business that is in the process
of being closed to an appropriate health care business that--
``(A) is in the vicinity of the health care business that
is closing;
``(B) provides the patient with services that are
substantially similar to those provided by the health care
business that is in the process of being closed; and
``(C) maintains a reasonable quality of care.''.
(b) Conforming Amendment.--Section 1106(a)(1) of title 11,
United States Code, is amended by striking ``and 704(9)'' and
inserting ``704(9), and 704(10)''.
TITLE XII--TECHNICAL AMENDMENTS
SEC. 1201. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by
section 1101 of this Act, 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 striking paragraph (54) and inserting the following:
``(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. 1202. 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. 1203. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is
amended by striking ``922'' and all
[[Page S2766]]
that follows through ``or'', and inserting ``922, 1201, or''.
SEC. 1204. 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. 1205. 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. 1206. 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. 1207. 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. 1208. 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. 1209. 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. 1210. PRIORITIES.
Section 507(a) of title 11, United States Code, as amended
by sections 211 and 229 of this Act, is amended--
(1) in paragraph (4)(B), by striking the semicolon at the
end and inserting a period; and
(2) in paragraph (8), by inserting ``unsecured'' after
``allowed''.
SEC. 1211. EXEMPTIONS.
Section 522(g)(2) of title 11, United States Code, as
amended by section 311 of this Act, is amended by striking
``subsection (f)(2)'' and inserting ``subsection (f)(1)(B)''.
SEC. 1212. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as amended by
section 229 of this Act, is amended--
(1) 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);
(2) in subsection (a)--
(A) in paragraph (3), by striking ``or (6)'' each place it
appears and inserting ``(6), or (15)'';
(B) in paragraph (9), by striking ``motor vehicle or
vessel'' and inserting ``motor vehicle, vessel, or
aircraft''; and
(C) in paragraph (15), as so redesignated by paragraph (1)
of this subsection, by inserting ``to a spouse, former
spouse, or child of the debtor and'' after ``(15)''; and
(3) in subsection (e), by striking ``a insured'' and
inserting ``an insured''.
SEC. 1213. 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), or that''.
SEC. 1214. 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. 1215. 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. 1216. PREFERENCES.
(a) In General.--Section 547 of title 11, United States
Code, is amended--
(1) in subsection (b), by striking ``subsection (c)'' and
inserting ``subsections (c) and (i)''; and
(2) by adding at the end the following:
``(i) 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.''.
(b) Applicability.--The amendments made by this section
shall apply to any case that pending or commenced on or after
the date of enactment of this Act.
SEC. 1217. 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. 1218. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended
by striking ``1009,''.
SEC. 1219. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, as amended
by section 901(k) of this Act, is amended by inserting
``1123(d),'' after ``1123(b),''.
SEC. 1220. 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. 1221. 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. 1222. 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. 1223. 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. 1224. 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. 1225. TRANSFERS MADE BY NONPROFIT CHARITABLE
CORPORATIONS.
(a) Sale of Property of Estate.--Section 363(d) of title
11, United States Code, is amended 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.''.
(b) Confirmation of Plan for Reorganization.--Section
1129(a) of title 11, United States Code, as amended by
section 212 of this Act, 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:
``(f) 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
construed 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. 1226. 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. 1227. 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''.
SEC. 1228. BANKRUPTCY JUDGESHIPS.
(a) Short Title.--This section may be cited as the
``Bankruptcy Judgeship Act of 1999''.
(b) Temporary Judgeships.--
(1) Appointments.--The following judgeship positions shall
be filled in the manner
[[Page S2767]]
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 positions.
(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:
``(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).''.
TITLE XIII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 1301. 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 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, United States Code, before the effective date of
this Act.
____
Summary of Major Differences Between the Grassley/Torricelli Bankruptcy
Reform Bill and the H.R. 3150 Conference Report
Means Test
The new Senate bill gives bankruptcy judges greater
discretion in considering whether to transfer a debtor from
Chapter 7 to Chapter 13.
The new Senate bill requires only a showing of ``special
circumstances,'' rather than ``extraordinary circumstances,''
for Chapter 7 debtors with apparent repayment ability to
avoid being transferred to Chapter 13.
A new Senate bill raises the minimum dollar amount from
$5,000 to $15,000, with the effect that debtors with a
marginal ability to repay won't be swept up by the means
test.
Consumer Protections
The new Senate bill requires the Attorney General and the
FBI Director to designate one prosecutor and one agent in
every district to investigate reaffirmation practices which
violate current federal criminal laws, including the criminal
laws under which Sears was prosecuted.
The new Senate bill specifically authorizes state attorneys
general to enforce federal criminal laws against abusive
reaffirmations, again including the criminal laws under which
Sears was prosecuted.
The new Senate bill specifically authorizes state attorneys
general to enforce state laws regarding unfair trade
practices against creditors who deceive debtors into
reaffirmation agreements, including the state laws under
which Sears was prosecuted.
The new Senate bill drops a provision barring class action
lawsuits for reaffirmation violations.
The new Senate bill reinserts a provision making it a
violation of the automatic stay to threaten to file motions
in order to coerce reaffirmations.
The new Senate bill reinserts a provision penalizing
creditors who fail to acknowledge payments received in
Chapter 13 plans and, thereafter, seek a ``double payment.''
Greater Protections for Child Support
The new Senate bill requires bankruptcy trustees to notify
appropriate state agencies of a debtor's location and
specific address, if the debtor owes child support. This
effectively turns bankruptcy courts into locator services to
help track down ``deadbeat parents.''
The new Senate bill requires bankruptcy trustees to notify
child support claimants of their right to enforce payment
through an appropriate state agency.
The new Senate bill permits state agencies which enforce
payment of child support obligations to request that
creditors who hold reaffirmed or non-discharged debts to
provide the last known address and telephone number of the
debtor. Again, this effectively turns bankruptcy courts into
locator services which will help to track down ``deadbeat
parents.''
The new Senate bill provides that debts incurred to pay
non-dischargeable debts will continue to be dischargeable if
the debtor owes child support or alimony.
Fewer Non-Dischargeable Debts
The new Senate bill raises the dollar limits on cash
advances on the eve of bankruptcy, presumed non-dischargeable
from $250 to $750.
The new Senate bill shortens the time during which
purchases and cash advances are presumed non-dischargeable
from 90 days to 70 days.
Mr. BIDEN. Mr. President, I am pleased to join today with
Senator Grassley and Senator Torricelli, along with our colleague from
the Judiciary Committee, Senator Sessions, to introduce legislation to
reform our nation's bankruptcy laws.
In a time of rising incomes, historic levels of job creation, and
strong economic growth, America has seen an unexpected rise in the
number of personal bankruptcies. Last year, 1.4 million Americans filed
for personal bankruptcy, and we expect that number to grow again this
year, as it has for the last 4 years. This means more people are filing
for bankruptcy now than during the worst years of job losses in the
1980's.
Bankruptcy laws give Americans a very special kind of protection from
the worst form of financial distress. As a nation of immigrants, our
country is
[[Page S2768]]
the very embodiment of the idea of a fresh start. Bankruptcy protection
was considered so important that it was among the specific powers
granted to Congress in our Constitution. That is why we provide in law
that no one should have to shoulder an unsustainable burden of debt, a
burden that can hurt us all by threatening the weakest links in our
society.
But at the same time, Mr. President, our nation is founded on the
idea of personal responsibility, the only foundation that can sustain
and protect our freedom. Until recently, bankruptcy was considered a
stain on one's personal reputation, an admission of failure, something
to be avoided at all costs. While we may sympathize with the special
circumstances that can throw an individual into unexpected hardship,
Americans expect that those who have the resources must meet their
financial obligations.
But the explosion in the number of personal bankruptcies, in a time
of economic prosperity, raises serious questions. Mr. President, every
time one of us fails to pay a legitimate debt, the rest of us pay a
little more, because of the higher interest rates lenders must charge
to cover their loses. When the circumstances are unavoidable, and when
it is clear that a fresh start is deserved, bankruptcy must be there
for those who need it. But when those who have the ability to pay use
the bankruptcy system to walk away from their debts, something is
wrong.
It is now clear to most of us that our bankruptcy system--and the
laws that guide it--are in serious need of reform. Last year, in the
Senate, we passed a bipartisan bill by the nearly unanimous vote of 97
to 1 to fix the problems in our bankruptcy laws. While that proposal
did not become law, we reached agreement that bankruptcy reform--done
the right way--is something we all can support.
Working closely with his new ranking member, Senator Torricelli,
Senator Grassley has once again shown us the leadership on this issue
that he provided last year. I believe that we have built a foundation
in this bill for a reasonable approach, one that restores some of the
balance that has been lost in recent years. To that end, this
legislation assures that those who have the ability to pay will
continue to meet their obligations, and that bankruptcy is not seen as
a financial planning device, but the last resort for the most
extraordinary circumstances.
