[Congressional Record Volume 145, Number 64 (Wednesday, May 5, 1999)]
[House]
[Pages H2655-H2771]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1230
                     BANKRUPTCY REFORM ACT OF 1999

  The SPEAKER pro tempore (Mrs. Emerson). Pursuant to House Resolution 
158 and rule XVIII, the Chair declares the House in the Committee of 
the Whole House on the State of the Union for the consideration of the 
bill, H.R. 833.

                              {time}  1230


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 833) to amend title 11 of the United States Code, and for further 
purposes, with Mr. Nethercutt in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Pennsylvania (Mr. Gekas) and the 
gentleman from Michigan (Mr. Conyers) each will control 30 minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Gekas).
  Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the Constitution of the United States guarantees that 
bankruptcy shall be available to the citizens of our Nation. 
Accordingly, Congresses, ever since the first moment of our new land, 
have incorporated into their work special provisions to accommodate 
those individuals who find themselves totally engulfed by debt rather 
than to submit them to the prison dungeons that were the plight of 
people previously prior to the United States.
  We, our enlightened forefathers, saw fit to allow the Congress to 
evolve in a situation in which a fresh start would be accorded to an 
ordinary citizen who cannot meet his obligations; and that is where we 
are here today.
  We, in a long line of congressional action, re-guarantee the fresh 
start to individuals who become so engulfed in debt that there is no 
other way except for the Government to discharge their obligations and 
to allow them to start all over again. We guarantee that in this bill.
  But to balance that situation, we also provide in this bill a 
mechanism whereby if those individuals who file for bankruptcy can, 
after a careful screening, be placed in a situation where they could 
repay some of the debt over a period of years, then this bill 
accommodates that and allows people to be moved from Chapter 7, where 
they would have gotten that fresh start automatically, to Chapter 13, 
where they must work through a plan for repayment of some of the debt 
over a period of time.
  Now, here is the thing that we must make clear to the opponents of 
bankruptcy reform and to the people of our country. We are talking 
about a dividing line caused by the median income. We provide that the 
median income shall be the dividing line.
  In other words, people under the median income in our country who 
apply for bankruptcy almost certainly will be accorded almost 
automatically the fresh start which their financial circumstances 
dictate. But we also said that if the income is over the median income, 
then that set of financial circumstances should be more closely 
scrutinized to determine if any money can be repaid to this debt that 
has been accumulated. That is a very balanced and a fair way to 
approach the economic system of our Nation.
  And what is that median income? We are talking about a median income 
of $51,000 for a family of four is the starting point. So if an 
individual with four people in the family is earning $30,000 or $40,000 
or $50,000, that fresh start is guaranteed. But if they are earning 
$55,000, $60,000, $80,000, $100,000 or beyond, then that set of 
finances has to be looked at more closely under the provisions of our 
bill to see if anything should be used for repayment of some of the 
debt. That is fair. That is proper.
  The more we do that, the less burden the rest of the taxpayers have 
to bear. Because the taxpayers have to pick up the slack. Consumers at 
the retail outlets, at the supermarkets, have to pay more. Interest 
rates go up, etc. The more we are able to recoup some of the debt from 
the high-income people, the less the burden will be on the rest of the 
public.
  That is what the clear message is of the bankruptcy reform 
legislation which we have before the House today. I ask for an 
overwhelming vote in support of the underlying bill.
  Mr. Chairman, I include for the Record the following letters:
                                         House of Representatives,


                                        Committee on Commerce,

                                      Washington, DC, May 3, 1999.
     Hon. Henry Hyde,
     Chairman, Committee on the Judiciary, Rayburn House Office 
         Building, Washington, DC.
       Dear Henry: I am writing with regard to H.R. 833, the 
     Bankruptcy Reform Act of 1999. As you know, the regulation of 
     securities and exchanges is a matter committed to the 
     jurisdiction of the Committee on Commerce pursuant to Rule X 
     of the Rules of the House of Representatives.
       Section 1011 of H.R. 833, as ordered reported (``SIPC 
     Stay''), amends the Securities Investor Protection Act of 
     1970 (P.L. 91-598), a statute within the jurisdiction of the 
     Committee on Commerce. As you will recall, this provision was 
     originally contained in the Financial Contract Netting 
     Improvement Act of 1998, introduced in the 105th Congress as 
     H.R. 4393 and on which the Committee on Commerce received an 
     additional referral of the bill upon its introduction, as did 
     the Committee on the Judiciary.
       Because of the importance of this legislation, I recognize 
     your desire to bring it before the House in an expeditious 
     manner, and I will not exercise the Committee's right to a 
     sequential referral. By agreeing to waive its consideration 
     of the bill, however, the Commerce Committee does not waive 
     its jurisdiction over H.R. 833. In addition, the Commerce 
     Committee reserves its authority to seek conferees on any 
     provisions of the bill that are within its jurisdiction 
     during any House-Senate conference that may be convened on 
     this legislation. I ask for your commitment to support any 
     request by the Commerce Committee for conferees on H.R. 833 
     or similar legislation.
       I request that you include this letter and your response as 
     part of the Record during consideration of the legislation on 
     the House floor.
       Thank you for your attention to these matters. I remain,
           Sincerely,
                                                       Tom Bliley,
     Chairman.
                                  ____

                                         House of Representatives,


                                   Committee on the Judiciary,

                                      Washington, DC, May 3, 1999.
     Hon. Tom Bliley,
     Chairman, Committee on Commerce, House of Representatives, 
         Rayburn House Office Building, Washington, DC.
       Dear Tom: Thank you for your letter regarding your 
     Committee's jurisdictional interest in H.R. 833, the 
     Bankruptcy Reform Act of 1999.
       I acknowledge your committee's jurisdiction over section 
     1011 (``SIPC Stay'') of this legislation and appreciate your 
     cooperation in moving the bill to the House floor 
     expeditiously. I agree that your decision to forgo further 
     action on the bill will not prejudice the Commerce Committee 
     with respect to its jurisdictional prerogatives on this or 
     similar provisions, and will support your request for 
     conferees on those provisions within the Committee on the 
     Commerce's jurisdiction should they be the subject of a 
     House-Senate conference. I will also include a copy of your 
     letter and this response in the Congressional Record when the 
     legislation is considered by the House.
       Thank you again for your cooperation.
           Sincerely,
                                                    Henry J. Hyde,
                                                         Chairman.

[[Page H2656]]

     
                                  ____
                                                    U.S. Congress,


                                  Congressional Budget Office,

                                      Washington, DC, May 5, 1999.
     Hon. Henry J. Hyde,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for H.R. 833, the 
     Bankruptcy Reform Act of 1999.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contacts are Susanne 
     S. Mehlman (for federal costs), who can be reached at 226-
     2860, Lisa Cash Driskill (for the state and local impact), 
     who can be reached at 225-3220, and John Harris (for the 
     private-sector impact), who can be reached at 226-6910.
           Sincerely,
                                                 Barry B. Anderson
                                   (For Dan L. Crippen, Director).
       Enclosure.

         CONGRESSIONAL BUDGET OFFICE COST ESTIMATE, MAY 5, 1999

                H.R. 833: Bankruptcy Reform Act of 1999

(As reported by the House Committee on the Judiciary on April 28, 1999)


                                SUMMARY

       H.R. 833 would make many changes and additions to the laws 
     relating to bankruptcy, including establishing a system of 
     means-testing for determining eligibility for relief under 
     chapter 7 of the U.S. bankruptcy code. CBO estimates that 
     implementing H.R. 833 would cost $333 million over the 2000-
     2004 period--$322 million in discretionary spending, subject 
     to appropriation of the necessary funds, and $11 million in 
     mandatory spending. CBO also estimates that enacting this 
     bill would decrease receipts by about $4 million over the 
     next five years. Because the bill would affect direct 
     spending and governmental receipts, pay-as-you-go procedures 
     would apply. Provisions in title VIII also would affect 
     receipts, but the Joint Committee on Taxation (JCT) has not 
     completed an estimate of such changes at this time.
       H.R. 833 contains an intergovernmental mandate as defined 
     in the Unfunded Mandates Reform Act (UMRA), but its costs 
     would be insignificant and would not exceed the threshold 
     established in that act ($50 million in 1996, adjusted 
     annually for inflation). Overall, CBO expects that enacting 
     this bill would benefit state and local governments by 
     enhancing their ability to collect outstanding obligations in 
     bankruptcy cases.
       H.R. 833 would impose new private-sector mandates, as 
     defined in UMRA, on bankruptcy attorneys, creditors, and 
     credit and charge-card companies. CBO estimates that the 
     costs of these mandates would exceed the $100 million (in 
     1996 dollars) threshold established in UMRA.


               DESCRIPTION OF THE BILL'S MAJOR PROVISIONS

       In addition to establishing means-testing for determining 
     eligibility for chapter 7 bankruptcy relief, H.R. 833 would: 
     Require the Executive Office for the United States Trustees 
     (U.S. Trustees) to establish a test program to educate 
     debtors on financial management; authorize 18 new temporary 
     judgeships and extend five existing judgeships in 19 federal 
     districts; permit courts to waive chapter 7 filing fees and 
     other fees for debtors who could not pay such fees in 
     installments; require that at least one out of every 250 
     bankruptcy cases under chapter 13 or chapter 7 be audited by 
     an independent certified public accountant; exempt chapter 11 
     debtors from having to pay certain fees in connection with 
     their bankruptcy cases; require the Administrative Office of 
     the United States Courts (AOUSC) to receive and maintain tax 
     returns for all chapter 7 and chapter 13 debtors; and require 
     the AOUSC and the U.S. Trustees to collect and publish 
     certain statistics on bankruptcy cases.
       Other provisions would make various changes affecting the 
     bankruptcy provisions for municipalities and the treatment of 
     tax liabilities in bankruptcy cases.


                estimated cost to the federal government

       As shown in the following table, CBO estimates that 
     implementing H.R. 833 would cost the courts, the AOUSC, and 
     the U.S. Trustees $24 million in fiscal year 2000 and $322 
     million over the 2000-2004 period, subject to appropriation 
     of the necessary funds. In addition, we estimate that 
     mandatory spending for the salaries and benefits of 
     bankruptcy judges would increase by less than $500,000 in 
     2000 and $11 million over the 2000-2004 period. Enacting the 
     means-testing and fee waiver provisions in title I would 
     result in a net loss in revenues of about $4 million over the 
     next five years. The costs of this legislation fall within 
     budget function 750 (administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                          ------------------------------------------------------
                                                              2000       2001       2002       2003       2004
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Means-Testing (Section 102):
    Estimated Authorization Level........................          4          8          8          8          7
    Estimated Outlays....................................          4          8          8          8          7
Debtor Financial Management Training (Section 104):
    Estimated Authorization Level........................          4          0          0          0          0
    Estimated Outlays....................................          1          3          0          0          0
Additional Judgeships--Support Costs (Section 128):
    Estimated Authorization Level........................      (\1\)          6         11         11         12
    Estimated Outlays....................................      (\1\)          6         11         11         12
Chapter 7 Filing Fee Waivers (Section 148):
    Estimated Authorization Level........................          2          5          8         13         13
    Estimated Outlays....................................          2          5          8         13         13
Credit Counseling Certification (Section 302):
    Estimated Authorization Level........................          4          3          3          4          4
    Estimated Outlays....................................          2          4          3          4          4
U.S. Trustee Site Visits (Section 410):
    Estimated Authorization Level........................          3          2          2          2          3
    Estimated Outlays....................................          1          4          2          2          3
Audit Procedures (Section 602):
    Estimated Authorization Level........................          0          6         15         18         19
    Estimated Outlays....................................          0          6         15         18         19
Maintenance of Tax Returns (Section 603):
    Estimated Authorization Level........................          3          6          7          9          9
    Estimated Outlays....................................          3          6          7          9          9
Elimination of Quarterly Filing Fees (Section 608):
    Estimated Authorization Level........................         10         10         10         10         10
    Estimated Outlays....................................         10         10         10         10         10
GAO and SBA Studies (Sections 609, 613, 414):
    Estimated Authorization Level........................          1      (\1\)          0          0          0
    Estimated Outlays....................................          1      (\1\)          0          0          0
Compiling and Publishing Data (Sections 701-702):
    Estimated Authorization Level........................          0          5          9          8          8
    Estimated Outlays....................................          0          5          9          8          8
                                                          ------------------------------------------------------
        Total Discretionary Changes:
    Estimated Authorization Level........................         31         51         73         83         85
    Estimated Outlays....................................         24         57         73         83         85
 
                                           CHANGES IN DIRECT SPENDING
 
Additional Judgeships (Section 128):
    Estimated Budget Authority...........................      (\1\)          2          3          3          3
    Estimated Outlays....................................      (\1\)          2          3          3          3
 
                                             CHANGES IN REVENUES \2\
 
Changes in Filing Fees (Section 102): Estimated Revenues.          0          0      (\1\)          1          1
Chapter 7 Filing Fee Waivers (Section 148): Estimated          (\1\)         -1         -1         -2         -2
 Revenues................................................
                                                          ------------------------------------------------------
Total Revenue Changes: Estimated Revenues................      (\1\)         -1         -1         -1         -1
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.
\2\ The Joint Committee on Taxation has not yet completed its review of tax provisions in title VIII.

                           basis of estimate

       For purposes of this estimate, CBO assumes that H.R. 833 
     will be enacted by October 1, 1999, and that all estimated 
     authorization amounts will be appropriated for each fiscal 
     year.
       Spending Subject to Appropriation. Most of the estimated 
     increases in discretionary spending would be required to fund 
     the additional workload that would be imposed on the U.S. 
     Trustees. Currently, the U.S. Trustees are funded through the 
     bankruptcy-related fees collected by the courts. Without 
     additional statutory authority, these fees

[[Page H2657]]

