[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.''.

                          ____________________