At the same time, again with the help of Senator Torricelli we have
gone a long way toward addressing the honest concerns that many of our
colleagues have expressed about the needs of those, like single parents
and those who receive child support, who deserve greater protection.
This is a tough balance to strike, and I will continue to work with
Senator Grassley, Senator Torricellie, and Senator Sessions, and with
our colleagues on the Judiciary Committee, to listen to the concerns of
other Senators, to achieve the kind of consensus that we found here in
the Senate last year.
______
Mr. Mr. ROBERTS (for himself and Mr. Brownback):
S. 626. A bill to provide from unfair interest and penalties on
refunds retroactively ordered by the Federal Energy Regulatory
Commission; to the Committee on Energy and Natural Resources.
KANSAS NATURAL GAS INDUSTRY
Mr. ROBERTS. Mr. President, I rise today to introduce a bill
of critical importance to the natural gas industry in Kansas.
Natural gas production is an important industry in Kansas, paying
good wages to hard working Kansans and taxes to support county and
state tax rolls. Kansas is a national leader in natural gas production,
and we pipe our product all over the nation. It is an affordable,
abundant and clean energy source. This bill will ensure that we can
continue to produce this natural resource in Kansas.
This issue is complex, full of legalities and arcane federal policy.
But I believe the crux of the matter will reverberate throughout the
Congress.
The problem before us arises out of the system of federal price
controls on natural gas. In 1974, natural gas producers were given
permission to exceed the national ceiling rates for gas by the cost of
any state or federal tax on production. In Kansas, one such tax was the
ad valorem tax. In 1974, the Federal Power Commission issued Opinion
699-D, finding that the Kansas ad valorem tax was a production tax
eligible for recovery. Kansas gas producers, like producers in other
states, were allowed to exceed the national rates by the costs of a
local production tax.
In 1978, Congress passed the Natural Gas Policy Act. That statute
continued the practice of price controls on natural gas, but also
codified prior practices that allowed natural gas producers to exceed
price ceilings by the costs of production taxes. The newly created
Federal Energy Regulatory Commission, the federal body charged with
implementing federal policies in this field, continued the practice of
allowing Kansas producers to recover the costs of the Kansas ad valorem
tax. Business continued as it had since 1974.
This practice of adding on the Kansas ad valorem tax was challenged
in 1983. The FERC responded with opinions in 1986 and again in 1987,
stating that it is ``clear, beyond question,'' that the Kansas ad
valorem tax is a tax on production and therefore, under law, eligible
for recovery. Kansas producers had clear authority to recover the costs
of the ad valorem tax.
What happened next is inexplicable. In 1988, the prior FERC decisions
on the Kansas ad valorem tax were challenged in court. The D.C. Circuit
Court remanded the issue to the FERC. In 1993, five years later, the
FERC did the unthinkable. They overturned all their previous rulings in
this matter and required Kansas natural gas producers to refund, plus
interest, all ad valorem tax monies collected above the gas price
ceilings from 1988 forward. The FERC wisely chose 1988 as the
collection date based on the D.C. Circuit's decision date.
Unfortunately, upon challenge in 1996, the D.C. Circuit extended the
refund period to 1983. The result is an estimated $340 million
liability due by every producer operating between the years 1983 and
1988.
What has occurred is an atrocious miscarriage of justice. Kansas
natural gas producers, who in their business practices relied on the
rules and followed the orders of the FERC, were subsequently told they
had been breaking federal law since 1974, or for 19 years. They were
then retroactively found to be liable for all of the collected tax
funds back to 1983. In layman's terms, these producers are being held
liable for following the orders of the FERC.
The FERC did not carry out its duties in a vacuum. Section 110 of the
Natural Gas Policy Act clearly stated that production taxes could be
added to the price of gas, even if the add-on exceeded national price
ceilings. The NGPA report language went so far as to spell out what
kind of taxes are production taxes, stating ``The term ``State
severance tax'' is intended to be construed broadly. It includes any
tax imposed upon mineral or natural resource production including an ad
valorem tax. . .'' It is evident to me, and I hope to anyone reading
this, that Congress included the words ``ad valorem'' tax for an
explicit reason--because Congress intended that ad valorem taxes were
to be included in the list of taxes eligible for recovery. I have all
of these documents in my possession, and would be pleased to provide
any of this information to my colleagues. Mr. President, we must remedy
this situation. Before us are the citizens of Kansas, the natural gas
producers, who for 19 years dutifully ran their businesses in
compliance with federal law, and strictly followed the edicts of the
Federal Energy Regulatory Commission. They had a right, indeed a
responsibility, to rely on the FERC's orders. Today, they are being
punished for following these very orders. The FERC's incompetence has
caused these honest citizens to be treated as criminals. However, it is
the incompetence of the FERC that is criminal.
Mr. President, I rise today to re-introduce legislation from the last
Congress. This bill would repeal the most unjust aspect of this order.
Requiring producers to refund these recovered taxes is bad enough.
However, assessing an interest penalty on this refund order extends
beyond the bounds of decency and fairness. The interest portion
represents roughly two-thirds of the estimated $340 million cost to
Kansas producers. While the FERC had the
[[Page S2769]]
opportunity to waive the interest portion, they refused to do so. This
legislation is made necessary by the FERC's refusal to take any actions
to mitigate this harsh, retroactive and unjust decision.
Mr. President, I will do everything in my power to push this issue
through to resolution. I will continue my efforts to encourage the
Senate Energy and Natural Resources Committee to hold hearings on this
issue, so they may hear firsthand of the events that lead us where we
find ourselves today. I want Congress to hear from the citizens of my
state, the young and the old, those in business and those retired,
those who have money, and those living on a fixed income, all of whom
the FERC has ordered must pay refunds often ranging into the tens of
thousands of dollars.
I also believe it is time for Congress to review the independence and
power delegated to the Federal Energy Regulatory Commission. They are
unaccountable for their actions, unwilling to accept responsibility and
unmoved by the pleas of the stakeholders in this process. Congress
entrusted oversight and administration of federal gas policy to the
FERC. In this case, the FERC has failed to properly administer the law,
and has exercised its authority in an egregious and inequitable manner
inconsistent with congressional intent. Congress has a clear
responsibility to intervene in this case.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 626
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. LIABILITY OF CERTAIN NATURAL GAS PRODUCERS.
The Natural Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.)
is amended by adding at the end the following:
``SEC. 603. LIABILITY OF CERTAIN NATURAL GAS PRODUCERS.
``If the Commission orders any refund of any rate or charge
made, demanded, or received for reimbursement of State ad
valorem taxes in connection with the sale of natural gas
before 1989, the refund shall be ordered to be made without
interest or penalty of any kind.''.
______
By Mr. ROCKFELLER (for himself, Ms. Collins, Mr. Cochran, Mr.
Conrad, Mr. Wyden, and Mr. Jeffords):
S. 628. A bill to amend titles XVIII and XIX of the Social Security
Act to expand and clarify the requirements regarding advance directives
in order to ensure that an individual's health care decisions are
complied with, and for other purposes; to the Committee on Finance.
ADVANCE PLANNING AND COMPASSIONATE CARE ACT OF 1999
Mr. ROCKEFELLER. Mr. President, I am pleased to be introducing
the ``Advance Planning and Compassionate Care Act of 1999'' with my
colleague from Maine, Senator Collins. We introduce this legislation to
ask Congress to take action that responds directly and humanely to the
needs of the elderly and others during some of their most difficult and
traumatic times of their lives. The time I refer to is the end-of-life.
Our perceptions of illness, end-of-life care, and death are changing
in response to advances in medical technology, a shift from treating
acute care illnesses to managing chronic care conditions, improvements
in palliative care, and a greater respect for patient involvement and
autonomy in end-of-life decisions.
Patients want to maintain a sense of control of their lives
throughout their last days. But studies show that tremendous variation
exists in the medical care that Medicare beneficiaries receive in the
last few months of their lives. This sort of analysis highlights that
patient preferences have little to do with the sort of care patients
receive in their final months of life. Where you live determines the
sort of medical care you will receive more so than what you might
prefer. Our bill addresses this issue by calling for an evaluation of
current standards of care and promoting better communication between
health care providers and their patients.
Unfortunately, while people do worry about end-of-life issues, the
truth is that patients, families, and physicians have difficulty
talking about them. People have an endless list of reasons for not
talking about end-of-life care, for not making decisions to prepare for
it. Some are afraid of jinxing themselves by planning their end-of-life
care, and many have faith that their families will know the right thing
to do when the time comes.