     cannot be increased to cover any expenditures or loss of 
     offsetting collections that would occur under the bill. 
     Because the legislation does not provide for such increases 
     in fees, any additional costs would be subject to the 
     availability of appropriated funds.
       Means-Testing (Section 102). This section would establish a 
     system of means-testing for determining a debtor's 
     eligibility for relief under chapter 7. Only those debtors 
     whose income exceeds the regional median household income 
     with certain adjustments would be subject to the means test. 
     Under the means test, if the debtor is expected to have at 
     least $6,000 over five years (after the deduction of certain 
     allowable expenses) available to pay nonpriority unsecured 
     claims, then the debtor would be presumed ineligible for 
     chapter 7 relief. A debtor who could not demonstrate 
     ``extraordinary circumstances,'' which would cause the 
     expected disposable income to fall below the threshold, could 
     file under other chapters of the bankruptcy code.
       Although the private trustees would be responsible for 
     conducting the initial review of a debtor's income and 
     expenses and filing the majority of motions for dismissal or 
     conversion, CBO expects that the workload of the U.S. 
     Trustees would increase under the means-testing provisions. 
     The U.S. Trustees would provide increased oversight of the 
     work performed by the private trustees, file additional 
     motions for dismissal or conversions, and take part in 
     additional litigation that is expected to occur as the courts 
     and debtors debate allowable expenses and other related 
     issues. Although CBO cannot predict the amount of such 
     litigation, we expect that, during the first few years 
     following enactment of the bill, the amount of litigation 
     could be significant, as parties test the new law's 
     standards. In subsequent years, litigation could begin to 
     subside as precedents are established. Based on information 
     from the U.S. Trustees, CBO estimates that the U.S. Trustees 
     would require about 60 additional attorneys and analysts to 
     address the increased workload. As a result, CBO estimates 
     that appropriations of $35 million would be required over the 
     next five years.
       Debtor Financial Management Test Training Program (Section 
     104). This section would require the U.S. Trustees to 
     establish a test training program to educate debtors on 
     financial management. Based on information from the U.S. 
     Trustees, CBO estimates that about 90,000 debtors would 
     participate if such a program were administered by the U.S. 
     Trustees in fiscal year 2001. At a projected cost of about 
     $40 per debtor, CBO estimates that the U.S. Trustees would 
     require an appropriation of about $4 million in 2000 to 
     administer the program.
       Addtional Judgeships--Support Costs (Section 128). This 
     provision would extend five temporary bankruptcy judgeships 
     and authorize 18 new temporary bankruptcy judgeships for 19 
     federal judicial districts. Based on information from the 
     AOUSC, CBO assumes that one-half of the 18 new positions 
     would be filled by the beginning of fiscal year 2001 and the 
     other half would be filled by the start of fiscal year 2002. 
     Also, we anticipate that all five temporary judgeships would 
     be filled by fiscal year 2002. We expect that discretionary 
     expenditures associated with each judgeship would average 
     about $450,000 (in 2000 dollars), after initial costs of 
     about $50,000. Therefore, CBO estimates that the 
     administrative support of additional bankruptcy judges would 
     require an appropriation of less than $500,000 in fiscal 
     year 2000 and about $40 million over the 2000-2004 period. 
     (Salaries and benefits for the judges are classified as 
     mandatory spending, and those costs are described below.)
       Chapter 7 Filing Fee Waivers (Section 148). This section 
     would permit a bankruptcy court or district court to waive 
     the chapter 7 filing fee and other fees for a debtor who is 
     unable to pay such fees in installments. Based on information 
     from the AOUSC, CBO expects that in fiscal year 2000 chapter 
     7 filing fees would be waived for about 3.5 percent of all 
     chapter 7 filers and that the percentage waived would 
     gradually increase to about 10 percent by fiscal year 2003. 
     The filing fee for a chapter 7 case is $130, and income from 
     this fee appears in two different places in the budget. Of 
     the $130, $70 is recorded as part of the offsetting 
     collections to the U.S. Trustee System Fund and to the AOUSC, 
     and $15 is recorded as governmental receipts (i.e., 
     revenues). the remaining $45 is paid to the private trustee 
     assigned to the case and does not affect the federal budget. 
     The AOUSC also collects an additional $30 million in 
     miscellaneous fees with each chapter 7 filing. Taking into 
     account how means-testing would reduce filing rates under 
     chapter 7, CBO estimates that implementing this section would 
     result in a loss in offsetting collections totaling $41 
     million over the 2000-2004 period. The loss of offsetting 
     collections would reduce the amount available for spending by 
     the U.S. Trustees and the AOUSC. Because this loss of fees 
     would not be matched by a reduction in workload, additional 
     appropriations would be required to replaced this projected 
     loss.
       Credit Counseling Certification (Section 302). This section 
     would require the U.S. Trustees to certify, on an annual 
     basis, that certain credit counseling services could provide 
     adequate services to potential debtors. Based on information 
     from the U.S. Trustees, CBO estimates that the U.S. Trustees 
     would require additional attorneys and analysts to handle the 
     additional workload associated with certification. CBO 
     estimates that enacting this provision would require 
     appropriations of $18 million over the next five years.
       U.S. Trustee Site Visits in Chapter 11 Cases (Section 410). 
     This section would expand the responsibilities of the U.S. 
     Trustees in small business bankruptcy cases to include site 
     visits to inspect the debtor's premises, review records, and 
     verify that the debtor has filed tax returns. Based on 
     information from the U.S. Trustees, CBO estimates that 
     implementing section 410 would require about 20 additional 
     analysts to conduct over 2,300 site visits each year. CBO 
     estimates that the U.S. Trustees would require appropriations 
     of about $12 million over the next five years for the 
     salaries, benefits, and travel expenses associated with these 
     additional personnel.
       Audit Procedures (Section 602). Beginning 18 months after 
     enactment, H.R. 833 would require that at least one out of 
     every 250 bankruptcy cases under chapter 7 and chapter 
     13, plus other selected cases under those chapters, be 
     audited by an independent certified public accountant. 
     Based on information from the U.S. Trustees, CBO estimates 
     that about 1.3 million cases would be subject to audits in 
     fiscal year 2001, increasing to about 1.8 million in 
     fiscal year 2004. CBO assumes that about 0.8 percent of 
     all cases would be audited and that each audit would cost 
     about $1,000 (in 2000 dollars.) CBO also expects that the 
     U.S. Trustees would need about 10 additional analysts and 
     attorneys to support the follow-up work associated with 
     the audits. Thus, we estimate that implementing this 
     provision would require appropriations of $6 million in 
     fiscal year 2001 and $58 million over the 2000-2004 
     period.
       Maintenance of Tax Returns (Section 603). This section 
     would require the AOUSC to receive and retain tax returns for 
     the three most recent years preceding the commencement of the 
     bankruptcy case for all chapter 7 and chapter 13 debtors 
     (about 8 million debtors over the 2004-2004 period). CBO 
     estimates that appropriations of $34 million over the next 
     five years would be required to store and provide access to 
     over 20 million tax returns.
       Elimination of Quarterly Filing Fees (Section 608). This 
     section would require chapter 11 debtors whose disbursements 
     are less than $300,000 to pay quarterly fees only until their 
     case is converted or their plan is confirmed (whichever 
     occurs first), beginning on October 1, 1999. Currently, these 
     debtors pay quarterly fees even after their plan has been 
     confirmed. These fees are recorded as offsetting collections 
     to the U.S. Trustee System Fund and are available for 
     spending from that account. According to the U.S. Trustees, 
     about 4,000 cases would be affected by this provision each 
     year and, on average, the government collects about $650 per 
     quarter per case each year. Thus, by shortening the period 
     during which fees are paid, the bill would reduce annual fee 
     collections by about $10 million annually. Because this loss 
     of offsetting collections would reduce the amount available 
     for spending by the U.S. Trustees (for overall supervision 
     and administration of bankruptcy cases), CBO estimates that 
     the U.S. Trustees would require an appropriation of $10 
     million in fiscal year 2000 and $50 million over the next 
     five years to compensate for the loss of quarterly filing 
     fees.
       General Accounting Office (GAO) and Small Business 
     Administration (SBA) Studies (Sections 609, 613, and 414). 
     Section 609 would require GAO to conduct a study regarding 
     the impact that the extension of credit to dependents who are 
     enrolled in postsecondary educational institutions has on 
     bankruptcy filing rates. Section 613 would require GAO to 
     conduct a study regarding the feasibility of requiring 
     trustees to provide the Office of Child Support Enforcement 
     information about outstanding child support obligations of 
     debtors. Section 414 would require the Administrator of SBA, 
     in consultation with the Attorney General, the U.S. Trustees, 
     and the AOUSC, to conduct a study on small business 
     bankruptcy issues. Based on information from GAO and SBA, CBO 
     estimates that completing the necessary studies would cost 
     between $500,000 and $1 million in 2000, and less than 
     $500,000 in 2001.
       Compilation and Publication of Bankruptcy Data and 
     Statistics (Sections 701-702). H.R. 833 would require the 
     AOUSC to collect data on chapter 7, chapter 11, and chapter 
     13 cases and the U.S. Trustees to make such information 
     available to the public. CBO estimates that appropriations of 
     about $30 million would be required over the 2000-2004 period 
     to meet these requirements. Of the total estimated cost, 
     about $24 million would be required for additional legal 
     clerks, analysts, and data base support. The remainder would 
     be incurred by the U.S. Trustees for compiling data and 
     providing Internet access to records pertaining to bankruptcy 
     cases.

     DIRECT SPENDING AND REVENUES

       Additional Judgeships (Section 128). CBO estimates that 
     enacting the means-testing provision (section 102) would 
     impose some additional workload on the courts. Section 128 
     would authorize 18 new temporary bankruptcy judgeships and 
     extend five existing temporary judgeships. Based on 
     information from the AOUSC and other bankruptcy experts, CBO 
     expects that the increase in the number of bankruptcy judges 
     would be sufficient to meet the increased workload. Assuming 
     that the salary and benefits of a bankruptcy judge would 
     average about $150,000 a year, CBO estimates that the 
     mandatory costs associated with the salaries and benefits of 
     these additional judgeships would be less than $500,000 in 
     fiscal year 2000 and about $11 million over the 2000-2004 
     period.
       Changes in Filing Fees (Section 102). The means-testing 
     provision also could affect the

[[Page H2658]]

     government's income from bankruptcy filing fees because it 
     would cause changes in the number and type of bankruptcy 
     filings. CBO projects that about 5 to 10 percent of all 
     chapter 7 debtors (about 50,000 to 100,000 cases each year) 
     could be subject to the means test proposed under this bill. 
     CBO expects that those debtors who are not successful in 
     proving ``extraordinary circumstance'' will either convert 
     their cases to chapter 13 cases or withdraw their petitions 
     for bankruptcy relief. Under either of these options, CBO 
     estimates that there would be no significant effect on the 
     federal budget because there is no fee for converting a case 
     from chapter 7 to chapter 13, and filing fees are not 
     refunded to debtors who withdraw their petitions for 
     bankruptcy relief. Over the long term, CBO estimates that the 
     federal government could collect additional revenues as more 
     debtors file directly under chapter 13. (The government 
     collects an additional $45 for each case filed under chapter 
     13 instead of chapter 7.) This increase could be partly 
     offset by those debtors who might refrain from filing for any 
     type of bankruptcy relief. On balance, CBO estimates that the 
     means-testing provision would increase revenues by about $1 
     million beginning in 2003. This provision would have no 
     effect on offsetting collections because there is no 
     difference in the amount of offsetting collections 
     collected under either chapter 7 or chapter 13, and any 
     loss in collections would be matched by a reduction in 
     workload.
       Chapter 7 Filing Fee Waivers (Section 148). As mentioned 
     above, this section would permit a bankruptcy court or the 
     district court to waiver the chapter 7 filing fee and other 
     fees for a debtor who is unable to pay such fees in 
     installments. For each chapter 7 case filed, the federal 
     government collects $15. Taking into account the means-
     testing provision and the amount of expected waivers, CBO 
     estimates that implementing this section would result in a 
     loss in revenues of $1 million to $2 million a year beginning 
     in fiscal year 2001.
       CBO estimates that the net effect on revenues of 
     implementing the meanstesting and fee waiver provisions would 
     be a loss of about $1 million annually beginning in fiscal 
     year 2001.
       Tax Provisions (Title VIII). The provisions in title VIII 
     of the bill are currently under review by the Joint Committee 
     on Taxation, and estimates of their effects on revenues will 
     be provided when they are completed.


                      PAY-AS-YOU-GO CONSIDERATIONS

       The Balanced Budget and Emergency Deficit Control Act sets 
     up pay-as-you-go procedures for legislation affecting direct 
     spending or receipts. Both the means-testing and waiver of 
     fees would affect receipts; hence, pay-as-you-go procedures 
     would apply. The net changes in outlays and governmental 
     receipts are show in the following table. (JCT is reviewing 
     title VIII and has not yet completed an estimate of its 
     effects on receipts.) For the purposes of enforcing pay-as-
     you-go procedures, only the effects in the current year, the 
     budget year, and the succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in million of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                         1999     2000     2001     2002     2003     2004     2005     2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays...................................        0        0        2        3        3        3        3        3        3        2        2
Changes in receipts\1\...............................        0        0       -1       -1       -1       -1       -1       -1       -1       -1       -1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimated impact of means-testing and waiver of fees. JCT has not completed an estimate of changes in receipts for title VIII.

        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

       H.R. 833 contains an intergovernmental mandate as defined 
     in UMRA. Overall, CBO expects that enacting this bill would 
     benefit state and local governments by enhancing their 
     ability to collect outstanding obligations in bankruptcy 
     cases.
       Mandates. Section 106 of the bill would preempt state laws 
     governing contracts between a debt relief agency and a 
     debtor, to the extent that they are inconsistent with the 
     federal requirements set forth in this bill. Such preemptions 
     are mandates as defined in UMRA. Because the preemption would 
     not require states to change their laws, CBO estimates the 
     costs to states of complying with that mandate would not be 
     significant and would not exceed the threshold established in 
     UMRA.
       Other Impacts. The changes to bankruptcy law in the bill 
     would affect state and local governments primarily as 
     creditors and holders of claims for taxes or child support. 
     In addition, it would change some of the state statutes that 
     govern which of a debtor's assets are protected from 
     creditors in a bankruptcy proceeding.
       In 1996, a survey of the 50 states conducted by the 
     Federation of Tax Administrators and the States' Association 
     of Bankruptcy Attorneys indicated that more than 360,000 
     taxpayers in bankruptcy owed claims to states totaling about 
     $4 billion. Of these claims, states reported collecting only 
     about $234 million. While CBO cannot predict how much more 
     money might be collected, it is likely that states and local 
     governments would collect a greater share of future claims 
     than they would have under current law.
       Exemptions. Although bankruptcy is regulated according to 
     federal statute, states are allowed to provide debtors with 
     certain exemptions for property, insurance, and other items 
     that are different from those allowed under the federal 
     bankruptcy code. (Exempt property remains in possession of 
     the debtor and is not available to pay off creditors.) In 
     some states debtors can choose the federal or state 
     exemption; other states require a debtor to use only the 
     state exemptions. This bill would place a ceiling of $250,000 
     on the exemptions for homesteads and create a new exemption 
     for certain retirement funds and education savings plans. 
     These exemption standards would apply regardless of the state 
     policy on exemptions. The new homestead exemption would make 
     more money available to creditors in some cases, while the 
     exemptions on retirement and education savings generally 
     would make less money available. States would be allowed 
     to set the homestead exemption above the federal ceiling 
     if they specifically enacted legislation doing so.
       Domestic Support Obligations. The bill would significantly 
     enhance a state's ability to collect domestic support 
     obligations, including child support. Domestic support 
     obligations owed to state or local governments would be given 
     priority over all other claims, except those same obligations 
     owned to individuals. The bill also would require that filers 
     under chapters 11 and 13 pay in full all domestic support 
     obligations owed to government agencies or individuals in 
     order to receive a discharge of outstanding debts. In 
     addition, the automatic stay that is triggered by filing 
     bankruptcy would not apply to domestic support obligations. 
     Last, the bill would require bankruptcy trustees to notify 
     individuals with domestic support claims of their right to 
     use the services of a state child support enforcement agency 
     and notify the agency that they have done so. The last known 
     address of the debtors would be a part of the notification.
       Tax Payment Plans. The bill would require that payment 
     plans for tax liabilities be limited to six years and that 
     payment amounts be regular and proportionate to payments for 
     other obligations. Under current law, taxing authorities 
     sometimes face payment plans that include a series of small 
     payments followed by a large balloon payment near the end of 
     the planned payment stream. At that point, the debtors often 
     fail to complete their payments. This provision would require 
     that taxes be paid at a rate proportionate to those of other 
     debts. It also would establish interest rates to be applied 
     to outstanding tax liabilities. Under current law, any 
     interest charges on outstanding tax liabilities are 
     determined at the discretion of the bankruptcy judge.
       Time Limits on Tax Collection. Under some circumstances, a 
     tax claim can qualify for priority status, and thus a state 
     and local government would be more likely to collect the 
     debt. However, this status is granted only if tax is assessed 
     within a specific period of time from the date of the filing 
     for bankruptcy. If that filing is subsequently dismissed and 
     a new filing is made, the tax claim may lose its priority 
     status. The bill would allow more time to pass in some 
     circumstances, thus increasing the likelihood that state or 
     local tax claims would maintain their priority status.
       Taxes and Administrative Expenses. Under current law, 
     certain expenses can be paid out of funds that would 
     otherwise be available to pay tax liens on property. The bill 
     would restrict the use of funds for administrative expenses 
     to a limited number of circumstances, thereby making it more 
     likely that funds would remain available to cover tax 
     obligations.
       Tax Return Filing and Government Notification. A number of 
     provisions in the bill would require debtors to have filed 
     tax returns, and in some cases to be current in their tax 
     payments, before a bankruptcy case may continue. Also, 
     debtors would be required to provide notice to state 
     authorities in a specific manner when they pursue relief 
     under bankruptcy law. These provisions would help states 
     identify potential claims in bankruptcy cases where they may 
     be owed delinquent taxes.
       Priority of Payments. In some circumstances, debtors have 
     borrowed money or incurred some new obligation that is 
     dischargeable (able to be written-off at the end of 
     bankruptcy) to pay for an obligation would not be 
     dischargeable. This bill would give the new debt the same 
     priority as the underlying debt. If the underlying debt had a 
     priority higher than that of state or local tax liabilities, 
     state and local governments could lose access to some funds. 
     However, it is possible that the underlying debt could be for 
     a tax claim, in which case the taxing authority would face no 
     loss. Because it is unclear what types of nondischargeable 
     are covered by new debt and the degree to which this new 
     provision would discourage such activity, CBO can estimate 
     neither the direction nor the magnitude of the provision's 
     impact on states and localities.
       Single Asset Cases. One provision of the bill would allow 
     expedited bankruptcy proceeding in certain single asset cases 
     (usually involving a large office building). State and

[[Page H2659]]

     local governments could benefit to the extent that real 
     property is returned to the tax rolls earlier as a result of 
     this provision.
       Municipal Bankruptcy. The bill would clarify regulations 
     governing municipal bankruptcy actions and allow 
     municipalities that have filed for bankruptcy to liquidate 
     certain financial contracts.


                 estimated impact on the private sector

       H.R. 833 would impose new private-sector mandates on 
     bankruptcy attorneys, creditors, and credit and charge-card 
     companies. Bankruptcy attorneys would be required to make 
     reasonable inquiries to confirm that the information in 
     documents they submit to the court or the bankruptcy trustee 
     is wellgrounded in fact. Creditors would be required to make 
     disclosures in their agreements with debtors and provide 
     certain notices to courts and to debtors. Credit and charge-
     card companies would be required to disclose minimum-payment 
     plans in new account materials and monthly statements. CBO 
     estimates that the costs of these mandates would exceed the 
     $100 million (in 1996 dollars) threshold established in the 
     UMRA.
       Sections 102 and 607 would make bankruptcy attorneys liable 
     for misleading statements and inaccuracies in schedules and 
     documents submitted to the court or to the trustee. To avoid 
     sanctions and potential civil penalties, attorneys would need 
     to verify the information given to them by their clients 
     regarding the list of creditors, assets and liabilities, and 
     income and expenditures. Based on 1,286,000 projected filings 
     under chapter 7 and chapter 13 and an estimated increase in 
     attorneys' costs of $150 to $500 per case, CBO estimates that 
     the costs to attorneys of complying with this requirement 
     would be between $190 million and $640 million in fiscal year 
     2000. With the rise in projected filings over the next five 
     years, annual costs would be $280 million to $940 million for 
     fiscal year 2004. CBO expects bankruptcy attorneys to pass 
     increased costs on to debtors, reducing the pool of funds 
     available to creditors.
       H.R. 833 would require a creditor with an unsecured 
     consumer debt seeking a reaffirmation agreement with a debtor 
     to notify the debtor of his right to a hearing to determine 
     whether the agreement is an undue hardship, is in the 
     debtor's best interest, or is the result of an illegal threat 
     by the creditor. The bill also would require creditors to 
     specify to the court and to the debtor the person designated 
     to receive notices. Because the required disclosure could be 
     incorporated into existing standard reaffirmation agreements, 
     and the notice to the court and the debtor would require only 
     minimal effort, the costs of this requirement would be 
     relatively small.
       The costs of the mandate for credit and charge-card 
     companies are also expected to be small. H.R. 833 would 
     require credit and charge-card companies to add a brief 
     statement regarding the function of the minimum payment 
     option and disadvantages of making only the minimum payment 
     each month to the materials provided to consumers opening new 
     accounts and to all customers' monthly statements. Credit and 
     charge-card companies also would have to provide customers 
     with an illustration of the length of time required to pay 
     off a $500 balance if they make only the minimum required 
     payment. Firms would be able to add this information to the 
     materials they currently give to customers.
       Estimate prepared by: Federal Costs: Susanne S. Mehlman 
     (226-2860); Impact on State, Local, and Tribal Governments: 
     Lisa Cash Driskill (225-3220); Impact on the Private Sector: 
     John Harris (226-6910).
       Estimate approved by: Paul N. Van de Water, Assistant 
     Director for Budget Analysis.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  (Mr. CONYERS asked and was given permission to revise and extend his 
remarks.)
  Mr. CONYERS. Mr. Chairman, I am delighted to begin immediately by 
talking about the means test and other consumer provisions that will 
harm middle-income and low-income people.
  Because contrary to the assertion of my friend, the gentleman from 
Pennsylvania (Mr. Gekas), that this is going to make it better, the 
means test is going to make it worse. It is incorrect to assume that 
the effect of this bill's harmful provisions would be limited to 
individuals seeking bankruptcy relief who earned more than the regional 
median income.
  First, there are numerous significant flaws in the manner in which 
the median income is calculated. For example, the median income figure 
required under this bill will be outdated and understated. This is 
because the bill states that the household income is to be based on the 
most recent census figures available as of January 1. But as of January 
1, the census has information available for only the second year prior 
to the date.
  Accordingly, during this year, 1999, census figures will be available 
only for 1997. At times of inflation, this 2-year lag could result, 
obviously, in a significant increase in the number of individuals who 
are subject to the motions to dismiss or convert and who may earn more 
than the outdated median-income figure.
  Another flaw in the median-income formula is that the test measures a 
debtor's income based on how much the debtor earned 6 months prior to 
bankruptcy. If the debtor lost a good job in month three and has been 
working at a low-wage job ever since, the income from that good job and 
the help from family members would be counted as if that is what his 
future income would be.
  In addition, this bill, unlike current law, will permit creditors and 
other parties and interests to bring motions to dismiss more 
aggressively; and well-funded creditors will have extremely wide 
latitude to use such motions as a tool for making bankruptcy an 
expensive, protracted, contentious process for honest debtors, their 
families and other creditors.
  Now, the bill is opposed by a growing number of Members of the House 
of Representatives for the simple reason this bill is worse than the 
bill we voted on in the last Congress; and it is bad for women, 
children, working Americans. But the good news, if this is good news 
for them in the credit card industry, it is good for the credit card 
industry.
  This means test is fatally flawed. The legislation attempts to impose 
a one-size-fits-all income and expense test based on IRS standards to 
determine who is eligible for bankruptcy relief and how much they may 
be required to pay their creditors.
  The problem is that the formula fails to take into account such 
important items as child care payments, health care costs, and the 
costs of taking care of ill parents, to name but a few of the glaring 
loopholes. The IRS standards are so extreme that they have been 
rejected by the Congress and abandoned by the IRS; and, yet, the credit 
card companies would have them apply them in bankruptcy.
  Now, the denials have been pouring in pretty fast here so far; and 
there is going to be a lot of discussion about how the bill is 
devastating to children and women reliant on child care and alimony 
payments. Repeat: The bill is devastating to children and women reliant 
on child care and alimony payments.
  On the debtor's side, the legislation makes it far more difficult for 
single mothers to access the bankruptcy similar. On the creditor's 
side, the bill pits sophisticated credit card creditors in direct 
competition with alimony and child support. The attempts to fix this 
incorporated into the legislation are not effective and are largely 
redundant.
  And, third, but not finally, but I am going to stop here, the bill 
will also lead to a loss of jobs and collective bargaining rights. The 
business provisions of the bill will impose harsh new time deadlines 
and massive new legal and paperwork requirements on small businesses 
and real estate concerns and, by design, will lead to premature 
liquidation of job loss.
  This is why the largest collective bargaining organization in America 
has asserted that the legislation will restrict the workings of 
bankruptcy cases for small businesses and place numerous jobs at risk.
  Now, the bill conveniently ignores the real problem of what has 
caused more bankruptcies, namely, the problem of credit card abuse. And 
is there any colleague here that does not get credit card applications 
monthly, weekly, occasionally daily? And, at the same time, the 
legislation responds to every conceivable debtor excess, real or 
imagined. It gives a complete pass to the transgressions of the credit 
card industry.
  My colleagues should be on the alert. This Bankruptcy Reform Act 
legislation of the 106th Congress will worsen the conditions of those 
few people in their district, working people, honest people, who may 
need to access this important court. Please remember, this bill is 
worse than the bill we had last year.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GEKAS. Mr. Chairman, I yield 4 minutes to the gentleman from 
Virginia (Mr. Boucher).
  (Mr. BOUCHER asked and was given permission to revise and extend his 
remarks.)

[[Page H2660]]

  Mr. BOUCHER. Mr. Chairman, I want to express thanks to the gentleman 
from Pennsylvania for yielding me this time.
  I am pleased to rise in strong support of the adoption of this much-
needed reform to our Nation's bankruptcy laws.
  In an era in which disposable incomes are growing, unemployment rates 
are low, and the economy is strong, consumer bankruptcy filings should 
be rare. Contrary, however, to this expectation, in 1998, there were 
1.4 million personal bankruptcy files, a 40 percent increase from the 
1996 figure. In 1996, that figure reached one million for the first 
time. And, in 1998, there was a full 95 percent increase in the number 
of personal bankruptcy files from 1990.
  Bankruptcies of mere convenience are often driving this increase. 
Bankruptcy was never meant to be used as a financial planning tool, but 
it is increasingly becoming a first stop rather than a last resort, as 
many filers who could repay a substantial part of what they owe elect 
to use the complete liquidation provisions of Chapter 7 of the 
bankruptcy law, wipe out all of their debt, even that portion they 
could repay, and seek an entire fresh start.

                              {time}  1245

  Our legislation will direct more filers into Chapter 13 plans and 
make sure that those who can afford to repay a substantial part of 
their debt are required to do so.
  Mr. Chairman, this is a consumer protection measure. The typical 
American family pays a hidden tax of $550 every year arising from the 
increased costs of credit and the increases in prices for goods and 
services occasioned by the discharge in bankruptcy of $50 billion in 
consumer debt on an annual basis. By requiring that people who can 
repay a substantial part of the debt they owe do so in Chapter 13 
plans, we can greatly lessen that hidden tax, and this bill will 
accomplish that result.
  Another key point needs to be made about the legislation. The alimony 
or child support recipient is clearly better off under the terms of 
this bill than she is under present law. At the present time she stands 
seventh in the rank of priority for the payment of claims in 
bankruptcy. She is behind farmers making claims against warehouses and 
grain elevators. She is behind fishermen who make claims against their 
warehouses.
  Under this bill, the child support or alimony recipient will be 
elevated to the first priority. She will now stand number one in line 
for the payment of bankruptcy claims. And other provisions of the bill 
also make it easier for the bankrupt's assets to be paid to her.
  The gentleman from Virginia (Mr. Moran) will be offering amendments 
today that I will support and I encourage other Members to support, 
that will require greater disclosures on credit card statements of the 
costs of making the minimum monthly payment. Credit card statements 
would have to indicate that the ordinary finance charge on the 
outstanding balance would continue to accrue.
  The Moran amendment supplements other new consumer protection 
measures that are already a part of this bill. For example, credit card 
companies will be prohibited from terminating a customer's account 
simply because that customer pays his bills on time and therefore does 
not accrue finance charges. That is a very appropriate change to make 
and is one of many consumer protection measures contained in the bill.
  This is a balanced, bipartisan measure which contains new consumer 
protections and requires greater debt repayment by those who can afford 
to make that repayment. This measure, when considered on the floor of 
the House as a conference report last year, obtained the votes of 300 
of the Members, clearly demonstrating the broad bipartisan base for 
enacting this reform.
  I am pleased to be coauthoring this measure with the gentleman from 
Pennsylvania, and I want to commend him for his leadership in bringing 
this balanced and bipartisan bill to the floor. I am pleased to join 
with him in urging its passage by the House.
  Mr. CONYERS. Mr. Chairman, I yield myself 1\1/4\ minutes.
  I think it is very important that we begin to deal with the alimony 
and child support measure head-on. It has been suggested that this is 
not a problem or that it has been improved upon. But actually for women 
whose average income was at the median during the last 100 days before 
the support checks stopped or women whose child care expenses exceeded 
IRS standards, they may be denied access to Chapter 7 and forced into a 
restrictive Chapter 13 repayment plan.
  Secondly, the bill does not exempt child support or foster care 
payments from the means test definition of disposable income, and does 
not exclude alimony and child support payments received within 6 months 
after filing for bankruptcy from the property of the estate.
  How can we talk about women and children are okay? This bill is 
presently a disaster for single mothers and their children, which 
number in the alimony and child support area an estimated 243,000 to 
325,000 bankruptcy cases each year. The National Partnership for Women 
and Families have told us that the child support enforcement provision 
in the bill would not adequately protect parents and children.
  Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Virginia 
(Mr. Scott) a distinguished member of the Committee on the Judiciary.
  Mr. SCOTT. I thank the gentleman for yielding me this time.
  Mr. Chairman, this bill overturns centuries of well-established laws 
involving bankruptcy and the principle that those who are in financial 
ruin can get a fresh start if they pay all they have, with certain 
exceptions, to their creditors. Instead, they will be required for 
those affected to essentially be in debtor's prison for 5 years. Those 
who find themselves financially overwhelmed because of a loss of a job, 
illness, business failure, will not get a fresh start. They will have 
to pay every dime they have, after food and rent and a few other 
expenses, to their creditors.
  Now, that is not a fresh start. That is a guarantee that at the end 
of 5 years they will be worse off than they started. So if someone is 
stuck with bills, maybe a spouse had a business reversal, got sick, a 
spouse had joint debts and their other spouse leaves or dies, they will 
not get a fresh start. They will get no relief for 5 years.
  Now, let us not get misled by this means test where only certain 
people are affected by this legislation. All that means is that it is 
not a bad bill for everybody, it is just a bad bill for some people. 
That does not make it a good bill.
  Now, there are some technical problems with the legislation. First of 
all, the salary calculation in what you have to pay is based on the 
last 6 months. Part of the bankruptcy problem may be caused by the fact 
that you lost your job, and that calculation is obviously not 
effective. You may be forced to pay more than in fact you have as 
income. It includes as income disability benefits or veterans benefits 
which if you have another job you will essentially lose in the future, 
and it forces spouses to compete with sophisticated creditors for their 
child support.
  But fundamentally it violates centuries of laws that provide for a 
fresh start. I ask that this not happen in a haphazardly drawn bill 
that has technical problems and which is opposed by virtually every 
group of experts in bankruptcy law. Mr. Chairman, I would ask that we 
defeat this bill.
  Mr. GEKAS. Mr. Chairman, I am pleased to yield 2\1/2\ minutes to the 
gentlewoman from New Jersey (Mrs. Roukema).
  (Mrs. ROUKEMA asked and was given permission to revise and extend her 
remarks.)
  Mrs. ROUKEMA. I thank the gentleman for yielding me this time.
  Mr. Chairman, I want to offer my strong support for this legislation. 
It goes a long way to correct the problems of bankruptcy. But right now 
I want to focus on the issue of child support. I have been a pioneer in 
the efforts at reforming child support, and I served on the U.S. 
Commission for Interstate Child Support Enforcement.
  Over the last 10 years we have done a great deal to enforce child 
support and require the legal obligations, to close that enforcement 
gap. But in recent years we have learned that bankruptcy is one of the 
loopholes that has been used. Contrary to what we have heard before, as 
I view this legislation, it is strong and goes a long way toward

[[Page H2661]]

closing the enforcement gap as it relates to the child support 
component.
  This bill really deals with the issue in a substantive way. It 
includes child support payments that are moved up to number one when 
determining which debts are paid first in a bankruptcy case. It gives 
confirmation and discharge of Chapter 13 plans and makes them 
conditional upon the debtor's complete payment of child support. And 
there are other issues in here that deal directly with child support.
  But I want to particularly distinguish the reform measure that was 
led by the gentleman from Florida (Mr. Shaw) and also joined by the 
gentlewoman from Texas (Ms. Jackson-Lee), so that there was bipartisan 
support for this reform that will require the trustee to notify a 
claimant parent of the bankruptcy proceedings.
  I will not go into a lot more detail, but it is a strong bill as far 
as closing those enforcement gaps. But I do want to commend the 
gentleman from Pennsylvania (Mr. Gekas) and thank him for including my 
amendment on child support during the markup. That amendment requires 
the GAO to study the feasibility of having bankruptcy court trustees 
report the names of individuals filing bankruptcy to the Office of 
Child Support Enforcement.
  This study by the GAO that we are requiring in this legislation, we 
in the Congress will use this study to close any remaining loopholes 
that may remain that are permitting people to avoid their legal child 
support. It will make it criminal, but at the same time we must 
remember that it is the children who are being abused and deprived. I 
lend my strong support to this and look forward to continuing to work 
on the basis of the GAO study.
  Mr. Chairman, I rise in strong support of H.R. 833--the Bankruptcy 
Reform Act of 1999.


                              introduction

  Consumer bankruptcy reform is an important issue that needs to be 
addressed now. In 1997 Americans filed a record of 1.33 million 
consumer bankruptcy petitions representing an over 650 percent increase 
since 1978. Those who entered into bankruptcy erased an estimated $40 
billion in consumer debt. This resulted in a hidden tax of almost $400 
per household for families who have to pay monthly bills including 
mortgages, student loans, and insurance. It is important to note that 
this surge in bankruptcies in the last few years occurred at a time 
when the national economy has grown at a strong rate. In fact, between 
1986 and 1996, real per capita annual disposable income grew by over 13 
percent while personal bankruptcies more than doubled.
  Bankruptcy is fast becoming the first stop financial planning tool 
rather than a last resort. The purpose of reform is to improve 
bankruptcy law and practice by restoring personal responsibility and 
integrity in the bankruptcy system but also ensuring that the safety 
net of the bankruptcy code is intact for those who need it most. I am a 
strong supporter of the consumer bankruptcy reforms contained in the 
bill.