Not talking about death does not stop it from occurring. We all know
it is a natural, inevitable part of life. But by not talking about end-
of-life care, we hamper our ability to learn about the options that are
available to relieve suffering, promote personal choice, and obtain
greater care and comfort in our final months.
End-of-life care is a major--and growing--issue in the future of
health care. Unfortunately, in recent years, debates on end-of-life
care have focused almost exclusively on the subject of physician-
assisted suicide. Mr. President, I have spent considerable time delving
into the concerns and dilemmas that face patients, their family members
and their physicians when confronted with death or the possibility of
dying. In almost all such difficult situations, people are not thinking
about physician-assisted suicide. The needs and dilemmas that confront
them have much more to do with the kind of care and information they
need desperately.
The legislation we are introducing today builds on bipartisan
legislation enacted in 1990, called the Patient Self-Determination Act.
As a result of that bill, hospitals, skilled nursing facilities, home
health agencies, hospice programs, and HMO's participating in the
Medicaid and Medicare programs must provide every adult receiving
medical care with written information concerning patient involvement in
their own treatment decisions. The health care institutions must also
document in the medical record whether the patient has an advance
directive. In addition, States were required to write descriptions of
their State laws concerning advance directives.
The first section of the Advance Planning and Compassionate Care Act
instructs the Department of Health and Human Services to develop
appropriate quality measures and models of care for persons with
chronic, debilitating illnesses, including the very frail elderly who
will comprise an increasing number of Medicare beneficiaries.
The second part of our bill directs the Secretary of Health and Human
Services to advise Congress on an approach to adopting the provisions
of the Uniform Health Care Decisions Act for Medicare beneficiaries.
The Uniform Health Care Decisions Act was developed by the Uniform Law
Commissioners, a group with representation from all States that has
been in existence for over 100 years. The Uniform Health Care Decisions
Act includes all the important components of model advance directive
legislation. A great deal of legal effort went into its development,
with input by all the States and approval by the American Bar
Association. Medicare beneficiaries deserve a uniform approach to
advance directives, especially since many move from one State to
another while in the Medicare Program. The tremendous variation in
State laws that currently exists only adds to the confusion of health
care professionals and their patients.
The third section strengthens the previously enacted Patient Self
Determination Act in the following ways:
First, it requires that every Medicare beneficiary have the
opportunity to discuss health care decision-making issues with an
appropriately trained professional, when he or she makes a request.
This measure would help make sure that patients and their families have
the ability to discuss and address concerns and issues relating to
their care, including end-of-life care, with a trained professional.
Many health care institutions already have teams of providers to
address difficult health care decisions and some even mediate among
patients, families, and providers. In smaller institutions, social
workers, chaplains, nurses or other trained professionals could be made
available for consultation.
Second, our bill requires that a person's advance directive be placed
in a prominent part of the medical record. Often advance directives
cannot even be found in the medical record, making
[[Page S2770]]
it more difficult for providers to respect patients' wishes. It is
essential that an individual's advance directive be readily available
and visible to anyone involved in their health care.
Third, it will assure that an advance directive valid in one State
will be valid in another State. At present, portability of advance
directives from State to State is not assured. Such portability can
only be guaranteed through Federal legislation.
The fourth part of this legislation would encourage the development
of models for end-of-life care for Medicare beneficiaries who do not
qualify for the Medicare hospice benefit but still have chronic,
debilitating and ultimately fatal illnesses. The tremendous advances in
medicine and medical technology over the past 30 to 50 years have
resulted in a greatly lengthened life expectancy for Americans, as well
as vastly improved functioning and quality of life for the elderly and
those with chronic disease. Many of these advances have been made
possible by federally financed health care programs, such as the
Medicare Program that assures access to high quality health care for
all elderly Americans. Medicare has also funded much of the development
of technology and a highly skilled physician workforce through support
of medical education and academic medical centers. These advances have
also created major dilemmas in addressing terminal or potentially
terminal disease, as well as a sense of loss of control by many with
terminal illness.
Mr. President, I am learning more and more about the importance of
educating health care providers and the public that chronic,
debilitating, terminal disease need not be associated with pain, major
discomfort, and loss of control. We can control pain and treat
depression, as well as the other causes of suffering during the dying
process. We must now apply this knowledge to assure all Americans
appropriate end-of-life care. And to make sure that Medicare
beneficiaries are able to receive the most effective medicine to
control their pain, Medicare's coverage rules would be expanded under
our bill to include coverage for self-administered pain medications.
Mr. President, I realize that there is still a lot of work to be
done. I believe our bill represents a significant step towards
improving end-of-life care for Medicare beneficiaries. By advocating
changes within the health care system, research community, and national
policy, we reaffirm our commitment to quality patient care. In our
legislation, we have set forth a broad framework to respond to many of
the concerns facing people at the end-of-life. This legislation
embodies the fundamental principle of the Patient Self-Determination
Act--to involve patients in their own treatment decisions and to
respect and follow their wishes when they are no longer capable of
voicing them.
To conclude, I am proud to offer this legislation with Senator
Collins. We hope consideration of this bill will be an opportunity to
take notice of the many constructive steps that can be taken to address
the needs of patients and family members grappling with great pain and
medical difficulties. During this time when physician assisted suicide
obtains so many headlines, we are eager to call on Congress to turn to
the alternative ways of providing help and relief to seniors and other
Americans who only are interested in such alternatives.
Ms. COLLINS. Mr. President, I am pleased to be joining my
colleague from West Virginia, Senator Rockefeller, in introducing the
Advance Planning and Compassionate Care Act, which is intended to
improve the way we care for people at the end of their lives.
Noted health economist Uwe Reinhardt once observed that ``Americans
are the only people on earth who believe that death is negotiable.''
Advancements in medicine, public health, and technology have enabled
more and more of us to live longer and healthier lives. However, when
medical treatment can no longer promise a continuation of life,
patients and their families should not have to fear that the process of
dying will be marked by preventable pain, avoidable distress, or care
that is inconsistent with their values or wishes.
The fact is, dying is a universal experience, and it is time to re-
examine how we approach death and dying and how we care for people at
the end of their lives. Clearly, there is more that we can do to
relieve suffering, respect personal choice and dignity, and provide
opportunities for people to find meaning and comfort at life's
conclusion.
Unfortunately, most Medicare patients and their physicians do not
currently discuss death or routinely make advance plans for end-of-life
care. As a result, about one-fourth of Medicare funds are now spent on
care at the end of life that is geared toward expensive, high-
technology interventions and ``rescue'' care. While most Americans say
they would prefer to die at home, studies show that almost 80 percent
die in institutions where they may be in pain, and where they are
subjected to high-tech treatments that merely prolong suffering.
Moreover, according to a Dartmouth study conducted by Dr. Jack
Wennberg, where a patient lives has a direct impact on how that patient
dies. The study found that the amount of medical treatment Americans
receive in their final months varies tremendously in the different
parts of the country, and it concluded that the determination of
whether or not an older patient dies in the hospital probably has more
to do with the supply of hospital beds than the patient's needs or
preference.
The Advance Planning and Compassionate Care Act is intended to help
us improve the way our health care system serves patients at the end of
their lives. Among other provisions, the bill makes a number of changes
to the Patient Self-Determination Act of 1990 to facilitate appropriate
discussions and individual autonomy in making difficult discussions
about end-of-life care. For instance, the legislation requires that
every Medicare beneficiary receiving care in a hospital or nursing
facility be given the opportunity to discuss end-of-life care and the
preparation of an advanced directive with an appropriately trained
professional within the institution. The legislation also requires that
if a patient has an advanced directive, it must be displayed in a
prominent place in the medical record so that all the doctors and
nurses can clearly see it.
The legislation will expand access to effective and appropriate pain
medications for Medicare beneficiaries at the end of their lives.
Severe pain, including breakthrough pain that defies usual methods of
pain control, is one of the most debilitating aspects of terminal
illness. However, the only pain medication currently covered by
Medicare in an outpatient setting is that which is administered by a
portable pump.
It is widely recognized among physicians treating patients with
cancer and other life-threatening diseases that self-administered pain
medications, including oral drugs and transdermal patches, offer
alternatives that are equally effective in controlling pain, more
comfortable for the patient, and much less costly than the pump.
Therefore, the Advance Planning and Compassionate Care Act would expand
Medicare to cover self-administered pain medications prescribed for the
relief of chronic pain in life-threatening diseases or conditions.
In addition, the legislation authorizes the Department of Health and
Human Services to study end-of-life issues for Medicare and Medicaid
patients and also to develop demonstration projects to develop models
for end-of-life care for Medicare beneficiaries who do not qualify for
the hospice benefit, but who still have chronic debilitating and
ultimately fatal illnesses. Currently, in order for a Medicare
beneficiary to qualify for the hospice benefit, a physician must
document that the person has a life expectancy of six months or less.