                             child support

  What I really want to focus on in today's debate is child support. I 
have a long history of standing up for child support enforcement, 
having been a pioneer on child support reforms and having served on the 
U.S. Commission for Inter-State Child Support Enforcement. It's a 
national disgrace that our child support enforcement system continues 
to allow so many parents who can afford to pay for their children's 
support to shirk these obligations. And despite the reforms the so-
called `enforcement gap'--the difference between how much child support 
could be collected and how much child support is collected--has been 
estimated at $34 billion!
  This legal abuse is a criminal violation as well as neglect of our 
children's most basic needs. In addition, the taxpayers are abused 
because billions of tax dollars are paid out because these families are 
falling onto the welfare roles at alarming rates.
  I want to commend the Committee for their attention to child support 
components of this problem. I am very pleased that H.R. 833--the 
Bankruptcy Reform Act of 1999 strengthens child support enforcement. I 
thank Chairman Gekas and the Committee for all their hard work and 
their reaching out to diverse groups to form a consensus that the 
payment of child support should be protected.
  H.R. 833 stregthens Child Support Enforcement by:
  Child support payments are moved to NUMBER ONE when determining which 
debts are paid first in a bankruptcy case. Currently, child support 
payments rank seventh behind such ``priorities'' as attorney's fees.
  Confirmation and discharge of Chapter 13 plans are made conditional 
upon the debtor's complete payment of child support. This will help 
further ensure that child support receives the priority it deserves.
  Providing that the automatic stay DOES NOT apply to a state child 
support collection agency that is trying to recover child support 
payments. I know from speaking with child support advocates in New 
Jersey, that this change is a top priority for them to ensure continued 
payment of important child support.
  I also want to associate myself with an additional provision, that 
was added in full Committee, that will require the trustee to notify a 
claimant parent of the bankruptcy proceeding. This reform measure was 
led by Rep. Clay Shaw and me. This will ensure that claimant parents 
are not left out when a debtor parent enters into bankruptcy. It is 
important to note that this was dropped from the Conference report last 
year. Fortunately with Representative Shaw's leadership and with 
Representative Jackson-Lee--Republicans and Democrats providing bi 
partisan support.
  There are important reforms for any state of New Jersey and for 
states across the nation. In fact these provisions are welcomed 
improvements that will help make real and positive change.
  The current child support obligation for this year in New Jersey is 
$767 million. The total child support payments in arrears is $1.3 
Billion. Yes, I said $1.3 Billion, of which about $800 million is still 
collectible. Bergen county in my district, along with six other New 
Jersey counties, make up 53 percent of the total collections.


                              my amendment

  In addition, I am grateful to Chairman Gekas and the Committee for 
including my amendment on child support during mark-up. My amendment 
requires the GAO to study the feasibility of having Bankruptcy Court 
trustees report the names of individuals filing bankruptcy to the 
Office of Child Support Enforcement. The names could then be checked 
against a national list of court orders for child support. Those found 
to have support obligations would have the support obligation listed 
among the debts before the Bankruptcy Court and be used to better 
facilitate communication between claimant parents, state agencies and 
the trustee.
  The GAO would have 10 months from the enactment of the legislation to 
conduct the study and report to Congress. The study is intended to lead 
to effective legislation ensuring that debtor parents cannot use 
bankruptcy to escape their child support obligations. In other words, 
we want to use this study to close any remaining loopholes that avoid 
child support legal obligations.


                               conclusion

  These are important and significant improvements that ensure that 
child support enforcement is strengthened. I supported these provisions 
last year and plan to support them this year.
  It is important to remember that failure to pay child support is not 
a victimless crime. The children are the first and most important 
victims. We must ensure that these children are taken care of and I 
applaud the work of the Committee to this end and will continue my work 
on this issue. I urge support for this important legislation.
  Mr. CONYERS. Mr. Chairman, I yield myself 45 seconds.
  I want to address the gentlewoman from New Jersey, whose concern 
about bankruptcy is well-known and remembered from the last Congress. I 
read to her the first paragraph of the National Women's Law Center 
letter sent to me only 2 weeks ago which says that ``The bankruptcy 
bill, H.R. 833, puts economically vulnerable women and children at 
greater risk. By increasing the rights of certain debtors, including 
credit card companies and secured creditors, the bill would set up a 
competition for scarce resources between parents and children owed 
child support and commercial creditors both during and after 
bankruptcy. And single parents facing financial crises--often caused by 
divorce, nonpayment of support, loss of job, uninsured medical expenses 
or domestic violence--would find it harder to access the bankruptcy 
process and harder, if they got there, to save their homes, cars and 
essential household items.''
  This is a nonpartisan organization. I urge the Members to carefully 
consider what we are doing to our women and children.
  Mr. Chairman, I yield such time as he may consume to the 
distinguished gentleman from Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. I thank the gentleman for yielding me this time.
  Mr. Chairman, we have heard much about personal responsibility during 
the course of this debate. We have heard over and over again from 
members of the credit card industry that individuals must be held 
accountable for

[[Page H2662]]

their behavior and that no longer is there any stigma attached to 
bankruptcy.
  No one disagrees with the principles of personal accountability and 
personal responsibility. The problem is that the rhetoric does not 
withstand scrutiny in terms of the evidence supporting a linkage, to 
establish a link between the increase in personal bankruptcy filings 
and the change we are told has taken place in people's attitudes about 
bankruptcy simply does not exist.

                              {time}  1300

  On the eve of the committee markup I finally received from the 
Congressional Budget Office a draft of a report which I and other 
minority members of the committee requested more than a year ago. It 
concludes, and I quote:

       At this point, we do not have a clear idea of the benefit 
     of a needs-based bankruptcy requirement.

  It further concludes, and again I am quoting:

       Available research on the behavior of personal filings over 
     time does not paint a clear picture of whether filings 
     respond to incentives in the bankruptcy law.

  In other words, we know very little about the likely consequences of 
what we are doing here today. Yet we are proceeding as if the evidence 
was clear and compelling.
  But do not be misled. This bill will not reduce the number of 
bankruptcy filings. Colleagues will not see a substantial difference in 
terms of the 1.4 million annual filings.
  But there is an issue of responsibility, corporate responsibility, 
and I submit that if we insist on responsible lending by the credit 
card industry, we will reduce the number of bankruptcy filings. Because 
while we do not know the cause of the increase in bankruptcy filings, 
no one, no one can legitimately dispute that irresponsible lending 
practices are at the very least a contributing factor.
  Instead of encouraging responsible use of credit cards and reduction 
of credit card debt, many credit card lenders have encouraged card 
holders to take on an increasing amount of debts when they can ill 
afford it. They have increased interest rates, they have increased fees 
on current accounts, they have imposed penalties on consumers who pay 
off credit card balances without incurring any interest charges, and we 
have all experienced, everyone has experienced, the aggressive 
marketing tactics of the credit card industry. Last year alone they 
sent out more than 4 billion, that is 4 billion, solicitations, many of 
them to students with no credit history whatsoever and consumers 
already in debt.
  The first exhibit to my right shows one of those solicitations which 
went to my own college-aged daughter. It is what is known as a live 
loan. I do not know why it is a live loan, but it is called a live 
loan, which invited her to cash a negotiable check for $2,875 at 18.9 
percent interest. The offer said:

       Use the money for whatever you like. No limits, no 
     restrictions, no questions asked--

and I am quoting from the solicitation.
  If my colleagues question the link between these kinds of aggressive 
marketing practices and the rising bankruptcy rate, I invite them to 
examine the second exhibit to my right. The first panel displays a 
credit card offer by First Consumers National Bank, a nationally 
chartered credit card bank owned by Spiegel and Eddie Bauer. It says, 
and I am quoting:

       If you filed a bankruptcy, you can get a fresh start with 
     this First Consumers National Bank Visa Card today. Your 
     filed bankruptcy, your filed bankruptcy, qualifies you. No 
     need to wait for bankruptcy discharge.

  That is a quotation.
  The second panel also shows a letter sent to bankruptcy attorneys, 
and I think it is the third panel, it is the third panel. The third 
panel shows a letter to bankruptcy attorneys by a Minnesota company 
that calls itself American Bankruptcy Service. The letter seeks to 
enlist these attorneys as distributors. Must be like an Amway, an Amway 
of bankruptcy services who will market the fresh start card to their 
clients. It actually goes so far as to offer them a commission. For 
each credit card issued, it promises they will receive $10, 10 bucks if 
they can get out there and peddle that card.
  Now a balanced bankruptcy bill would address this kind of egregious 
conduct. It would demand responsible behavior not only of debtors but 
of credit card lenders themselves and particularly those creditors 
whose own reckless lending practices have done so much to drive people 
into bankruptcy.
  But this is not a balanced bill. H.R. 833 does nothing, nothing to 
encourage corporate responsibility. In fact, it would reward 
irresponsible lending by enhancing the position of credit card 
companies relative to other creditors. It would create a vast new 
system of means testing that would be implemented at taxpayer expense. 
In effect, the bill would turn the bankruptcy system into a public 
funded with our tax dollars collection agency to increase the 
profitability of the credit card industry.
  And what would this all cost the taxpayer? According to the CBO, last 
year's bill would have cost $214 million over a 5-year period, but that 
does not include some $225 million in administrative costs required to 
cover the additional duties assigned to the U.S. trustees under H.R. 
833. In other words, almost a half a billion dollars so that the credit 
card industry can enhance their bottom line.
  This bill is nothing more than a public subsidy for the credit card 
industry, Mr. Chairman, and it deserves to be defeated.
  Mr. GEKAS. Mr. Chairman, I yield 30 seconds to the gentleman from 
Michigan (Mr. Smith).
  Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman for 
yielding this time to me, and thank him for his leadership and those on 
his committee for bringing a bill before Congress that is going to have 
the effect of lowering interest rates and making credit more available. 
This bill encourages competition by reducing uncertainty.
  Right now, all those credit card companies jack up their interest 
rates because their competition is forced to impose high interest rates 
to cover the ease of declaring bankruptcy.
  Also let me just say that the farm provisions in this bill that 
extend indefinitely the provisions of chapter 12 in title 11 for 
farmers is very good for the agricultural community.
  Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentlewoman from 
New York (Mrs. Kelly).
  Mrs. KELLY. Mr. Chairman, I thank the gentleman from Pennsylvania 
(Mr. Gekas) for yielding me the time to clarify some very important 
provisions in this legislation.
  Mr. Chairman, I rise today in strong support for H.R. 833, the 
Bankruptcy Reform Act, because it boils down to two words: personal 
responsibility. If one assumes a debt, they should do everything in 
their power to pay it off. However, a safety net has to remain for 
those who legitimately cannot pay their debts. Creditors should be made 
whole, if possible.
  Some of my colleagues here today are trying to paint the word 
creditors to mean faceless financial institutions who are tricking 
consumers into assuming debt. They specifically speak of credit card 
debt. They unfortunately failed to note that credit card debt in the 
United States amounts to only 3.7 percent of all consumer debt. 
Furthermore, only 1 percent of credit card accounts end up in 
bankruptcy. Of that 1 percent it is estimated that 15 percent of those 
accounts can afford to repay some or all of their debt.
  The people who are truly being hurt by our current bankruptcy system 
are Americans who play by the rules and pay their debts. Bankruptcy 
costs the average American family an average per year of $400.
  Needs-based bankruptcy reform is well overdue, and that is what H.R. 
833 delivers. It is the people who game the system that we have to 
stop.
  I have heard from my colleague from Virginia (Mr. Moran). He stated 
last year more people filed for bankruptcy than graduated from college. 
That is a staggering fact.
  I am pleased to support H.R. 833's provisions which strengthen the 
Bankruptcy Code protections for ex-spouses and children. They have to 
be supported.
  In the current bankruptcy law, child support and alimony are placed 
seventh behind attorney fees as debt obligations. If enacted, this bill 
would move child support and alimony payments to first on the list of 
debt obligations.
  Also under current law, some debtors use the automatic stay to avoid 
paying

[[Page H2663]]

child support payments after they file for bankruptcy. H.R. 833 exempts 
State child support authorities from the automatic stay, thus insuring 
less delay in the proper payment of child support.
  I vehemently oppose any legislation that would reduce the ability of 
women and children to receive support payments.
  H.R. 833 is a good bill that moves us in the right direction, and I 
ask my colleagues from both sides of the aisle to join me in support of 
this reasonable reform.
  Mr. CONYERS. Mr. Chairman, I yield 30 seconds to the gentleman from 
Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Chairman, I thank my friend and colleague for 
yielding me 30 seconds.
  Let us be very, very clear, and I know that most members of the 
committee were aware of this, but for the rest of our colleagues:
  During one of our hearings there was a panel of nine witnesses, 
including representatives of the credit card industry and minority 
witnesses. I asked a question and polled each of them, and all nine 
unanimously stated that this bill would not lower interest rates.
  So that is a red herring, I suggest. The bill should be defeated.
  Mr. CONYERS. Mr. Chairman, I yield 5 minutes to the gentleman from 
New York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, I wanted to discuss a few things about this 
bill: first, the alleged need for it. And I want to stress that even 
though I am going to say there is no necessity for this bill, the 
Democratic substitute answers the nonexisting problem which they posit.
  We are told the need for this bill is that the American people, 
especially the American middle class, are a bunch of deadbeats, that 
there is a huge increase in bankruptcy filings, which there is, and 
that the reason for this huge increase in bankruptcy filings is that we 
have changed social mores. There is no more stigma associated with 
bankruptcy. People used to be very reluctant to declare bankruptcy. Now 
they do it as a financial planning instrument, and they are deadbeats, 
and, therefore, we have got to crack down on it because the credit card 
companies are not making enough money.
  What is the truth of the matter? The truth is that is nonsense. Sure 
there are a lot more bankruptcy filings, but why? The figures tell a 
very different story.
  First of all, if it were true that the reason for the increase in 
bankruptcy filings were a change in social mores where people are more 
easily going to bankruptcies, then people would be going bankrupt when 
they are less in debt, when they are less in trouble. The figures say 
differently.
  In 1983, before the surge in bankruptcy filings started, the average 
person who filed for bankruptcy had debts equal to 74 percent of his 
income. If one has that much debt compared to income, they file for 
bankruptcy.
  Today, the average bankruptcy filer has debts equal to 125 percent of 
his income; so people are 50 percent more desperate before they go into 
bankruptcy. They are less eager to file, they are more reluctant to 
file, they are further in the hole before they file.
  So why then do we have such an increase in bankruptcy filings? Here 
is the answer:
  If we look at society at large, not at just bankruptcy filings but at 
society at large, we can find two things. We find the bankruptcy 
filings rising, but we also find the household debt burden as a 
percentage of income rising right along with it. Look how those two 
lines match.
  Mr. Chairman, credit card companies, used to be when I was in college 
it was hard to get credit. Today they shove it at high school kids. 
Today they shove credit cards at people who are already 80 percent of 
their income in debt, of their annual income.