With some conditions--like congestive heart failure--it is difficult to
project life expectancy with any certainty. However, these patients
still need hospice-like services, including advance planning, support
services, symptom management, and other services that are not currently
available.
Finally, the legislation establishes a telephone hotline to provide
consumer information and advice concerning advance directives, end-of-
life issues and medical decision making and directs the Agency for
Health Care Policy and Research to develop a research agenda for the
development of quality measures for end-of-life care. In this regard,
[[Page S2771]]
Senator Rockefeller and I are particularly appreciative that Senator
Bill Frist has incorporated our recommendation that end-of-life
healthcare be added as a priority population in the Agency for Health
Care Policy and Research's overall mission and duties in the bipartisan
legislation he introduced last week to reauthorize the Agency.
The legislation we are introducing today is particularly important in
light of the current debate on physician-assisted suicide. The desire
for assisted suicide is generally driven by concerns about the quality
of care for the terminally ill; by the fear of prolonged pain, loss of
dignity and emotional strain on family members. Such worries would
recede and support for assisted suicide would evaporate if better
palliative care and more effective pain management were widely
available.
Mr. President, patients and their families should be able to trust
that the care they receive at the end of their lives is not only of
high quality, but also that it respects their desires for peace,
autonomy and dignity. The Advanced Planning and Compassionate Care Act
that Senator Rockefeller and I are introducing today will give us some
of the tools that we need to improve care of the dying in this country,
and I urge all of my colleagues to join us as cosponsors.
______
By Mr. BAUCUS (for himself and Mr. Craig):
S. 629. A bill to amend the Federal Crop Insurance Act and the
Agricultural Market Transition Act to provide for a safety net to
producers through cost of production crop insurance coverage, to
improve procedures used to determine yields for crop insurance, to
improve the noninsured crop assistance program, and for other purposes;
to the Committee on Agriculture, Nutrition, and Forestry.
``crop insurance improvement act of 1999''
Mr. BAUCUS. Mr. President, I rise today to announce the
introduction of the Crop Insurance Improvement Act of 1999. Senator
Craig and I are introducing this bill today to provide a safety net to
our agricultural producers and make rural America stronger than ever.
I especially would like to thank Senator Craig's staff, Wayne Hammon,
who has worked diligently with my staff in bringing together this
bipartisan effort for agriculture. I also compliment my colleagues
Senators Kerry and Roberts who have introduced crop insurance reform
legislation, of which I am also a cosponsor, for setting the stage for
a major overhaul of the crop insurance program. This bill, the Crop
Insurance Improvement Act of 1999 is designed to compliment their
efforts by extending the safety net to help those producers of
speciality or alternative crops who find particular challenges in the
present system.
Now more than ever this crop insurance reform legislation is needed
for my state's leading industry.
Mr. President, agriculture is Montana's leading industry. More than
100,000 Montanans work in farm and ranch related jobs. That is nearly
20 percent of our state's total employment. In 1998, Montana
agriculture generated $2.4 billion--65 percent of our state's total
economy. In Montana, agriculture is not only an integral part of our
economy, it's a way of life. And that way of life is in peril.
In 1998, Montana producers were hit hard as our ag exports dropped by
$570 million, and commodities such as wheat and beef plummeted to
Depression-era prices.
In response to this severe economic hit, we fought hard in the 105th
Congress to install a safety net where the 1996 Freedom to Farm bill
fell short. With help from the White House, we were able to get almost
$8 billion in emergency assistance for our producers in Montana and
across the country. We responded to the crisis but there's no assurance
that we won't be faced with the same problems each year.
This bill is aimed at getting Montana producers back on their feet.
We do that by focusing on, and fighting for agriculture, together. I
sincerely hope that 1999 will be the ``Year of Recovery.'' And I
believe we can do this by maintaining focus on three goals:
We must pry open foreign markets to Montana products.
We must help agriculture producers at home.
We must install a permanent safety net to help producers weather
times of crisis.
By aggressively pursuing these three goals, I am confident that we
can help Montana agriculture not only recover, but be stronger than
ever before.
Today, however, I would like to focus on the goal of installing a
safety net to help producers during times of crisis.
Mr. President, no matter how well we are doing nationally and
internationally, we must be prepared for hard times. In 1996, Congress
passed the Freedom to Farm Act. Since then, wheat prices have fallen 55
percent. Who could have predicted that prices would plunge from $4.50 a
bushel for wheat in 1996 to $2.91 a bushel by September 1998? This
drop, triggered by a combination of natural disasters and oversupply in
the marketplace, was impossible to predict.
As wheat and other agricultural commodity prices dipped to record
lows, America's producers were suddenly stranded without a safety net,
causing a severe financial crisis. This made it clear to me that we
need a contingency plan to help us when hard times come so that we can
continue to grow when times are good.
In February I hosted a crop insurance field hearing in Shelby,
Montana. Ken Ackerman, Director of the Risk Management Agency traveled
from Washington, D.C. to meet with Montana producers to hear first hand
their concerns about crop insurance. At that hearing some of Montana's
outstanding producers shared their stories, their frustrations and
their ideas about reforming the system. I would like to thank Rick
Sampsen, Bill Brewer, Verg Aageson, Brian Schweitzer, Nancy Peterson,
Rollie Schlepp, Scott Kulbeck and Mary Schuler for taking the time to
lend their voices to this important discussion. Their ideas are
reflected in this legislation today which will:
(1) Install a safety net;
(2) Allow producers to buy a policy that covers their cost of
production;
(3) Shorten the Actual Production History requirement for rotated
crops; and
(4) Eliminate the Area Requirement for speciality crops reliant on
the Noninsured Crop Disaster Assistance Program (NAP).
Simply put, Mr. President, the Crop Insurance Improvement Act of 1999
takes decisive action to help those producers who are presently in
danger of losing their agricultural heritage. It provides them the
flexibility to try new and alternative crops and gives them the freedom
to farm, as originally intended, by allowing them the chance to build
up a production history, cover their cost of production, and eventually
purchase crop insurance coverage for their speciality crops. It gives
producers a chance to do what they do best--farm.
Mr. President, I urge all of all of my colleagues to support this
important legislation, and join Senators Craig and myself in getting
rural America back on its feet.
Mr. CRAIG. Mr. President, I rise today to join my colleague
Senator Baucus in the introduction of legislation to reform the federal
agricultural crop insurance program. Like legislation introduced
earlier this month by Senator Roberts, Kerrey, myself, and others, this
bill aims at bringing about common sense reform to the program and will
assist farmers through the economic hardship they currently face.
The bill addresses several concerns farmers from my state and I have
about the current crop insurance program. Specifically, I am pleased
that the legislation includes provisions to reform the noninsured crop
disaster assistance program, or NAP. NAP is used by farmers who grow
``specialty'' or ``minor'' crops across the nation.
Idaho's great agricultural economy is based on minor and non-
traditional crops. We lead the nation in the production of such crops
as potatoes, winter peas, and trout. Idaho is second in the production
of seed peas, lentils, sugar beets, barley, and mint. Furthermore, we
are in the top 5 states in the production of hops, onions, plums, sweet
cherries, alfalfa, and American cheese. The needs of these producers
are just as important as those of more traditional farm commodity
producers.
I believe this bill to be an important step toward meaningful and
sweeping
[[Page S2772]]
reform and includes changes that are long overdue. I look forward to
working with my colleagues on the Senate Agricultural Committee to
enact these important reforms and give farmers the risk management
tools they need.
______
By Mr. DeWINE (for himself, Mr. Brownback, Mr. Bingaman, Mr.
Inouye, Mr. Levin, Mr. Hollings, and Mr. Durbin):
S. 631. A bill to amend the Social Security Act to eliminate the time
limitation on benefits for immunosuppressive drugs under the medicare
program, to provide continued entitlement for such drugs for certain
individuals after medicare benefits end, and to extend certain medicare
secondary payer requirements; to the Committee on Finance.
immunosuppressive Drug Coverage Act of 1999
Mr. DeWINE. Mr. President, for quite some time, I have worked
with the organ and tissue donation community to help educate others
about donation and transplant issues. With each organ that is
successfully transplanted, a gift of new life is given to the
recipient.
Today I rise to offer the Immunosuppressive Drug Coverage Act of 1999
to help ensure that those receiving Medicare covered transplants will
be able to afford the drugs necessary to keep their bodies from
rejecting their new organs. The current 36-month Medicare coverage
limit is arbitrary, and frankly, sorely inadequate. We are not talking
about a car lease, but about a new lease on life. This coverage can
mean the difference between life and death for some, and at the very
least, the difference between a Medicare transplant recipient having to
experience the pain of an organ rejection, a return to dialysis--for
kidney recipients--and the return to a very long waiting list for
another organ.