                              {time}  1315

  That is the real problem, irresponsible lending by the credit card 
companies. More and more credit is being given to people. People are 
getting more and more in debt. Just as the debt-to-income ratio rises, 
the bankruptcy filing rate rises right in tandem.
  By the way, we are told that in 1978 Congress made the bankruptcy 
laws easier, and in the early eighties we started seeing an increase in 
bankruptcy because the laws are too easy; now we have to crack down.
  Look at Canada. Canada has very harsh bankruptcy laws, harsher even 
than they want to make our laws in this bill. It has always been very 
harsh, and yet they have had the same increase in bankruptcies. We can 
date it.
  When did it start in Canada, the increase in bankruptcies? In 1968. 
Why 1968? That is the year when the Visa card went into Canada, and 
they have had the same problems we have had with very harsh bankruptcy 
laws.
  So this is a myth. The myth that the American middle class are 
deadbeats and that we have to crack down and squeeze a little bit more 
money out of them when they go bankrupt, it is a myth.
  The Democratic substitute does squeeze it, but it squeezes it in a 
more rational way.
  Let us talk about four things that this bill does. We are told that 
we ought to have a means test, needs-based bankruptcy. People should 
not simply get a discharge of their debts; they should have to repay if 
they can.
  I will agree to that. We all agree to that. If people can repay, they 
should do so, and there should be a means test to see if they can 
repay, but a means test should mean a means test. What is your income? 
What are your unavoidable expenses? The difference is how much can 
afford to be repaid.
  What does this bill do? Does it look at current income, at 
anticipated income? No. It looks back at income for 6 months before one 
files bankruptcy and assumes that is going to be the income.
  It is pretty common in this country today for someone to be making 
$50,000, $75,000, $80,000 a year as middle management at IBM or some 
other big company, laid off. Now he is making $25,000 at McDonald's or 
as a consultant. That is the new underemployment for the middle class, 
a consultant.
  Well, he is making $25,000. He contracted debts based on an income of 
$75,000. Now he goes bankrupt. This bill does not look at his new 
income, which is $25,000, or his prospective income which is $25,000. 
They look at what his income used to be, $75,000.
  Is that fair or rational? Does it make sense? No.
  The other half of the means test, what are your expenses? Well, what 
is your rent? What is your mortgage payment? Does this means test look 
at this? No. It looks at what the IRS thinks in its guidelines the 
average mortgage or rent ought to be in the Northeast or the 
southwestern United States, in guidelines so harsh the Congress told 
IRS to junk them last year, but for bankrupts we are going to do the 
same.
  So we have to really crack down on the debtors. What about the 
dishonest creditor? Sears Roebuck was adjudged to have defrauded 
bankrupt people, debtors, $168 million in a class action suit last 
year. We cannot let that happen again. Big business crooks have to be 
protected, so this bill says no more class action suits. Someone wants 
to sue the big malefactor, the big guy who is cheating people of 
millions of dollars, they better have a few hundred thousand dollars in 
legal fees. One person cannot bring that lawsuit and it cannot be done 
for a class. No class action lawsuits; only in bankruptcy and only 
against creditors.
  Small businesses, this bill murders small businesses. Many small 
businesses reorganize in bankruptcy. They get protections from their 
creditors. They manage to reorganize, get out of debt, and go on. This 
bill imposes such rigid requirements and such time lines on them that 
they will liquidate and kill jobs in businesses that could have 
survived.
  Finally, child support, they claim that this bill saves child 
support. No, it does not. It kills child support enforcement. How? Two 
ways. Chapter 7, it says that not only are child support payments 
nondischargeable, so is credit card debt nondischargeable, so there is 
more to compete with mom.
  Who is going to collect the debt, mom or the credit card attorney? 
They say we will give priority to mom; we will give priority to child 
support. Priorities are irrelevant after the discharge.
  When someone is not in bankruptcy court anymore, priorities do not 
apply,

[[Page H2664]]

and in Chapter 13 they say a person cannot have a Chapter 13 repayment 
plan accepted by the court unless all the child support is paid, there 
is a plan to pay all the child support. They count as child support 
debts owed the government, so if the means test in Chapter 13 says he 
can pay enough money to pay the child support to the custodial parent 
but not enough to pay the debt he owes to the government, not enough, 
cannot do it, cannot confirm a plan, too rich to go bankrupt in Chapter 
7, too poor to go bankrupt in Chapter 13, cannot go bankrupt at all, 
and she is out there competing with every other debt collector in the 
world. What chance does she have?
  This bill also hurts farmers. There is no reason for such a harsh, 
one-sided bill. The Democratic substitute is a very harsh bill. I 
personally would not vote for it if it were a freestanding bill. I 
think it is too harsh, but it does everything reasonably that should be 
done and does not do some of these terrible things of prohibiting class 
actions, murdering child support, having an unfair means test, hurting 
small businesses.
  That is why the administration will veto the bill. That is why every 
union is opposed to it, every consumer group, every professional 
bankruptcy group. Anybody who knows anything about bankruptcy in the 
profession is opposed to this bill, except for the credit card issuers 
and the banks.
  So I urge a ``yes'' vote on the Democratic substitute and a ``no'' 
vote on the bill.
  Mr. GEKAS. Mr. Chairman, I yield 1 minute to the gentlewoman from 
California (Mrs. Tauscher).
  Mrs. TAUSCHER. Mr. Chairman, I rise in support of the Bankruptcy 
Reform Act because it is based upon a simple principle of personal 
responsibility. Those who buy on credit should be required to pay their 
bills.
  Our current bankruptcy system does not hold people to that standard. 
In 1998, a record 1.4 million Americans went to court to have their 
debts erased. Some were hard-working Americans who could not afford to 
pay their bills and needed bankruptcy protection, but many others took 
advantage of a failed bankruptcy system that encourages people to avoid 
paying their debts.
  When people who cannot pay their debts do not, middle class Americans 
pick up the tab because companies charge higher prices to make up for 
the losses. Working families in America have a hard enough time paying 
their own bills. They should not have to needlessly pay someone else's.
  The Bankruptcy Reform Act makes the right changes to the law by 
requiring those who can reasonably pay at least 25 percent of their 
debt to do so. Lower income Americans who truly cannot get out from 
mountains of debt will continue to have an escape hatch.
  Mr. Chairman, I urge my colleagues to again stand for the reasonable 
principle of personal responsibility and pass this important 
legislation.
  Mr. GEKAS. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from 
New Jersey (Mr. Menendez).
  (Mr. MENENDEZ asked and was given permission to revise and extend his 
remarks.)
  Mr. MENENDEZ. Mr. Chairman, I thank the gentleman from Pennsylvania 
(Mr. Gekas) for yielding me this time and for his work on this bill, 
along with the gentleman from Virginia (Mr. Boucher) and others.
  Mr. Chairman, our bankruptcy system should be a safety net for those 
in need, not a financial planning tool for the well-to-do. It is not 
fair for the large majority of working men and women who pay their 
bills and play by the rules to continue footing the bill and paying the 
price for those who abuse the bankruptcy system. It is just not right.
  This bill makes sure that those who truly need the safety net of 
bankruptcy get it, like those who lose their job or have a medical 
emergency or a sick child. This bill protects those people, but it also 
makes sure that those higher income people, who can still repay some of 
their bills, do so. In my view, that is just basic personal 
responsibility.
  Under the bill, if the debtor earns less than the median household 
monthly income, they can file Chapter 7, have almost all of their debts 
erased and be totally unaffected by the needs-based formula. If they 
make above the median and their monthly income is great enough to pay 
at least $6,000 of the unsecured debt after subtracting actual priority 
debts, after subtracting secured debts like their mortgage, after 
subtracting actual school tuition for their kids, after subtracting 
allowable living expenses based on IRS guidelines, then, yes, they have 
a Chapter 13 repayment plan.
  Now, that is allowing for a lot of leeway and a lot of protection 
before we ask someone to pay back the people they owe.
  Our colleagues, the gentleman from Illinois (Mr. Hyde) and the 
gentleman from Michigan (Mr. Conyers), who I have a great deal of 
respect for, have an amendment to take the IRS living standards out of 
the bill and give more discretion to the judges. In my mind, that is a 
mistake because it is the unfettered discretion that has made the 
bankruptcy laws so unfair.
  Under our current rules, a wealthy person can be subject to one 
standard for living expenses while the working man or woman is 
subjected to another one. I believe our Bankruptcy Code should treat 
everyone equally. That is what the formula does.
  Worst of all, under our current system children are often the ones 
who get shortchanged because their support payments can be stayed 
during bankruptcy proceedings, all while their noncustodial parents 
continue to enjoy their current standard of living. So this bill ends 
that practice and puts child support at the very top priority during 
bankruptcy, where it should have been all along.
  I urge my colleagues to vote for this bill. Let us bring some 
fairness, some justice, some standards, some protection for our 
children and some sense to our Bankruptcy Code.
  Mr. GEKAS. Mr. Chairman, I yield 1 minute to the gentlewoman from 
Oregon (Ms. Hooley).
  Ms. HOOLEY of Oregon. Mr. Chairman, I thank the gentleman from 
Pennsylvania (Mr. Gekas) for his work and for yielding me this time.
  Mr. Chairman, I am an original cosponsor of H.R. 833, a bill that 
provides common sense bankruptcy reform. It has been said that over the 
last 7 years we have had unparalleled economic prosperity and yet the 
bankruptcy filings have hit an all-time high. The thing that has 
happened is we have had a lot of studies that have also said some of 
those people that are filing bankruptcies can afford to pay back some 
of that debt.
  I am supporting this bill because it ensures those with the ability 
to pay that they pay, and those who legitimately need protection from 
creditors get it.
  I hope Members will keep in mind, and we have heard this number of 
$51,000 for a family of four, which is the median income, they are not 
even affected by this legislation. If they are making $51,000, they are 
not affected by this legislation. For those above that threshold, there 
is a sensible means testing that determines whether a debtor should be 
able to walk away and not pay anything or at least pay part of their 
debt.
  Mr. Chairman, this bill encourages personal responsibility, meets its 
obligation for children and families and saves American consumers 
money. I urge support for this bill.
  Mr. GEKAS. Mr. Chairman, I yield 3\1/2\ minutes to the gentleman from 
New Jersey (Mr. Rothman), a member of the committee.
  (Mr. ROTHMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. ROTHMAN. Mr. Chairman, I thank the gentleman from Pennsylvania 
(Mr. Gekas) for yielding me the time.
  Mr. Chairman, I rise today in favor of H.R. 833. I believe that this 
legislation is important in order to restore integrity to our Nation's 
bankruptcy system.
  While I believe in the fresh start that bankruptcy provides, and 
agree that there are people who legitimately need and deserve its 
protections, I am concerned that this last resort is currently being 
abused by many people. That is unfair to consumers, to creditors and to 
the people who truly need the system.
  Also, while I support the bill, I believe that it could have been 
made better had we been allowed a floor vote to

[[Page H2665]]

eliminate the provision which allows States to opt out of the homestead 
exemption contained in the bill, and I hope that the various State 
legislatures who have been given this discretion will do so wisely.
  Nevertheless, I support H.R. 833 and wish to make four points today. 
First, I believe that there is an urgent need for meaningful reform. It 
is just common sense, if someone borrows money from somebody else or 
they encourage them to perform some services and they consume the money 
or get the benefit of the services, they should pay it back if they 
can, because if they do not, everyone else in America pays for being a 
deadbeat.
  Now, this bill says we do not want the rest of American families to 
pick up the tab for those who have avoided paying their just 
obligations, even though they could afford to repay all or a portion of 
it.
  Next, there is a need to create Federal standards. More than 70 
percent of the all-time 1.4 million bankruptcies were filed in Chapter 
7, which means all their debts are forgiven, even without regards to 
income. This says, let us take a look at the regional median income. So 
in New Jersey, the State that I come from and represent, if someone 
makes $67,000, less than $67,000 for a family of four, they can 
discharge all their debts.

                              {time}  1330

  It is only if you make more than $67,000 that the questions start to 
be asked: Can you afford to repay a portion of your debt?
  There is discretion involved. There are presumptions that you can 
afford to repay, but after child support and other legitimate, 
important deductions are made, the bankruptcy trustee can still use his 
or her judgment to take into account extraordinary circumstances, such 
as a decline in income or unexpected medical expenses.
  The bill still truly allows those who need a fresh start to get one, 
but says in New Jersey if you make over $67,000 a year and can afford 
to repay a portion of your debt, you should.
  This bill improves the current law also in several ways. It 
strengthens protections for vital family support obligations. It 
completely protects retirement plan assets from the claims of 
creditors, and completely protects savings accounts for post-secondary 
college savings accounts, up to $50,000 per child. It adds a whole host 
of other new consumer protections.
  Therefore, as an original cosponsor of this bill, I urge my 
colleagues to vote in favor of this important bankruptcy reform 
legislation.
  Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from 
Virginia (Mr. Moran), a Member who has been a bulwark in this effort 
and a cosponsor right from the beginning.
  Mr. MORAN of Virginia. Mr. Chairman, I rise in support of the 
Bankruptcy Reform Act. I am a lead sponsor of the measure because the 
current system is broken. What was once the option of last resort has 
too often become the preferred option of choice. A legislative fix is 
necessary to distinguish between those who truly need a fresh start and 
those capable of assuming greater responsibility and making good on at 
least some of what they owe. It's the fair thing to do.
  Mr. Chairman, unless we take the steps now to reform the bankruptcy 
system while the economic times are good, we will not have the 
political resolve to fix it when the economy is not so strong.
  Despite this country's remarkably strong economy, wages are up, 
unemployment is down, interest rates and inflation are low--despite the 
unparalleled times that we are currently experiencing, the rate of 
personal bankruptcy filings has increased dramatically. That does not 
make sense, unless the explanation is that the system is broken.
  Mr. Chairman, last year bankruptcy filings reached a record high of 
more than 1.4 million. That is more than the number of people who 
graduated from college last year.
  Now we can vilify creditors and lenders, banks and mortgage companies 
and credit card companies, particularly credit card companies, and some 
of that vilification is deserved. All that unsolicited marketing, 
particularly of college students, is too aggressive, it is 
inappropriately deceptive, and it is imprudent, and we should not be 
condoning it.
  But while many would like to blame the credit card industry for the 
sharp increase in bankruptcy filings, it is very important to 
understand that the statistics indicate that the credit card industry 
is not the impetus for the current bankruptcy crisis.
  The vast majority of Americans recognize the personal responsibility 
they take in using a credit card. More than 96 percent of credit card 
holders pay their bills as agreed to, and only 1 percent ever end up in 
bankruptcy. Bank credit cards represent less than 16 percent of total 
debt on average bankruptcy petitions.
  Mr. Chairman, according to a recent Federal Reserve Board survey, 
credit cards account for a mere 3.7 percent of consumer debt, hardly 
large enough to cause a bankruptcy crisis.
  Regardless of how one feels about creditors, the key issue before us 
now is that many borrowers capable of repaying some or all of their 
obligations are not acting responsibly. Somewhere over the past decade, 
since 1990, the integrity of the bankruptcy process has been corrupted 
and an important moral principle has been eviscerated. The time-honored 
principle of moral responsibility and personal obligation to pay one's 
debts has been eroded by the convenience and ease with which one can 
discharge his or her obligations. It is unacceptable and unfair to 
those who do pay their bills to have to foot the bill for those who do 
not.
  Mr. Chairman, it is estimated that the majority who do make good on 
their debts are having to pay about an average of $400 a year to make 
up for the bad debt of those who do not make good on their debts. That 
is why this legislation addresses the process. It enables those who 
truly need relief to get the relief. It is fair, it is a bipartisan 
bill, and it should be passed.
  Mr. GEKAS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Washington (Mr. Adam Smith), because if there is anyone who knows about 
the economic impact of the bill before us, it is he.
  Mr. SMITH of Washington. Mr. Chairman, this issue is all about 
personal responsibility, taking responsibility for one's own actions. 
In this case, when people do not take responsibility for their own 
actions, others have to pay.
  We all pay more for everything that we buy because of the costs 
companies have to incur to cover those who do not pay their bills, and 
in particular, small businesses can be killed by this. If just a couple 
of critical creditors do not meet their obligations, small businesses 
can go out of business.
  We have a responsibility to honor our commitments. I think the worst 
message that I have heard in this whole debate is that what is really 
to blame is the marketing, that we should blame people for advertising 
credit, and it is their fault, it is not the fault of the person who 
fell for the marketing campaign, who accepted the obligation, accepted 
the money. It is somebody else's fault.
  When someone gets a credit card and charges it, they are responsible 
for paying it. Who does not know that? Everybody knows that. To say 
that it is not the individual's fault who has incurred the debt, but 
the person who gave them the credit, sends a terrible message to our 
country, that you do not have to be responsible for your own actions.
  Second, it hurts those who can responsibly use credit. I got one of 
those credit card applications, 10 or 15 of them, when I was in 
college. I used one of them and got a credit card and I paid it off 
every month. Because of that, it helped me with some financial spending 
ability, and helped me establish credit. I would hate to think that 
people who can use credit responsibly would be denied it because of 
those who cannot.
  One final point on the means testing issue. It is criticized that the 
means testing is based on your income from the past. First of all, what 
else can you base it on, really, except the existing record? But 
secondly, that is exactly the way we calculate child support payments, 
by your past income.
  Just like with child support, in this bill if there is an extenuating 
circumstance, if you go from being a $100,000 a year marketer to 
somebody working for $5 an hour at McDonald's, you can go to the judge 
and have that taken into consideration.