These organs are a precious investment, and it simply defies logic
that Medicare covers the initial transplant, the life-long extensive
medical treatment that is needed if the organ is rejected, and a second
transplant (if that person is fortunate enough to find a second
organ)--but not the drugs that can help prevent the rejection of the
initial transplanted organ beyond 36 months. Many Medicare transplant
recipients are not able to afford these immunosuppressive drugs, so
they may ration their use of the drugs or they may stop taking them
altogether. Let's give them a third alternative--to keep taking the
drugs and to keep their organs.
______
By Mr. DeWINE (for himself, Mr. Abraham, Mr. Chafee, Mr. Graham,
Mr. Bond, Mr. Domenici, Mr. Kennedy, Mr. Durbin, Mr. Burns, and
Mr. Dodd):
S. 632. A bill to provide assistance for poison prevention and to
stabilize the funding of regional poison control centers; to the
Committee on Health, Education, Labor, and Pensions.
poison control center enhancement and awareness act of 1999
Mr. DeWINE. Mr. President, today I rise to introduce the
Poison Control Center Enhancement and Awareness Act of 1999. These
poison control centers need our help. The unstable sources of funding
for these centers have resulted in many of them having to close. This
unfortunate decline can be reversed and cost savings can be achieved by
the efficient use of these centers. I would like to thank my colleague,
Senator Abraham, for his efforts on behalf of this bill and I'd also
like to thank my colleagues on the Congressional Prevention Coalition,
Senators Chafee and Graham of Florida, for their support of this
legislation.
This bill establishes and authorizes funding for a national toll-free
number to ensure that all Americans have access to poison control
center services. This number will be automatically routed to the center
designated to cover the caller's region. By having to only remember one
national phone number, parents will be able to call this number in the
event their child accidentally swallows a poisonous substance while
they are away from home on vacation, and be routed to the closest
poison control center for treatment advice. This system will improve
access to poison control center services for everyone. It will simplify
efforts to educate parents and the public about what to do in the event
of a poisoning exposure.
Each year, more than 2 million poisoning are reported to poison
control centers throughout the United States. More than 90% of these
poisonings happen in the home--and over 50 percent of poisoning victims
are children under 6 years of age. By providing expert advice to
distraught parents, babysitters, poisoning victims, and health care
professionals, poison control centers decrease the severity of illness
and prevent deaths.
These centers serve cost-effective public health services. For every
dollar spent on poison control center services, $7 in medical costs are
saved by reducing the inappropriate services. Most importantly, we can
save lives by ensuring that stabilizing funding sources for these
centers. My home state of Ohio, for example, has 3 poison control
centers--one in Columbus, Cincinnati, and Cleveland--that rely on an
uncertain patchwork of federal, state, local, and private funding
sources. The federal dollars that will be provided by this legislation
may be used to supplement, NOT replace, existing federal, state, local,
and private funds that are invested in these centers. For those states
that have recently experienced the closure of the only existing poison
control center in the area, this grant funding can be used to open a
new center--provided it can meet certification requirements. It is
essential for us to act now to prevent further closures of such
valuable resources.
______
By Mr. ASHCROFT:
S. 633. A bill to amend title II of the Social Security Act to
require that investment decisions regarding the social security trust
funds be made on the basis of the best interests of beneficiaries, and
for other purposes; to the Committee on Finance.
the social security trust fund management act of 1999
Mr. ASHCROFT. Mr. President, there is no more worthy government
obligation than ensuring that those who paid a lifetime of Social
Security taxes will receive their full Social Security benefits. Social
Security is our most important social program, a contract between the
government and its citizens. Americans, including one million
Missourians, depend on this commitment.
Unfortunately, as you know, the Social Security system is facing some
long-term difficulties. While the Trust Funds are currently building up
healthy surpluses--$127 billion in FY 99--by 2013 these surpluses will
disappear, and by 2032 the system is facing bankruptcy.
With this impeding crisis in mind, I have embarked on a serious
examination of the Social Security system. I have spent many hours in
the last few months, analyzing the history and workings of this
important program, in order to figure out how we can make this program
work better.
The result of this effort has been a package of important reforms
designed to protect Social Security. This package is designed to
protect Social Security but, more importantly, it is designed to
protect the American people--from debt, from risky, unwise investments,
from policies that unfairly deny Social Security to some seniors who
choose to work after retirement, and from attempts to use our
retirement dollars on spending purposes other than Social Security. The
Social Security system has some imperfections that now make our long-
term situation worse than it should be, and my package is designed to
improve the system in the near term, so that we can begin the important
work of reforming Social Security for the long term.
One of the points I have already introduced. Last week, I introduced
the Protect Social Security Benefits Act. This legislation will prevent
surpluses in the Social Security Trust Funds from financing deficits in
the rest of the federal budget. Social Security should not finance
irresponsible spending or tax cuts that are not otherwise paid for. No
rules now stop deficit budgets from being considered. That must end.
In addition to the problem of the misdirection of Social Security's
surpluses, I also want to improve the way the funds are handled. There
is no getting around the fact that a key to the long-term solvency of
Social Security is how the current mushrooming Social Security Trust
Funds Management Act, which focuses on how the current Social Security
surplus is invested and managed.
[[Page S2773]]
The bill requires the Secretary of the Treasury, the Managing Trustee
of Social Security, to consult with the Social Security Commissioner
before decisions are made about investing the Social Security trust
funds. This additional step will preserve the independence of Social
Security and make sure investment decisions are based on the best
interest of paying current and future benefits. Currently, the
Secretary of the Treasury, who is by law the Managing Trustee, has the
sole authority to invest Social Security surpluses, although the law
limits that authority to two types of government debt. Nowhere in
current law is the Managing Trustee or the Board of Trustees or the
Social Security Commissioner directed to make investment decisions on
the basis of protecting current and future benefits. Making sure that
we can pay benefits now and in the future should be the highest
priority. My bill adds this important change to the law.
The Social Security Trust Funds Management Act explicitly forbids
Social Security Trust Funds from being invested in the stock market.
Chairman Alan Greenspan says that investing Social Security funds in
the market is bad for Social Security and bad for our economy. When
Alan Greenspan talks, Congress ought to listen. The federal government
should not own corporate stocks and bonds. The government must not have
undue influence over the market. In addition, having the government put
Social Security taxes in the stock market adds risk to retirement, and
that is a gamble I am unwilling to make for the one million Missourians
who now rely on Social Security. The Social Security Trust Funds
Management Act legislates that government will not gamble with Social
Security in the stock market.
In addition, the bill requires Social Security to provide upon
request--and, as soon as secure enough to ensure confidentiality, over
the Internet--more detailed information about individuals' contribution
levels and rates of return.
Let me explain the reasons for these three provisions.
In order to understand the investment of the Social Security Trust
Funds, we must first answer the question, Where is the Social Security
surplus? This question helps us understand what the Social Security
surplus is, and is not. In truth, the Trust Funds have no money, only
interest-bearing notes. It would be foolish to have money in the trust
fund that earned no interest or had no return. In return for the Social
Security notes, Social Security taxes are sent to the U.S. Treasury and
mingled with other government revenues, where the entire pool of cash
pays the government's day-to-day expenses. While the Trust Funds
records now show a total of $857 billion in the fund, these assets
exist only in the form of government securities, or debt. According to
the Washington Post, ``The entire Social Security Trust Fund, all
[$857] billion or so of it, fits readily in four ordinary brown,
accordion-style folders that one can easily hold in both hands. The 174
certificates reside in a plain combination-lock filing cabinet on the
third floor of the bureau's office building.''
The placement of all of these funds into nonmarketable government
securities raises some questions about the law that governs the
management of Social Security money. Under current law, Social Security
is now an independent agency. Its Board of Trustees oversees the
financial operations of Social Security. This Board is composed of six
members: The Secretaries of Treasury, Labor, Health and Human Services,
the Commissioner of Social Security and two members of the public
nominated by the President and confirmed by the Senate. This Board
reports annually to Congress on the financial status of the Trust
Funds. The Secretary of Treasury is the Managing Trustee. The Managing
Trustee has sole authority to invest the surplus trust funds not needed
to pay current benefits. As for the investment of the fund, while the
Managing Trustee is responsible for the investment, his investment
options are limited by law to two types of Federal Government debt
securities.
The law directs the Managing Trustee to invest the surplus in
``special issue non-marketable'' federal debt obligations, except where
he determines that the purchase of ``marketable securities is ``in the
public interest,'' not Social Security's interest. Sadly, it is all too
easy to think of times when an administration strapped for funds might
use this power to act in the public interest, and not in the interest
of Social Security. It`s even happened recently. In 1995, the Clinton
Administration used Federal employee pension funds to prevent the
government from breaching the debt limit during the two week Government
shutdown.
Right now, about 99% of the securities in the trust funds are special
issue non-marketable securities, and about 1% are marketable
securities. These two types of bonds are similar in that they both
represent government debt. They differ in that non-marketable
securities are available only to the trust funds and not to the public
and they pay a rate of interest that is calculated and set in law.
Marketable securities, in contrast, are sold to the public at auction
and pay the prevailing yield as determined by the marketplace.
This review of current law highlights three important points.
First, nowhere in current law is the Managing Trustee or the Board of
Trustees or the Social Security Commissioner directed to make
investment decisions on the basis of how to best protect payment of
current and future benefits, taking risk into account. This is
unacceptable. The Social Security Trust Funds Management Act changes
this. This change is consistent with the legal concept that a trustee
owes a fiduciary duty to act on behalf of the intended beneficiary, and
exercises a heightened standard of care in management decisions and
actions.
Second, although Social Security is an independent agency, the
Secretary of Treasury retains sole authority to invest Social Security
surpluses. There is a conflict of responsibilities held by the
Secretary of Treasury in his dual capacity as Managing Trustee of
Social Security. Presumably, the Trustee is to invest those funds as
securely as possible, but also with the highest possible rate of
return. The role of the Secretary of the Treasury is to manage the
finances of the United States Government, minimizing, to the extent
possible, the interest charges that the government has to pay in the
long run. The problem is that the interest received by the trust fund
is also interest that must be paid by the Treasury. If the Managing
Trustee is maximizing Social Security's returns, he may not be
minimizing the Treasury's interest obligations. And if he is minimizing
the Treasury's interest obligations, he may not be maximizing the
returns for the Social Security Trust Funds.
The Social Security Trust Funds Management Act is designed to resolve
this inherent conflict, and still be consistent with the principle that
Social Security is distinct from the Federal Government generally. The
Act requires the Secretary of the Treasury to consult with the Social
Security Commissioner before investment decisions are made. If the
Social Security Commissioner disagrees with investment decisions made
by the Secretary, he or she must notify the President and Congress
immediately in writing.
Some experts believe that in some years and in certain market
conditions it is preferable for the Trust Funds to buy marketable
securities rather than non-market securities. A leading Missouri
investment firm, Edward Jones, says the following:
Edward Jones believes that this idea has merit because it
provides additional flexibility to the management of the
federal debt. The use of marketable securities would not only
increase liquidity, but also would make bond swaps possible
(the exchange of one bond issue for another) which could
better facilitate management of the debt. It also could
reduce interest payments by targeting specific securities
when market conditions dictate.
Under the Social Security Trust Funds Management Act, the
Commissioner of Social Security could so advise the Treasury Secretary.
If the Treasury Secretary does not accept the recommendation of the
Social Security Commissioner, the Commissioner has the duty to inform
both the President and to Congress.
These investment issues take on greater importance in the context of
the President's proposal to allow, for the first time in the history of
Social Security, as much as $700 billion in Social Security funds to be
invested in the stock market by the Government.
The legislation I am proposing reaffirms current law, making explicit
[[Page S2774]]
what is now implicit that this kind of governmental meddling into
private markets is forbidden. Federal Reserve Chairman Alan Greenspan
says this idea is bad for Social Security and bad for our economy. As I
said before, when Chairman Greenspan talks, Congress ought to listen.
Chairman Greenspan has said this plan ``will create a lower rate of
return for Social Security recipients,'' and he ``does not believe that
it is politically feasible to insulate such huge funds from a
governmental direction.'' The last thing this country needs is the
Federal Government directing the investment of Social Security funds
based on some trendy politically-driven notion of which industries or
which countries are in political favor at the moment.
The Government's putting Social Security taxes in the stock market
adds risk to retirement and is a gamble I am unwilling to make for one
million Missourians who get Social Security. This legislation puts
Congress on record that Government will not gamble Social Security in
the stock market. While I understand the impulse to harness the great
potential of the stock market, significant government involvement in
the stock market could tend toward economic nationalization, excess
government involvement in private financial markets, and short-term,
politically motivated investment decisions that could diminish Social
Security's potential rate of return.
This scheme is dangerous. Imagine, if you will, what would happen if
the government had $2.7 billion in the market on Black Monday, October
19, 1987, when the stock market lost 22% of its value. The trust fund's
owners--America's current and future retirees--would have lost a
collective total of $633 billion. Imagine seniors who depend on Social
Security watching TV news of the stock market collapse, wondering, even
fearing, if their Social Security was in danger. While individuals
properly manage their financial portfolios to control risk, the
government has no business taking these gambles with the people's
money.
Even President Clinton has expressed skepticism with this idea. In
Albuquerque last year, the President said the following: ``I think most
people just think if there is going to be a risk taken, I'd rather take
it than have the government take it for me.'' He was right then, and he
is wrong now. While Americans should invest as much as they can afford
in private equities to plan for their own retirements, the government
should stay out of the stock market.
I recently received a letter from Todd Lawrence of Greenwood,
Missouri, who wrote: ``It has been suggested that the government would
invest in the stock market with my Social Security money. No offense,
but there is not much that the Government touches that works well. Why
would making MY investment decisions for me be any different. Looking
at it from a business perspective, would the owner of a corporation
feel comfortable if the government were the primary shareholder?'' Todd
Lawrence understands what President Clinton does not. No corporation
would want the government as a shareholder, and no investor should want
the government handling their investment.
The last provision of my bill gives Americans more information about
how much they can expect to receive from the Social Security system.
While the Social Security Administration already provides helpful and
comprehensive information about future benefits, it does not provide
much information about its costs or its rate of return. While the
Social Security's current practice of providing benefit information is
useful, it is not enough.
It is not fair to ask Americans to plan for retirement and not tell
them the actual cost or the opportunity costs of those benefits. As the
American people consider that further steps are necessary to reform
Social Security, they are entitled to accurate information about how
well their Social Security investments are doing.
This legislation would address this problem by requiring the Social
Security Administration, upon request, to provide individuals' own rate
of return information, and to make such information available over the
Internet as soon as it is sufficiently secure to ensure beneficiary
confidentiality. Americans need to know the rate of return on Social
Security. This information is vital for Americans in order for them to
make the right decisions about their own financial futures, as well as
the future of the Social Security program.
The Social Security Trust Funds Management Act is designed to protect
the Social Security Trust Funds. More importantly, it is designed to
protect the American people--from conflicts of interest, from bad
investments, from misinformation, and from attempts to place the Trust
Funds in risky and inappropriate investments. While I value the Social
Security system, I value the American people, people like Todd Lawrence
and the four million other Missourians who either pay into the Social
Security system or receive Social Security benefits, more. My primary
responsibility is to them. My plan to protect the Social Security
system will protect the American people first, and I will work to make
sure that this package becomes law.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 633
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Social Security Trust Funds
Management Act of 1999''.
SEC. 2. INVESTMENT OF THE FEDERAL OLD-AGE AND SURVIVORS
INSURANCE TRUST FUND AND THE FEDERAL DISABILITY
INSURANCE TRUST FUND.
(a) In General.--Section 201(d) of the Social Security Act
(42 U.S.C. 401(d)) is amended to read as follows:
``(d)(1) Subject to paragraphs (2) and (3), it shall be the
duty of the Managing Trustee to invest such portion of the
Trust Funds as is not, in the judgment of the Trustee,
required to meet current withdrawals. The Managing Trustee
may purchase interest-bearing obligations of the United
States or obligations guaranteed as to both principal and
interest by the United States, on original issue or at the
market price.
``(2)(A) If the Managing Trustee, after consultation with
the Commissioner of Social Security, determines that the
purchase of obligations issued in accordance with paragraph
(4) is in the best interest of paying current and future
benefits under this title, and will not jeopardize the
payment of such benefits, the Managing Trustee may purchase
such obligations.
``(B) If the Commissioner of Social Security does not
concur with the investment decisions of the Managing Trustee,
or believes that other investment strategies are appropriate,
the Commissioner shall promptly so inform the President and
Congress in writing.
``(3) In investing contributions made to the Trust Funds,
the Managing Trustee may not invest such contributions in
private financial markets. Neither the Managing Trustee nor
any other officer or employee of the Federal Government shall
direct private pension plans as to what type of investments
to make or in which financial markets to invest.