[[Page H2666]]

  It is just a misstatement of the facts to say that somehow those 
special circumstances are not considered in this bill. They are, just 
like they are in calculating child support. I do not think anybody on 
the other side of this debate would say that we should only base child 
support payments on projected future incomes, as offered by the person 
who has to meet the obligation.
  The means testing system works, and so does the bill.
  Mr. GEKAS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. Peterson).
  Mr. PETERSON of Pennsylvania. Mr. Chairman, I thank the gentleman for 
yielding time to me.
  Mr. Chairman, I would also like to congratulate him and all those who 
have worked on this legislation. This is one of the most needed pieces 
of legislation in the economics of this country.
  At a time when we are at an all-time high economically, when our 
economy is growing faster than it has ever grown, we end up with the 
highest number of bankruptcies, 1.42 million, costing consumers over 
$40 billion in the past year. In 1998, more people declared bankruptcy 
than graduated from college. That is inconceivable in a country like 
this.
  Why is that the case? It is because it is so easy. It is because we 
have current laws that allow people to choose, well, I guess it would 
be easier to go bankrupt, so I will do that. That is not what made this 
country strong. When we owe money, when we have debts, it is the 
responsibility of each and every one of us to pay those debts, however 
long we have to work, how many hours per day, how many days per week, 
how much effort is needed to pay our debts.
  I was a businessman, a supermarket operator for 26 years. When I am 
out in my district, I always say to businessmen, and business is what 
makes this country go, that is what makes our employment base; to 
independent businessmen I will say, how is business? And they will say, 
it is good. But I so often hear the complaint, if it was not for 
bankruptcies, I would have had a good year. I had seven bankruptcies 
this year and wiped out my total profit picture.
  That is happening to small businesses all over the country because 
people choose to go bankrupt rather than stay and fight and pay their 
bills, as they should have. The American economy is built on financial 
responsibility. That is what is different about this country. When we 
owe something, we pay it.
  Currently, child support and alimony are only accorded seventh 
priority. They are going to go to the top of the list in this bill. 
That is why H.R. 833 is so well-designed. It put responsibility back, 
that when you owe money, you have to pay it. You have to make your very 
best effort. Bankruptcy should only be the very last extreme, where you 
just cannot physically do it. It is not something that you choose, it 
is not a choice you make. Bankruptcy should not be easy, and this bill 
changes that.
  Mr. CONYERS. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, the distinguished minority leader, the gentleman from 
Missouri (Mr. Richard Gephardt) has said that, ``While I support a 
balanced approach to bankruptcy reform that places equal responsibility 
on both debtors and creditors, I must oppose H.R. 833 because it fails 
to strike such a balance.''
  In addition, the administration has said repeatedly that they will 
veto this bill in its current form. The legislation is opposed by the 
National Bankruptcy Conference, the Commercial Law League, the National 
Association of Consumer Bankruptcy Attorneys, the National Association 
of Bankruptcy Trustees, and the National Association of Chapter 13 
Trustees, the AFL, the UAW, AFCSME, UNITE, the Leadership Conference on 
Civil Rights, the National Partnership for Women and Families.
  Please, let us make certain that we do not move bankruptcy into the 
dark ages. Let us reject this bill, send it back to the committee, and 
I hope that Members will consider favorably some amendments that could 
hopefully improve the bill.
  Mr. GEKAS. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, the lines of debate are fairly clear now. We have 
insisted all along that our bill is a balanced approach, contrary to 
what the gentleman from Michigan (Mr. Conyers) has implied, or is the 
implication or the inference gained by the minority leader.
  When we consider the fact that we have a safe harbor for low-income 
and moderate-income and no-income individuals seeking the benefits of 
bankruptcy, on the one side, and on the other side we have the approach 
that those individuals in the higher-income brackets, from $50,000 and 
up who might have an ability to repay are accorded a mechanism for 
recoupment of some of that debt, then we can see that the balance is 
what we begin the debate with here in this Chamber.
  So when it comes down to the final vote, what the individuals who are 
supporting this bill will be finding is a bill that fixes the loose 
machinery that now exists in bankruptcy.
  Mr. HYDE. Mr. Chairman, I am pleased that the Committee on the 
Judiciary, after thorough hearings and markups, completed its 
consideration last week of H.R. 833 (the ``Bankruptcy Reform Act of 
1999''), and reported the legislation favorably.
  We are on the Floor today--relatively early in the 106th Congress--
debating this omnibus bill, because bankruptcy is an important issue on 
the national agenda. With this auspicious beginning, I am hopeful the 
effort to enact major improvements in our bankruptcy law will reach 
fruition this session. Consumer bankruptcy reform is the centerpiece of 
H.R. 833, but the bill also addresses business bankruptcy, tax-related 
issues in bankruptcy, transnational bankruptcy, and the treatment of 
financial contracts.
  Bankruptcy reform was a major activity of the Committee on the 
Judiciary in the last Congress. In September 1997, our colleague, the 
gentleman from Florida [Mr. McCollum], introduced H.R. 2500, the 
``Responsible Borrower Protection Bankruptcy Act,'' a bill designed in 
part to implement the concept of needs based bankruptcy. In February 
1998, the chairman of the Subcommittee on Commercial and Administrative 
Law--the gentleman from Pennsylvania [Mr. Gekas]--built on this 
approach by introducing H.R. 3150, the ``Bankruptcy Reform Act of 
1998.'' H.R. 3150 incorporated--with modifications and additions--most 
of H.R. 2500's consumer bankruptcy provisions while also addressing 
other bankruptcy related subjects. Although the House passed an amended 
version of H.R. 3150 and later acted favorably on the work product of a 
Committee of Conference, the other body did not have time before 
adjournment to take action on the Conference Report.
  This year my Committee again devoted much attention to bankruptcy 
reform. The gentleman from Pennsylvania [Mr. Gekas], who conducted 
important hearings on bankruptcy reform in his Subcommittee last year, 
deserves commendation for the scope of the testimony his Subcommittee 
elicited during four days of hearings this March. Witnesses represented 
a wide range of viewpoints.
  These hearings were followed by two days of markup in the 
Subcommittee on Commercial and Administrative Law and five days of 
markup in the Full Committee on the Judiciary. The positive aspect of 
returning to a familiar subject was the opportunity to fashion some 
improvements as a result of benefitting from the thoughtful insights of 
knowledgeable individuals who analyzed earlier versions of the 
legislation.
  The major objective consumer bankruptcy reform is to achieve an 
appropriate balance between debtor and creditor rights that will 
increase creditor recoveries while offering relief to deserving 
debtors. Those who need an immediate fresh start should get it--but 
those who can afford to make significant payments out of future income 
should be required to do so.
  Under H.R. 833 as reported, individuals or couples with income levels 
exceeding adjusted regional median figures that take into account 
household size generally will not be able to remain in Chapter 7 if 
they can make payments of at least $100.00 per month out of future 
income to general unsecured creditors. Chapter 7 offers a financial 
fresh start--without encumbering future income--to debtors who are 
prepared to give up all of their nonexempt assets. Those who cannot 
stay in Chapter 7 as a result of the pending legislation generally will 
have the option of participating in a Chapter 13 repayment plan for 
five years and qualifying for a limited discharge eventually.

  Bankruptcy reform is needed to address deficiencies in current 
bankruptcy processes and mitigate adverse impacts of bankruptcy 
filings. Congress is responding to the many developments since the 
Bankruptcy Code's enactment over a generation ago--including a 
burgeoning bankruptcy caseload that now exceeds 1.4 million annual 
filings.

[[Page H2667]]

  We can seek to reduce financial losses that result from greatly 
increased filings while treating debtors and their spouses and children 
with compassion. In that regard, I plan to offer an amendment relating 
to the living expenses of debtors who will be channeled into five-year 
repayment plans.
  I am optimistics that the results of my Committee's work and our 
actions on the Floor today will be to provide for bankruptcy processes 
that increase creditor recoveries and operate fairly. If so, we will be 
able to point to an important legislative achievement on a subject of 
great economic significance to the American people.
  I urge my colleagues, after giving careful consideration to the 
amendments we will be debating today, to support passage of H.R. 833.

Shipping Antitrust Hearing Wednesday; Judiciary to Study Competition in 
                          Deregulated Industry

       What: Oversight Hearing on ``Antitrust Aspects of the Ocean 
     Shipping Reform Act of 1998.'' Committee on the Judiciary.
       When: Wednesday, May 5, 1999, at 10:00 a.m.
       Where: 2141 Rayburn House Office Building.
       On May 1, legislation deregulating the ocean shipping 
     industry went into effect, even as new issues regarding 
     competitive practices in the industry have arisen. The 
     justification for the industry's antitrust exemption has been 
     called into question as it primarily benefits foreign 
     carriers at the expense of American shippers, while a new 
     investigation has unearthed alleged anti-competitive activity 
     of some carriers.
     Shipping's continued antitrust exemption poses the questions 
         . . .
       Did the 1998 Ocean Shipping Reform Act strike the right 
     balance between carriers and non-vessel owning common 
     carriers (NVOs) in allowing ocean carriers to use 
     confidential service contracts, but not the NVOs?
       Is antitrust immunity still justified in light of the new 
     environment and the startling findings of anti-competitive 
     activity made in a recent investigative report on the 
     industry?
       Does it make sense to continue antitrust immunity when it 
     largely benefits foreign carriers at the expense of American 
     shippers?
       Does the Federal Maritime Commission have adequate 
     authority to deal with the kinds of practices detailed in the 
     new report, and what, if any, role can the Justice Department 
     play?
     These hearings will . . .
       Allow a complete airing of the issues raised in the 
     investigation by its author, FMC Commissioner Delmond Won.
       Further discuss the competitive issues surrounding the 
     newly deregulated shipping industry.
  Mr. CROWLEY. Mr. Chairman, I rise today in support of H.R. 833, the 
``Bankruptcy Reform Act of 1999.''
  Mr. Chairman, a record 1.42 million personal bankruptcy filings were 
recorded in 1998, rising a staggering 500 percent since 1980. Despite 
strong economic growth, low unemployment and rising disposable income, 
personal bankruptcies are soaring, costing over $40 billion in the past 
year alone. Without serious reform, these trends promise to continue 
growing every year, costing consumers and businesses even more money.
  The Bankruptcy Reform Act of 1999 is an important piece of 
legislation that will start to end the abuse and restore responsibility 
to the bankruptcy system. H.R. 833 closes loopholes in current law that 
encourages debtors to take advantage of the system and avoid paying 
their debts. Too many times debts are wiped out, instead of worked out.
  This legislation provides a fair needs based system that takes 
debtors' special circumstances into account while assuring that those 
who can afford to pay are required to do so.
  Additionally, this bill puts the needs of women and children first. 
Under current law, child support and alimony payments rank seventh on 
the priority lists of payments. Under H.R. 833, child support payments 
are raised from seventh to first giving them the long overdue priority 
that they need and deserve. In addition, this bill closes various 
loopholes in bankruptcy so that filers seeking to delay or evade their 
important family obligations, will not be able to do so.
  Mr. Chairman, I strongly urge my colleagues support for this 
legislation which strikes the appropriate balance between the interests 
of consumers, debtors and creditors and will help restore personal 
responsibility and fairness to our bankruptcy system.
  Mr. PACKARD. Mr. Chairman, I rise in support in H.R. 833, the 
Bankruptcy Reform Act of 1999. It is time we revitalize our weak 
bankruptcy system, which is supposed to benefit those who need it most. 
As the sponsor of bankruptcy reform legislation during the 105th 
Congress which protected churches and charities, I strongly endorse the 
efforts of my colleagues in crafting the bill we are debating today.
  The truth is, our bankruptcy system is seriously flawed. This system 
allows individuals who have the ability to pay back a portion of their 
debts to declare bankruptcy so American taxpayers can foot the bill for 
them. This costs Americans an average of $550 a year in the form of 
higher interest rates and increased product prices.
  The original reason for people to file bankruptcy was as a last 
resort, for those in a dire situation. Unfortunately, bankruptcy has 
become a way for some reckless spenders to escape their debts. There 
are more people declaring bankruptcy in America each year than what are 
graduating from college. This is absurd! H.R. 833 will give this 
country a need-based bankruptcy system, not an easy way out for those 
who choose to not repay their debts. I firmly believe this legislation 
will restore a sense of fairness and personal obligation to our 
bankruptcy system.
  Finally, I would like to thank Chairman Gekas for his hard work on 
this legislation and for working with me to ensure the enforcement of 
my legislation, H.R. 2604 from the 105th Congress. The Religious 
Liberty and Charitable Donation Protection Act restored the right of 
debtors to tithe and give charitably after declaring bankruptcy.
  Mr. Chairman, what kind of system are we encouraging if we do not 
require people who can pay back even a portion of their debts to do so? 
I urge my colleagues to support H.R. 833, and restore a sense of 
responsibility to our bankruptcy laws.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I rise in opposition to the 
passage of H.R. 833, which restructures, I believe in a negative way, 
the way bankruptcy is handled in the United States today.
  At the outset let me say, bankruptcy is an important mechanism for 
many families and business-owners around the country. For many people 
who have filed for Chapter 7 Bankruptcy successfully, Chapter 7 has 
provided a ``fresh start'' and eventually helped them get them and 
their families on the road to recovery. But it is not a free ride. 
Chapter 7 involves liquidation of assets--surely a traumatizing and 
unpleasant situation in any person's life.
  Chapter 13 is a less dramatic form of bankruptcy that allows 
structured repayment. It is an important option for those who have an 
income sufficient to eventually pay back debt over an extended period 
of time and maintain their current assets.
  Chapter 11 bankruptcy is also important. It is the form of bankruptcy 
that allows commercial entities to reorganize so that they can satisfy 
their creditors.
  The increase in the number of bankruptcies over the past few years 
tells Congress that we are in desperate need of bankruptcy reform. Or 
does it? Perhaps--as many of us Democrats have argued, we ought to be 
taking a closer look at banking and lending practices. Perhaps the 
problems, on the consumer side, is not that people have found 
bankruptcy laws, but rather that credit card companies and other 
creditors have flooded our constituency with undeserved credit lines. 
Will we ever find out if this is the case? No, because the Committee on 
Banking and Financial Services did not look at this bill.
  So already, we are working under the assumption that bankruptcy 
reform is needed because consumers are abusing the system. This premise 
is a dangerous one, and it shows, because this bill is pockmarked with 
provisions that give power to credit card companies and collection 
agencies--and it does nothing to make creditors responsible for their 
own actions. It gives them carte blanche to lend without fear of 
reprisal, and creates an atmosphere strikingly similar to the one 
surrounding the savings and loan industry in the mid-1980s (following 
deregulation).
  The Chairman said it himself during our markup of this bill in the 
Judiciary Committee when defending an amendment that he had passed. He 
said

       I have been told with great sincerity that [my amendment] 
     is a deal breaker. That it is a killer. That some of the 
     credit card folks will walk away from the bill if it is 
     passed. I found that a bit much. I asked my staff to give me 
     a list of what the creditors are getting out of this bill. I 
     have pages and pages and pages of advantages the creditor 
     community is getting out of this bill. . . . I was going to 
     read a list of what the creditors are getting out of this 
     bill. I won't do it. I assume you know. But there are, I 
     don't know, 12 or 13 pages of single-spaced print of changes 
     that benefit the creditors. . . . There ought to be a little 
     give on the part of the creditor community[,] there doesn't 
     seem to be.

  Even the Chair's cry for a ``little flexibility'' could not be heeded 
by the Members of his own party on the Committee. Does that tell us 
anything about what is pushing this bill through Congress? Are these 
reforms guided by reason, or by solidarity with big lenders?
  Who does this bill hurt? Small business-owners, bankruptcy trustees, 
women and children. Why women and children? Because it contains 
provisions which allow credit card companies to transform their 
``investments'' into non-dischargeable debt. This puts women

[[Page H2668]]

and children expecting domestic support on the same footing as credit 
card companies--and when both must fight to get the monies that they 
deserve, who do you think can afford to pay the better lawyers? Who do 
you think will get to those funds first? The credit card companies, of 
course. That is why this bill is strongly opposed by the National 
Women's Law Center.

  But families and children are not the only ones hurt by this bill. It 
muddies the structure of the bankruptcy system. It replaces our current 
mechanism used to determine whether a debtor may file for Chapter 7 or 
Chapter 13 with an IRS ``means test'' that was developed for an 
entirely different purpose--collecting taxes. It is this section that 
has drawn the ire of consumer groups, women's and children's 
organizations, and the Democratic Members of our Committee--and 
rightfully so. It is a provision that was never recommended by the 
National Bankruptcy Commission, who has been the primary group studying 
the bankruptcy system and the need for bankruptcy reform.
  Sure, the IRS-developed ``means test'' is easy to use, but does that 
make it right? Is it a bright line or a rubber stamp? Is it not our 
responsibility to look at where the bright line lies, rather than on 
the fact that it is a bright line? Are we allowing form to rule over 
substance?
  At committee and at rules I offered several amendments that would 
have made this a better bill, a bill that would be more responsive to 
the needs of all Americans, and not just those that work in glass 
towers. I offered amendments that would have protected victims of 
managed care disasters and tobacco companies. I offered amendments that 
would have protected our seniors that rely on social security as their 
primary source of income. I offered amendments that would have allowed 
recipients of federal disaster assistance to not be penalized by the 
bankruptcy system. How these reasonable amendments were not accepted I 
cannot say--but I can say that this bill does not do right by the 
American people.
  The bill raises more questions than it answers, especially for 
America's families. I urge each of you to vote against it, and work 
with us to provide meaningful bankruptcy reform that eschews personal 
and financial responsibility from both debtors and creditors.
  Mr. CRAMER. Mr. Chairman, I rise in support of H.R. 833, the 
Bankruptcy Reform Act.
  H.R. 833, is a common sense piece of legislation that reforms our 
deeply flawed bankruptcy system. Under our current bankruptcy system, 
we have seen an increase in bankruptcy filings by more than 400 percent 
since 1980. Last year alone, during booming economic times with 
historic lows in unemployment, more than 1.4 million Americans filed 
for bankruptcy. This is a 3.6 percent increase over the number of 
individuals filing for personal bankruptcy in 1997 and an increase of 
94.7 percent over 1990 levels. Moreover, 70 percent of these 1.4 
million bankruptcies were filed under Chapter 7, the most permissive 
and lenient form of bankruptcy. Under Chapter 7, individuals can simply 
erase most of their accumulated debt. In effect, the permissiveness of 
the current system, while allowing some consumers to escape their 
debts, ultimately harms all consumers by forcing industry to charge 
higher prices and impose tighter credit.
  Clearly, Mr. Chairman, something is wrong with our current bankruptcy 
system. Our current system makes it too easy for individuals to compile 
huge amounts of debt and then escape responsibility for repaying those 
debts. For far too many individuals, bankruptcy has become an easy and 
convenient way to skirt their financial obligations rather than an 
instrument of last resort.
  H.R. 833 reforms this flawed system. H.R. 833 simply says that those 
consumers who can afford to pay back their debt should be required to 
do so. This bill does this by instituting a means test that requires 
those individuals making more than the regional median income, and who 
can pay more than $6,000 in debts over five years to file for Chapter 
13 bankruptcy, as opposed to Chapter 7. By doing this, the bill 
prevents individuals with high incomes from walking away from their 
debts. At the same time, the bill continues to provide those 
individuals in need of bankruptcy protection with the opportunity to 
file for the more lenient Chapter 7 bankruptcy. The bill also attempts 
to discourage individuals from repeatedly filing for bankruptcy 
protection by terminating the automatic stay against collection of 
debts for an individual who files for bankruptcy within one year of 
clearing up an earlier bankruptcy.
  Mr. Chairman, H.R. 833 is a good bill that cuts down on the blatant 
abuse of the current system by instituting several much needed reforms. 
This bill restores balance, accountability, and common sense to our 
deeply flawed system. Some, I know will argue that the bill is extreme 
and will end up harming families who are in desperate need of 
bankruptcy relief. But, Mr. Chairman, I believe this bill strikes the 
right balance between seeking to protect those in most dire need, while 
restoring personal responsibility to our bankruptcy system.
  Therefore, Mr. Chairman, I urge my colleagues to support H.R. 833.
  Mr. BEREUTER. Mr. Chairman, this Member rises today to express his 
support for H.R. 833, the Bankruptcy Reform Act, of which he is an 
original cosponsor.
  First, this Member would thank the distinguished gentleman from 
Pennsylvania [Mr. Gekas], Chairman of the Judiciary Subcommittee on 
Commercial and Administrative Law, for introducing this bill. This 
Member would also like to express his appreciation to the distinguished 
gentleman from Illinois [Mr. Hyde], the Chairman of the Judiciary 
Committee, for his efforts in getting this measure to the House Floor 
for consideration.
  This Member supports the Bankruptcy Reform Act for numerous reasons; 
however, the most important reasons include the following:
  First, and of preeminent importance to the nation's agriculture 
sector, this Member supports the provision in H.R. 833 which 
permanently extends Chapter 12 of the Bankruptcy Code for family 
farmers. Chapter 12 bankruptcy allows family farmers to reorganize 
their debts as compared to liquidating their assets. Chapter 12 
bankruptcy has been a viable option for family farmers nationwide. It 
has allowed family farmers to reorganize their assets in a manner which 
balances the interests of creditors and the future success of the 
involved farmer.
  If Chapter 12 bankruptcy provisions are not permanently extended for 
family farmers, this will have a drastic impact on an agricultural 
sector already reeling from low commodity prices. Not only will many 
family farmers have to end their operations, but also land values will 
likely plunge downward. Such a decrease in land values will affect both 
the ability of family farmers to earn a living and the manner in which 
banks, making agricultural loans, conduct their lending activities. 
This Member has received many contacts from his constituents regarding 
the extension of Chapter 12 bankruptcy because of the situation now 
being faced by our nation's farm families--although the U.S. economy is 
generally healthy, it is clear that agricultural sector is hurting.
  Second, this Member supports the provision in H.R. 833 which provides 
for a means testing (needs-based) formula when determining whether an 
individual should file for Chapter 7 or Chapter 13 bankruptcy. The vast 
majority of bankruptcy filers--approximately 70%--choose Chapter 7 of 
the Bankruptcy Code, which erases all debts. Some Chapter 7 filers 
actually have the capacity to repay some of what they owe, but they 
choose Chapter 7 bankruptcy and are able to walk away from these debts. 
For example, the stories in which an individual filed for Chapter 7 
bankruptcy and then goes out takes a nice vacation and/or buys a new 
car are too common. Moreover, the status quo is costing the average 
American individual and family in increased costs for consumer goods 
and credit because of the amount of debt which is never repaid to 
creditors.
  As a response to these concerns, the means test of H.R. 833 will help 
ensure that high income filers, who could repay some of what they owe, 
are required to file Chapter 13 bankruptcy as compared to Chapter 7. 
This needs-based system takes a debtor's income, expenses, obligations 
and any special circumstances into account when determining whether he 
or she has the capacity to repay a portion of their debts. However, 
this bill still preserves the right to file bankruptcy, for an 
individual or family who legitimately need a ``fresh start'', which was 
the original intent behind bankruptcy legislation.
  Third, this Member also supports the positive steps that H.R. 833 
takes in ensuring that those who owe child support and alimony payments 
are not allowed to evade this vital, familial responsibility by filing 
bankruptcy. The bill moves child support payments and alimony into the 
highest payment priority.
  In closing, this Member would encourage his colleagues to support 
H.R. 833, the Bankruptcy Reform Act.
  Ms. ROYBAL-ALLARD. Mr. Chairman, I rise in opposition to this bill.
  I would gladly vote for H.R. 833 if it were a ``balanced and 
sensible'' bankruptcy reform bill. Unfortunately, H.R. 833 fails to 
include reasonable consumer protections.
  Because the closed rule prevented Mr. Delahunt, Mr. Watt, Mr. LaFalce 
and I from offering an amendment to ensure that the credit industry 
assumes its responsibility for the dramatic rise in consumer debt this 
bill allows misleading and coercive practices to continue.
  My staff collected credit card solicitations they receive in the 
mail. In a matter of weeks, we amassed dozens of solicitations, 
offering free cookbooks, calling cards, sweatshirts, and frequent flyer 
miles. All promoted low teaser rates in giant print. But you need a 
magnifying glass to see the permanent rate, which can jump to 25%.
  With these aggressive marketing techniques, fundamental bankruptcy 
reform must

[[Page H2669]]

include reasonable consumer protections. Without them, H.R. 833 is a 
lost opportunity for this House.
  I urge my colleagues to oppose the bill.
  The CHAIRMAN pro tempore (Mr. LaHood). All time for general debate 
has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill is considered as an original bill for 
the purpose of amendment under the 5-minute rule and is considered as 
read.
  The text of the committee amendment in the nature of a substitute is 
as follows:

                                H.R. 833

       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--CONSUMER BANKRUPTCY PROVISIONS

                   Subtitle A--Needs based bankruptcy

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

              Subtitle B--Consumer Bankruptcy Protections

Sec. 105. Definitions.
Sec. 106. Enforcement.
Sec. 107. Sense of the congress.
Sec. 108. Discouraging abusive reaffirmation practices.
Sec. 109. Promotion of alternative dispute resolution.
Sec. 110. Enhanced disclosure for credit extensions secured by a 
              dwelling.
Sec. 111. Dual use debit card.
Sec. 112. Enhanced disclosures under an open-end credit plan.
Sec. 113. Protection of savings earmarked for the postsecondary 
              education of children.
Sec. 114. Effect of discharge.
Sec. 115. Limiting trustee liability.
Sec. 116. Reinforce the fresh start.
Sec. 117. Discouraging bad faith repeat filings.
Sec. 118. Curbing abusive filings.
Sec. 119. Debtor retention of personal property security.
Sec. 120. Relief from the automatic stay when the debtor does not 
              complete intended surrender of consumer debt collateral.
Sec. 121. Giving secured creditors fair treatment in chapter 13.
Sec. 122. Restraining abusive purchases on secured credit.
Sec. 123. Fair valuation of collateral.
Sec. 124. Domiciliary requirements for exemptions.
Sec. 125. Restrictions on certain exempt property obtained through 
              fraud.
Sec. 126. Rolling stock equipment.
Sec. 127. Discharge under chapter 13.
Sec. 128. Bankruptcy judgeships.
Sec. 129. Additional amendments to title 11, United States Code.
Sec. 130. Amendment to section 1325 of title 11, United States Code.
Sec. 131. Application of the codebtor stay only when the stay protects 
              the debtor.
Sec. 132. Adequate protection for investors.
Sec. 133. Limitation on luxury goods.
Sec. 134. Giving debtors the ability to keep leased personal property 
              by assumption.
Sec. 135. Adequate protection of lessors and purchase money secured 
              creditors.
Sec. 136. Automatic stay.
Sec. 137. Extend period between bankruptcy discharges.
Sec. 138. Definition of domestic support obligation.
Sec. 139. Priorities for claims for domestic support obligations.
Sec. 140. Requirements to obtain confirmation and discharge in cases 
              involving domestic support obligations.
Sec. 141. Exceptions to automatic stay in domestic support obligation 
              proceedings.
Sec. 142. Nondischargeability of certain debts for alimony, 
              maintenance, and support.
Sec. 143. Continued liability of property.
Sec. 144. Protection of domestic support claims against preferential 
              transfer motions.
Sec. 145. Clarification of meaning of household goods.
Sec. 146. Nondischargeable debts.
Sec. 147. Monetary limitation on certain exempt property.
Sec. 148. Bankruptcy fees.
Sec. 149. Collection of child support.
Sec. 150. Excluding employee benefit plan participant contributions and 
              other property from the estate.
Sec. 151. Clarification of postpetition wages and benefits.
Sec. 152. Exceptions to automatic stay in domestic support obligation 
              proceedings.
Sec. 153. Automatic stay inapplicable to certain proceedings against 
              the debtor.

                TITLE II--DISCOURAGING BANKRUPTCY ABUSE

Sec. 201. Reenactment of chapter 12.
Sec. 202. Meetings of creditors and equity security holders.
Sec. 203. Protection of retirement savings in bankruptcy.
Sec. 204. Protection of refinance of security interest.
Sec. 205. Executory contracts and unexpired leases.
Sec. 206. Creditors and equity security holders committees.
Sec. 207. Amendment to section 546 of title 11, United States Code.
Sec. 208. Limitation.
Sec. 209. Amendment to section 330(a) of title 11, United States Code.
Sec. 210. Postpetition disclosure and solicitation.
Sec. 211. Preferences.
Sec. 212. Venue of certain proceedings.
Sec. 213. Period for filing plan under chapter 11.
Sec. 214. Fees arising from certain ownership interests.
Sec. 215. Claims relating to insurance deposits in cases ancillary to 
              foreign proceedings.
Sec. 216. Defaults based on nonmonetary obligations.
Sec. 217. Sharing of compensation.
Sec. 218. Priority for administrative expenses.

           TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS

Sec. 301. Definition of disinterested person.
Sec. 302. Miscellaneous improvements.
Sec. 303. Extensions.
Sec. 304. Local filing of bankruptcy cases.
Sec. 305. Permitting assumption of contracts.

             TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

              TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM

Sec. 601. Creditor representation at first meeting of creditors.
Sec. 602. Audit procedures.
Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 604. Dismissal for failure to timely file schedules or provide 
              required information.
Sec. 605. Adequate time to prepare for hearing on confirmation of the 
              plan.
Sec. 606. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the 
              Federal Rules of Bankruptcy Procedure.
Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy 
              cases.
Sec. 609. Study of bankruptcy impact of credit extended to dependent 
              students.
Sec. 610. Prompt relief from stay in individual cases.
Sec. 611. Stopping abusive conversions from chapter 13.
Sec. 612. Bankruptcy appeals.
Sec. 613. GAO study.

                       TITLE VII--BANKRUPTCY DATA

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

                 TITLE VIII--BANKRUPTCY TAX PROVISIONS

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

[[Page H2670]]

Sec. 817. Standards for tax disclosure.
Sec. 818. Setoff of tax refunds.

            TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES

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

                 TITLE X--FINANCIAL CONTRACT PROVISIONS

Sec. 1001. Treatment of certain agreements by conservators or --
              receivers of insured depository institutions.
Sec. 1002. Authority of the corporation with respect to failed and 
              failing institutions.
Sec. 1003. Amendments relating to transfers of qualified financial 
              contracts.
Sec. 1004. Amendments relating to disaffirmance or repudiation of 
              qualified financial contracts.
Sec. 1005. Clarifying amendment relating to master agreements.
Sec. 1006. Federal Deposit Insurance Corporation Improvement Act of 
              1991.
Sec. 1007. Bankruptcy Code amendments.
Sec. 1008. Recordkeeping requirements.
Sec. 1009. Exemptions from contemporaneous execution ---requirement.
Sec. 1010. Damage measure.
Sec. 1011. Sipc stay.
Sec. 1012. Asset-backed securitizations.
Sec. 1013. Federal Reserve collateral requirements.
Sec. 1014. Effective date; application of ---amendments.

                    TITLE XI--TECHNICAL CORRECTIONS

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

      TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1201. Effective date; application of amendments.
                TITLE I--CONSUMER BANKRUPTCY PROVISIONS
                   Subtitle A--Needs based bankruptcy

     SEC. 101. CONVERSION.

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

     SEC. 102. DISMISSAL OR CONVERSION.

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

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

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

       (I) by striking ``but not at the request or suggestion of'' 
     and inserting ``the 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 second and third sentences and 
     inserting the following:
       ``(2)(A)(i) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter, the court shall presume abuse exists if the 
     debtor's current monthly income less estimated administrative 
     expenses and reasonable attorneys' fees, and amounts set 
     forth in clauses (ii) for monthly expenses (which shall 
     include, if applicable, the continuation of actual 
     expenses of a dependent child under the age of 18 for 
     tuition, books, and required fees at a private elementary 
     or secondary school, not exceeding $10,000 per year, which 
     amount shall be adjusted pursuant to section 104(b)), 
     (iii) for monthly payments on account of secured debts, 
     and (iv) for monthly unsecured priority debt payments, and 
     multiplied by 60 months is not less than $6,000.
       ``(ii) The debtor's monthly expenses shall be the debtor's 
     applicable monthly expense amounts specified under the 
     National Standards and Local Standards, and the debtor's 
     applicable monthly expenses for the categories specifically 
     listed as Other Necessary Expenses 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. In addition, if it is demonstrated that it is 
     reasonable and necessary, the debtor may also subtract an 
     allowance of up to 5% of the food and clothing categories as 
     specified by the National Standards issued by the Internal 
     Revenue Service. Notwithstanding any other provision of this 
     clause, the debtor's monthly expenses shall not include any 
     payments for debts.
       ``(iii) The debtor's average monthly payments on account of 
     secured debts shall be calculated as the total of all amounts 
     scheduled as contractually due to secured creditors in each 
     month of the 60 months following the date of the petition, 
     and dividing that total by 60 months.
       ``(iv) The debtor's monthly unsecured priority debt 
     payments (including payments for priority child support and 
     alimony claims) shall be calculated as the total amount of 
     unsecured debts entitled to priority, and dividing the total 
     by 60 months.
       ``(v) For the purposes of this subsection, a family or 
     household shall consist of the debtor, the debtor's spouse, 
     and the debtor's dependents, but not a legally separated 
     spouse unless the spouse files a joint case with the debtor.
       ``(B) In any proceeding brought under this subsection, the 
     presumption of abuse may be rebutted only by demonstrating 
     extraordinary circumstances that require additional expenses 
     or adjustment of current monthly income. In order to 
     establish extraordinary circumstances, the debtor must 
     itemize each additional expense or adjustment of income and 
     provide documentation for such expenses or adjustment of 
     income and a detailed explanation of the extraordinary 
     circumstances which make such expenses or adjustment of 
     income necessary and reasonable. The debtor shall attest 
     under oath to the accuracy of any information provided to 
     demonstrate that additional expenses or adjustment to income 
     are required. The presumption of abuse may be rebutted only 
     if such additional expenses or adjustments to income cause 
     the debtor's current monthly income less estimated 
     administrative expenses and reasonable attorneys' fees, and 
     the amounts set forth in clauses (ii), (iii), and (iv) of 
     subparagraph (A) when multiplied by 60 to be less than 
     $6,000.
       ``(C) As part of the schedule of current income and 
     expenditures required under section 521 of this title, the 
     debtor shall include a statement of the debtor's current 
     monthly income, and the calculations which determine whether 
     a presumption arises under subparagraph (A)(i), showing how 
     each amount is calculated. The bankruptcy rules promulgated 
     under section 2075 of title 28, United States Code, shall 
     prescribe a form for such statement and may provide general 
     rules on its content.
       ``(D) No judge, United States trustee, panel trustee, 
     bankruptcy administrator or other party in interest shall 
     bring a motion under this paragraph if the debtor and the 
     debtor's spouse combined, as of the date of the order for 
     relief, have current monthly total income equal to or less 
     than the regional median household monthly income calculated 
     on a semiannual basis for a household of equal size. However, 
     for a household of more than 4 individuals, the median income 
     shall be that of a household of 4 individuals plus $583 for 
     each additional member of that household.
       ``(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 paragraph 
     (2)(A)(i) does not apply or has been rebutted, the court 
     shall consider--
       ``(A) whether the debtor filed the petition in bad faith; 
     or
       ``(B) the totality of the circumstances (including whether 
     the debtor seeks to reject a personal services contract and 
     the financial need for such rejection as sought by the 
     debtor) of the debtor's financial situation demonstrates 
     abuse.
       ``(4)(A) If a panel trustee appointed under section 
     586(a)(1) of title 28 or bankruptcy administrator brings a 
     motion for dismissal or conversion under this subsection and 
     the court grants that motion and finds that the action of the 
     counsel for the debtor in filing under this chapter violated 
     Rule 9011, the court shall assess damages which may include 
     ordering:
       ``(i) the counsel for the debtor to reimburse the trustee 
     for all reasonable costs in prosecuting the motion, including 
     reasonable attorneys' fees.
       ``(ii) the assessment of an appropriate civil penalty 
     against the counsel for the debtor; and
       ``(iii) the payment of the civil penalty to the panel 
     trustee, bankruptcy administrator or the United States 
     trustee.
       ``(B) In the case of a petition filed under sections 301, 
     302, or 303 of this title and supporting lists, schedules and 
     documents filed under section 521(a)(1) of this title, the 
     signature of an attorney on the petition 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, lists, schedules, and 
     documents--
       ``(I) are well grounded in fact; and
       ``(II) are warranted by existing law or a good faith 
     argument for the extension, modification, or reversal of 
     existing law and do not constitute an abuse under paragraph 
     (1) of this subsection.
       ``(5) The court may award a debtor all reasonable costs in 
     contesting a motion filed by a party in interest (not 
     including a trustee or the United States trustee) under this 
     subsection (including reasonable attorneys' fees) if--
       ``(A) the court does not grant the motion; and
       ``(B) the court finds that--