``(4) The purposes for which obligations of the United
States may be issued under chapter 31 of title 31, United
States Code, are hereby extended to authorize the issuance at
par of public-debt obligations for purchase by the Trust
Funds. Such obligations issued for purchase by the Trust
Funds shall have maturities fixed with due regard for the
needs of the Trust Funds and shall bear interest at a rate
equal to the average market yield (computed by the Managing
Trustee on the basis of market quotations as of the end of
the calendar month next preceding the date of such issue) on
all marketable interest-bearing obligations of the United
States then forming a part of the public debt which are not
due or callable until after the expiration of four years from
the end of such calendar month; except that where such
average market yield is not a multiple of one-eighth of 1
percent, the rate of interest of such obligations shall be
the multiple of one-eighth of 1 percent nearest such market
yield. Each obligation issued for purchase by the Trust Funds
under this subsection shall be evidenced by a paper
instrument in the form of a bond, note, or certificate of
indebtedness issued by the Secretary of the Treasury setting
forth the principal amount, date of maturity, and interest
rate of the obligation, and stating on its face that the
obligation shall be incontestable in the hands of the Trust
Fund to which it is issued, that the obligation is supported
by the full faith and credit of the United States, and that
the United States is pledged to the payment of the obligation
with respect to both principal and interest.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date of enactment of this Act.
SEC. 3. INFORMATION REQUIREMENTS FOR SOCIAL SECURITY ACCOUNT
STATEMENTS.
(a) In General.--Section 1143(a) of the Social Security Act
(42 U.S.C. 1320b-13(a)) is amended--
[[Page S2775]]
(1) in paragraph (2)--
(A) in subparagraph (B), by inserting ``, including a
separate estimate of the amount of interest earned on the
contributions,'' after ``disability insurance'';
(B) in subparagraph (C)--
(i) by inserting ``, including a separate estimate of the
amount of interest earned on the contributions,'' after
``hospital insurance''; and
(ii) by striking ``and'' after the semicolon;
(C) in subparagraph (D), by striking the period at the end
and inserting a semicolon;
(D) by redesignating subparagraphs (A), (B), (C), and (D)
as subparagraphs (B), (C), (D), and (E), respectively;
(E) by inserting after the matter preceding subparagraph
(B), as redesignated by subparagraph (D), the following:
``(A) the name, age, gender, mailing address, and marital
status of the eligible individual;'';
(F) by adding at the end the following:
``(F) the total amount of the employer and employee
contributions for the eligible individual for old-age and
survivors insurance benefits, as of the end of the month
preceding the date of the statement, in both actual dollars
and dollars adjusted for inflation;
``(G) the projected value of--
``(i) the aggregate amount of the employer and employee
contributions for old-age and survivors insurance benefits
that are expected to be made by or on behalf of the
individual prior to the individual attaining retirement age,
in both actual dollars and dollars adjusted for inflation;
``(ii) the annual amount of old-age and survivors insurance
benefits that are expected to be payable on the eligible
individual's account for a single individual and for a
married couple, in dollars adjusted for inflation;
``(iii) the total amount of old-age and survivors insurance
benefits payable on the eligible individual's account for the
individual's life expectancy, in dollars adjusted for
inflation, identifying--
``(I) the life expectancy assumed;
``(II) the amount of benefits received on the basis of each
$1 of contributions made by or on behalf of the individual;
and
``(III) the projected annual rate of return for the
individual, taking into account the date on which the
contributions are made in the eligible individual's account
and the date on which the benefits are paid;
``(iv) the total amount of old-age and survivors insurance
benefits that would have accumulated on the eligible
individual's account on the date on which the individual
attains retirement age if the contributions for such
individual had been invested in Treasury 10-year saving bonds
at the prevailing interest rate for such bonds as of the end
of the month preceding the date of the statement, and,
alternatively, in the Standard and Poor's 500, or an
equivalent portfolio of common stock equities that are based
on a broad index of United States market performance, in
dollars adjusted for inflation, identifying--
``(I) the date of retirement assumed;
``(II) the interest rate used for the projection; and
``(III) the amount that would be received on the basis of
each $1 of contributions made by or on behalf of the
individual;
``(H) the average annual rate of return, adjusted for
inflation, on the Treasury 10-year saving bond as of the date
of the statement;
``(I) the average annual rate of return, adjusted for
inflation, on the Standard and Poor's 500, or an equivalent
portfolio of common stock equities that are based on a broad
index of United States market performance, for the preceding
25 years;
``(J) a brief statement that identifies--
``(i) the balance of the trust fund accounts as of the end
of the month preceding the date of the statement;
``(ii) the annual estimated balance of the trust fund
accounts for each of the succeeding 30 years; and
``(iii) the assumptions used to provide the information
described in clauses (i) and (ii), including the rates of
return and the nature of the investments of such trust fund
accounts; and
``(K) a simple 1-page summary and comparison of the
information that is provided to an eligible individual under
subparagraphs (G), (H), and (I).''; and
(2) by striking paragraph (3) and inserting the following:
``(3) The estimated amounts required to be provided in a
statement under this section shall be determined by the
Commissioner using a general methodology for making such
estimates, as formulated and published at the beginning of
each calendar year by the Board of Trustees of the trust fund
accounts. A description of the general methodology used shall
be provided to the eligible individual as part of the
statement required under this section.
``(4) The Commissioner of Social Security shall notify an
individual who receives a social security account statement
under this section that the individual may request that the
information described in paragraph (2) be determined on the
basis of relevant information provided by the individual,
including information regarding the individual's future
income, marital status, date of retirement, or race.
``(5) For purposes of this section--
``(A) the term `dollars adjusted for inflation' means--
``(i) dollars in constant or real value terms on the date
on which the statement is issued; and
``(ii) an amount that is adjusted on the basis of the
Consumer Price Index.
``(B) the term `eligible individual' means an individual
who--
``(i) has a social security account number;
``(ii) has attained age 25 or over; and
``(iii) has wages or net earnings from self-employment; and
``(C) the term `trust fund account' means--
``(i) the Federal Old-Age and Survivors Insurance Trust
Fund; and
``(ii) the Federal Disability Insurance Trust Fund.''.
(b) Mandatory Provision of Statements Through Means Such As
the Internet.--Section 1143(c)(2) of the Social Security Act
(42 U.S.C. 1320b-13(c)(2)) is amended--
(1) in the first sentence, by inserting ``(which shall
include the Internet as soon as the Commissioner of Social
Security determines that adequate measures are in place to
protect the confidentiality of the information contained in
the statement)'' before the period; and
(2) by striking the second and third sentences.
(c) Technical Amendment.--Section 1143 of the Social
Security Act (42 U.S.C. 1320b-13) is amended by striking
``Secretary'' each place it appears and inserting
``Commissioner of Social Security''.
(d) Effective Date.--The amendments made by this Act shall
apply to statements provided for fiscal years beginning with
fiscal year 2000.
______
By Mr. MACK (for himself, Mr. Grams, Mr. Lieberman, and Mr. Kyl):
S. 635. A bill to amend the Internal Revenue Code of 1986 to more
accurately codify the depreciable life of printed wiring board and
printed wiring assembly equipment; to the Committee on Finance.
the printed circuit investment act of 1999
Mr. MACK. Mr. President, today, along with Senators Grams, Lieberman,
and Kyl, I introduce the Printed Circuit Investment Act of 1999. This
bill would allow manufacturers of printed wiring boards and printed
wiring assemblies, known as the electronic interconnection industry, to
depreciate their production equipment in 3 years rather than the 5 year
period under current law.
As we approach the 21st century, our Nation's Tax Code should not
stand in the way of technological progress. Printed wiring boards and
assemblies are literally central to our economy, as they are the nerve
centers of nearly every electronic device from camcorders and
televisions to medical devices, computers and defense systems. But the
Tax Code places U.S. manufacturers at the disadvantage relative to
their Asian competitors, because of different depreciation treatment.
This disadvantage is particularly difficult for U.S. firms to bear, as
the interconnection industry consists overwhelmingly of small firms
that cannot easily absorb the costs inflicted by an irrationally-long
depreciated schedule.
As technology continues to advance at light speed, the exhilaration
of competition in a dynamic market is dampened by the effects of a tax
code that has not kept pace with these changes. Obsolete
interconnection manufacturing equipment is kept on the books long after
this equipment has gone out the door. Companies with the competitive
fire to enter such a rapidly-evolving industry must constantly invest
in new state-of-the art equipment, replacing obsolete equipment every
18 to 36 months just to remain competitive. U.S. investments in new
printed wiring board and assembly manufacturing equipment have nearly
tripled since 1991--growing from $847 million to an estimated $2.4
billion.
But this investment is taxed at an artificially-high rate, because
deductions for the cost of the equipment are spread over a period that
is several years longer than justified. The industry is at the mercy of
tax laws passed in the 1980s, which were based on 1970s-era electronics
technology. It is no wonder that the market share of U.S.
interconnection companies has been cut in half over this period. Our
Tax Code should not continue to undermine the competitiveness of
American businesses. The opportunity is before us to correct the tax
laws that dictate how rapidly board manufacturers and electronic
assemblers can depreciate equipment needed to fabricate and assemble
circuit boards.
The Printed Circuit Investment Act of 1999 will provide modest tax
relief to the electronics interconnection industry and the 250,000
Americans, residing in every state in the Union, whose jobs rely on the
success of this industry. This industry should get fair and accurate
tax treatment.
[[Page S2776]]
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 635
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Printed Circuit Investment
Act of 1999''.
SEC. 2. 3-YEAR DEPRECIABLE LIFE FOR PRINTED WIRING BOARD AND
PRINTED WIRING ASSEMBLY EQUIPMENT.
(a) In General.--Subparagraph (A) of section 168(e)(3) of
the Internal Revenue Code of 1986 (relating to classification
of property) is amended by striking ``and'' at the end of
clause (ii), by striking the period at the end of clause
(iii) and inserting ``, and'', and by adding at the end the
following new clause:
``(iv) any printed wiring board or printed wiring assembly
equipment.''
(b) 3-Year Class Life.--Subparagraph (B) of section
168(g)(3) of such Code is amended by inserting after the item
relating to subparagraph (A)(iii) the following new item:
``(A)(iv)......................................................3''.....
(c) Effective Date.--The amendments made by this section
shall apply to equipment placed in service after the date of
the enactment of this Act.
______
By Mr. SCHUMER:
S. 637. A bill to amend title 18, United States Code, to regulate the
transfer of firearms over the Internet, and for other purposes; to the
Committee on the Judiciary.
The Internet Gun Trafficking Act of 1999
Mr. SCHUMER. Mr. President, today I am introducing the
Internet Gun Trafficking Act of 1999. The Act would plug a gaping
loophole in the enforcement of federal firearms laws--the ability of
felons and minors to find guns for sale on-line and illegally acquire
those guns without detection.
The Internet affords computer users--including children and felons--
easier-than-ever access to individuals offering firearms for sale. It
also facilitates firearms transactions in which sellers and buyers need
not meet face-to-face. For these reasons, individuals who are legally
prohibited from purchasing or selling firearms can turn to the Internet
to find others willing to engage in gun transactions with them--either
knowing or not knowing of the illegality of such transactions. Unlike
firearms sales at gun dealerships and even gun shows, illegal Internet
firearms sales occur ``sight unseen,'' thus presenting significant
enforcement challenges for federal, state and local authorities.
In particular, a number of Internet web-sites are designed
specifically to allow individuals who are not licensed firearms dealers
to offer their firearms for sale. These individuals post phone numbers
or e-mail addresses by which potential buyers may contact them.
Unfortunately, the operators of these web-sites do not monitor the
interactions between firearms sellers and buyers. Thus, sellers and
buyers may with ``no-questions-asked'' and little prospect of detection
evade laws prohibiting sales of certain types of firearms, prohibiting
firearms sales to felons and minors, and prohibiting the direct
shipment of firearms to unlicensed persons.
Last month, eBay--a popular on-line auction site that had allowed
users to list firearms for sale--changed its policy to prohibit
auctions selling firearms, explaining: ``The current laws governing the
sale of firearms were created for the non-Internet sale of firearms.
These laws may work well in the real world, but they work less well for
the on-line trading of firearms, where the seller and the buyer rarely
meet face-to-face. The on-line seller cannot readily guarantee that the
buyer meets all the qualifications and complies with the laws governing
the sale of firearms.''
The Internet Gun Trafficking Act of 1999 would end the unlicensed
sale of firearms using the Internet.
First, it would require anyone who operates an Internet web-site
which offers firearms for sale or otherwise facilitates the sale of
firearms posted or listed on the web-site to become a federally
licensed firearms manufacturer, importer, or dealer. Currently, persons
who operate web-sites that post classified advertisements for the sale
of hundreds of firearms need not be licensed under federal law, even
though such sales may be intricately linked to their trade or business
and provide them with substantial profits. Requiring these persons to
secure a federal firearms license would, among other things, enable
them to more actively monitor firearms transactions facilitated by
their web-sites.
Second, it would require anyone who operates an Internet web-site
which offers firearms for sale or otherwise facilitates the sale of
firearms posted or listed on the web-site to notify the Secretary of
the Treasury of the address of the web-site. This requirement aims to
facilitate necessary law enforcement investigations of Internet
firearms sales.
Third, it would require anyone who operates an Internet web-site
which posts or lists firearms for sale on behalf of other persons to
serve as a ``middleman'' for any resulting gun transactions. Under the
bill, the web-site operators in question would do this by, first,
prohibiting the posting of information on these sites that would enable
prospective firearms sellers and buyers to contact one another directly
(such as phone numbers or e-mail addresses), and thus bypass
involvement by web-site operators, and, second, requiring that all
firearms sold as a result of being listed on their web-sites be shipped
to them, as federally licensed firearms dealers, rather than directly
to the buyers. Once the operator of the web-site received a firearm
from the seller, it would have to comply with federal firearms laws in
transferring the firearm to the buyer, including laws requiring that
firearms be shipped to a licensed dealer in an unlicensed buyer's state
rather than directly to an unlicensed buyer.
And fourth, it would prohibit unlicensed individuals who offer
firearms for sale on ``gun show'' web-sites from shipping firearms sold
as a result of being listed on such web-sites to anyone other than the
web-site operator.
Certainly, there is much to embrace about the Internet. It
facilitates commercial competition and places a wealth of valuable and
formerly inaccessible information at the fingertips of computer users.
But as we praise this important new medium of communication and
commerce, we cannot afford to ignore its potential for facilitating
illegal and dangerous conduct. I believe that the Internet Gun
Trafficking Act of 1999 is a measured and appropriate response to the
challenges posed by the Internet to the enforcement of federal firearms
laws. I ask unanimous consent that the text of the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 637
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Internet Gun Trafficking Act
of 1999''.
SEC. 2. REGULATION OF INTERNET FIREARMS TRANSFERS.
(a) Prohibitions.--Section 922 of title 18, United States
Code, is amended by inserting after subsection (y) the
following:
``(z) Regulation of Internet Firearms Transfers.--
``(1) In general.--It shall be unlawful for any person to
operate an Internet website, if a purpose of the website is
to offer 1 or more firearms for sale or exchange, or is to
otherwise facilitate the sale or exchange of 1 or more
firearms posted or listed on the website, unless--
``(A) the person is licensed as a manufacturer, importer,
or dealer under section 923;
``(B) the person notifies the Secretary of the Internet
address of the website, and any other information concerning
the website as the Secretary may require by regulation; and
``(C) if any firearm posted or listed for sale or exchange
on the website is not from the business inventory or personal
collection of that person--
``(i) the person, as a term or condition for posting or
listing the firearm for sale or exchange on the website on
behalf of a prospective transferor, requires that, in the
event of any agreement to sell or exchange the firearm
pursuant to that posting or listing, the firearm be
transferred to that person for disposition in accordance with
clause (iii);
``(ii) the person prohibits the posting or listing on the
website of any information (including any name, nickname,
telephone number, address, or electronic mail address) that
is reasonably likely to enable the prospective transferor and
prospective transferee to contact one another directly prior
to the shipment of the firearm to that person under clause
(i), except that this clause does not include any information
relating solely to the manufacturer, importer, model,
caliber, gauge, physical attributes, operation, performance,
or price of the firearm; and
``(iii) with respect to each firearm received from a
prospective transferor under clause (i), the person--
[[Page S2777]]
``(I) enters such information about the firearm as the
Secretary may require by regulation into a separate bound
record;
``(II) in transferring the firearm to any transferee,
complies with the requirements of this chapter as if the
firearm were being transferred from the business inventory of
that person; and
``(III) if the prospective transferor does not provide the
person with a certified copy of a valid firearms license
issued to the prospective transferor under this chapter,
submits to the Secretary a report of the transfer or other
disposition of the firearm on a form specified by the
Secretary, which report shall not include the name of, or any
other identifying information relating to, the transferor.
``(2) Transfers by persons other than licensees.--It shall
be unlawful for any person who is not licensed under section
923 to transfer a firearm pursuant to a posting or listing of
the firearm for sale or exchange on an Internet website
described in paragraph (1) to any person other than the
operator of the website.''.
(b) Penalties.--Section 924(a) of title 18, United States
Code, is amended by adding at the end the following:
``(7) Whoever willfully violates section 922(z)(2) shall be
fined under this title, imprisoned not more than 2 years, or
both.''.
____________________