[[Page H2671]]

       ``(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.
       ``(6) However, only the court, the United States trustee, 
     or the trustee may file a motion to dismiss or convert a case 
     under this subsection if the current monthly income of the 
     debtor and the debtor's spouse combined, as of the date of 
     the order for relief, when multiplied by 12, is less than the 
     highest national median family income last reported by the 
     Bureau of the Census for a family of equal or lesser size, or 
     in the case of a household of 1 person, the national median 
     household income for 1 earner. Notwithstanding the foregoing, 
     the national median family income for a family of more than 4 
     individuals shall be the national median family income last 
     reported by the Bureau of the Census for a family of 4 
     individuals plus $583 for each additional member of the 
     family.
       ``(7) In making a determination whether to dismiss a case 
     under this section, the court may not take into consideration 
     whether a debtor has made, or continues to make, charitable 
     contributions (that meet the definition of `charitable 
     contribution' under section 548(d)(3)) to any qualified 
     religious or charitable entity or organization (as that term 
     is defined in section 548(d)(4)).
       ``(8) Not later than 3 years after the date of enactment of 
     the Bankruptcy Reform Act of 1999, the Director of the 
     Executive Office for United States Trustees shall submit a 
     report, to the Committee on the Judiciary of the House of 
     Representatives and the Committee on the Judiciary of the 
     Senate, containing its findings regarding the utilization of 
     the Internal Revenue Service standards for determining the 
     current monthly expenses under section 707(b)(1)(A)(ii) of 
     title 11, United States Code, of debtors and the impact that 
     the application of such standards has had on debtors and on 
     the bankruptcy courts. Such report may include 
     recommendations for amendments to such title, consistent with 
     the Director's findings.''.
       (b) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (10) the following:
       ``(10A) `current monthly income' means the average monthly 
     income from all sources derived which the debtor, or in a 
     joint case, the debtor and the debtor's spouse, receive 
     without regard to whether it is taxable income, in the 180 
     days preceding the date of determination, and includes any 
     amount paid by anyone other than the debtor or, in a joint 
     case, the debtor and the debtor's spouse, on a regular basis 
     to the household expenses of the debtor or the debtor's 
     dependents and, in a joint case, the debtor's spouse if not 
     otherwise a dependent, but excludes payments to victims of 
     war crimes or crimes against humanity;''; and
       (2) by inserting after paragraph (17) the following:
       ``(17A) `estimated administrative expenses and reasonable 
     attorneys' fees' means 10 percent of projected payments under 
     a chapter 13 plan;''.
       (c) Administrative Provisions.--Section 704 of title 11, 
     United States Code, is amended--
       (1) in paragraph (8) by striking ``and'' at the end;
       (2) in paragraph (9) by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(10)(A) With respect to an individual debtor, the trustee 
     shall review all materials filed by the debtor, consider all 
     information presented at the first meeting of creditors, and 
     within 10 days after the first meeting of creditors file with 
     the court a statement as to whether the debtor's case should 
     be presumed to be an abuse under section 707(b) of this 
     title. The court shall provide a copy of such statement to 
     all creditors within 5 days after such statement is filed. 
     If, based on the filing of such statement with the court, the 
     trustee determines that the debtor's case should be presumed 
     to be an abuse under section 707(b) of this title and if the 
     current monthly income of the debtor and the debtor's spouse 
     combined, as of the date of the order for relief, when 
     multiplied by 12, is not less than the highest national 
     median family income reported for a family of equal or lesser 
     size, or in the case of a household of 1 person, the national 
     median household income for 1 earner, then the trustee shall 
     within 30 days of the filing of such statement, either--
       ``(i) file a motion to dismiss or convert under section 
     707(b) of this title; or
       ``(ii) file a statement setting forth the reasons the 
     trustee or bankruptcy administrator does not believe that 
     such a motion would be appropriate.
       ``(B) Notwithstanding subparagraph (A), for purposes of 
     this paragraph the national family income for a family of 
     more than 4 individuals shall be the national median family 
     income last reported  by the Bureau of the Census for a 
     family of 4 individuals plus $583 for each additional 
     member of the family.''.
       (d) Clerical Amendment.--The table of sections at the 
     beginning of chapter 7 of title 11, United States Code, is 
     amended by striking the item relating to section 707 and 
     inserting the following:

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

     SEC. 103. NOTICE OF ALTERNATIVES.

       Section 342(b) of title 11, United States Code, is amended 
     to read as follows:
       ``(b) Before the commencement of a case under this title by 
     an individual whose debts are primarily consumer debts, the 
     clerk shall give to such individual written notice 
     containing--
       ``(1) a brief description of--
       ``(A) chapters 7, 11, 12, and 13 and the general purpose, 
     benefits, and costs of proceeding under each of those 
     chapters; and
       ``(B) the types of services available from credit 
     counseling agencies; and
       ``(2) statements specifying that--
       ``(A) a person who knowingly and fraudulently conceals 
     assets or makes a false oath or statement under penalty of 
     perjury in connection with a bankruptcy case shall be subject 
     to fine, imprisonment, or both; and
       ``(B) all information supplied by a debtor in connection 
     with a bankruptcy case is subject to examination by the 
     Attorney General.''.

     SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

       (a) Development of Financial Management and Training 
     Curriculum and Materials.--The Director of the Executive 
     Office for United States Trustees (in this section referred 
     to as the ``Director'') shall consult with a wide range of 
     individuals who are experts in the field of debtor education, 
     including trustees who are appointed under chapter 13 of 
     title 11 of the United States Code and who operate financial 
     management education programs for debtors, and shall develop 
     a financial management training curriculum and materials that 
     can be used to educate individual debtors on how to better 
     manage their finances.
       (b) Test--(1) The Director shall select 6 judicial 
     districts of the United States in which to test the 
     effectiveness of the financial management training curriculum 
     and materials developed under subsection (a).
       (2) For a 18-month period beginning not later than 270 days 
     after the date of the enactment of this Act, such curriculum 
     and materials shall be, for the 6 judicial districts selected 
     under paragraph (1), used as the instructional course 
     concerning personal financial management for purposes of 
     section 111 of this title.
       (c) Evaluation.--(1) During the 1-year period referred to 
     in subsection (b), the Director shall evaluate the 
     effectiveness of--
       (A) the financial management training curriculum and 
     materials developed under subsection (a); and
       (B) a sample of existing consumer education programs such 
     as those described in the Report of the National Bankruptcy 
     Review Commission (October 20, 1997) that are representative 
     of consumer education programs carried out by the credit 
     industry, by trustees serving under chapter 13 of title 11 of 
     the United States Code, and by consumer counselling groups.
       (2) Not later than 3 months after concluding such 
     evaluation, the Director shall submit a report to the Speaker 
     of the House of Representatives and the President pro tempore 
     of the Senate, for referral to the appropriate committees of 
     the Congress, containing the findings of the Director 
     regarding the effectiveness of such curriculum, such 
     materials, and such programs and their costs.
              Subtitle B--Consumer Bankruptcy Protections

     SEC. 105. DEFINITIONS.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (2) the following:
       ``(3) `assisted person' means any person whose debts 
     consist primarily of consumer debts and whose non-exempt 
     assets are less than $150,000;'';
       (2) by inserting after paragraph (4) the following:
       ``(4A) `bankruptcy assistance' means any goods or services 
     sold or otherwise provided to an assisted person with the 
     express or implied purpose of providing information, advice, 
     counsel, document preparation or filing, or attendance at a 
     creditors' meeting or appearing in a proceeding on behalf of 
     another or providing legal representation with respect to a 
     proceeding under this title;''; and
       (3) by inserting after paragraph (12A) the following:
       ``(12B) `debt relief agency' means any person who provides 
     any bankruptcy assistance to an assisted person in return for 
     the payment of money or other valuable consideration, or who 
     is a bankruptcy petition preparer pursuant to section 110 of 
     this title, but does not include any person that is any of 
     the following or an officer, director, employee or agent 
     thereof--
       ``(A) any nonprofit organization which is exempt from 
     taxation under section 501(c)(3) of the Internal Revenue Code 
     of 1986;
       ``(B) any creditor of the person to the extent the creditor 
     is assisting the person to restructure any debt owed by the 
     person to the creditor; or
       ``(C) any depository institution (as defined in section 3 
     of the Federal Deposit Insurance Act) or any Federal credit 
     union or State credit union (as those terms are defined in 
     section 101 of the Federal Credit Union Act), or any 
     affiliate or subsidiary of such a depository institution or 
     credit union;''.
       (b) Conforming Amendment.--In section 104(b)(1) by 
     inserting ``101(3),'' after ``sections''.

     SEC. 106. ENFORCEMENT.

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

     ``Sec. 526. Debt relief agency enforcement

       ``(a) A debt relief agency shall not--
       ``(1) fail to perform any service which the debt relief 
     agency has told the assisted person or prospective assisted 
     person the agency would provide that person in connection 
     with the preparation for or activities during a proceeding 
     under this title;
       ``(2) make any statement, or counsel or advise any assisted 
     person to make any statement in any document filed in a 
     proceeding under this title, which is untrue and misleading 
     or which upon the exercise of reasonable care, should be 
     known by the debt relief agency to be untrue or misleading;
       ``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission,

[[Page H2672]]

     what services the debt relief agency can reasonably expect to 
     provide that person, or the benefits an assisted person may 
     obtain or the difficulties the person may experience if the 
     person seeks relief in a proceeding pursuant to this title; 
     or
       ``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of that person 
     filing a proceeding under this title or in order to pay an 
     attorney or bankruptcy petition preparer fee or charge for 
     services performed as part of preparing for or representing a 
     debtor in a proceeding under this title.''.
       ``(b) Assisted Person Waivers Invalid.--Any waiver by any 
     assisted person of any protection or right provided by or 
     under this section shall not be enforceable against the 
     debtor by any Federal or State court or any other person, but 
     may be enforced against a debt relief agency.
       ``(c) Noncompliance.--
       ``(1) Any contract between a debt relief agency and an 
     assisted person for bankruptcy assistance which does not 
     comply with the material requirements of this section 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 shall be liable to an assisted 
     person in the amount of any fees or charges in connection 
     with providing bankruptcy assistance to such person which the 
     debt relief agency has received, for actual damages, and for 
     reasonable attorneys' fees and costs if the debt relief 
     agency is found, after notice and hearing, to have--
       ``(A) intentionally or negligently failed to comply with 
     any provision of this section with respect to a bankruptcy 
     case or related proceeding of the assisted person;
       ``(B) provided bankruptcy assistance to an assisted person 
     in a case or related proceeding which is dismissed or 
     converted because of the debt relief agency's intentional or 
     negligent failure to file bankruptcy papers, including papers 
     specified in section 521 of this title; or
       ``(C) intentionally or negligently disregarded the material 
     requirements of this title or the Federal Rules of Bankruptcy 
     Procedure applicable to such debt relief agency.
       ``(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 this section, 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 
     and in addition to any other remedy provided under Federal or 
     State law, if the court, on its own motion or on the motion 
     of the United States trustee or the debtor, finds that a 
     person intentionally violated this section, or engaged in a 
     clear and consistent pattern or practice of violating this 
     section, the court may--
       ``(A) enjoin the violation of such section; or
       ``(B) impose an appropriate civil penalty against such 
     person.
       ``(c) Relation to State Law.--This section 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, is amended by 
     inserting after the item relating to section 527, the 
     following:

``526. Debt relief agency enforcement.''.

     SEC. 107. SENSE OF THE CONGRESS.

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

     SEC. 108. DISCOURAGING ABUSIVE REAFFIRMATION PRACTICES.

       Section 524 of title 11, United States Code, 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 adding ``and'' at the end; and
       (iii) by adding at the end the following:
       ``(C) if the consideration for such agreement is based on a 
     wholly unsecured consumer debt (except for debts owed to 
     creditors defined in section 461(b)(1)(A)(iv) of title 12, 
     United States Code), such  agreement contains a clear and 
     conspicuous statement which advises the debtor--
       ``(i) that the debtor is entitled to a hearing before the 
     court at which the debtor shall appear in person and at which 
     the court will decide whether the agreement is an undue 
     hardship, not in the debtor's best interest, and not the 
     result of a threat by the creditor to take any action that 
     cannot be legally taken or that is not intended to be taken; 
     and
       ``(ii) that if the debtor is represented by counsel, the 
     debtor may waive the debtor's right to such a hearing by 
     signing a statement waiving the hearing, stating that the 
     debtor is represented by counsel, and identifying such 
     counsel;''; and
       (B) in paragraph (6)(A)--
       (i) by striking ``and'' at the end of clause (i);
       (ii) by striking the period at the end of clause (ii) and 
     inserting ``; and''; and
       (iii) by adding at the end thereof the following:
       ``(iii) not entered into by the debtor as the result of a 
     threat by the creditor to take any action that cannot be 
     legally taken or that is not intended to be taken.''; and
       (2) in the 3d sentence of subsection (d)--
       (A) by striking ``of this section'' and inserting a comma; 
     and
       (B) by inserting after ``such agreement'' the following:

     ``or if the consideration for such agreement is based on a 
     wholly unsecured consumer debt (except for debts owed to 
     creditors defined in section 461(b)(1)(A)(iv) of title 12, 
     United States Code) and the debtor has not waived the 
     debtor's right to a hearing on the agreement in accordance 
     with subsection (c)(2)(C) of this section''.

     SEC. 109. 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 
     wholly on unsecured consumer debts by not more than 20 
     percent, if the debtor can prove by clear and convincing 
     evidence that the claim was filed by a creditor who 
     unreasonably refused to negotiate a reasonable alternative 
     repayment schedule proposed by an approved credit counseling 
     agency acting on behalf of the debtor, and if--
       ``(A) such offer was made within the period beginning 60 
     days before the filing of the petition;
       ``(B) such offer 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, is entitled to priority under 
     section 507 of this title, or would be paid a greater 
     percentage in a chapter 13 proceeding than offered by the 
     debtor.
       ``(2) The debtor shall have the burden of proving that the 
     proposed alternative repayment schedule was made in the 60-
     day period specified in subparagraph (A) and that the 
     creditor unreasonably refused to consider the debtor's 
     proposal.''.
       (b) Limitation on Avoidability.--Section 547 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(h) The trustee may not avoid a transfer if such transfer 
     was made as a part of an alternative repayment plan between 
     the debtor and any creditor of the debtor created by an 
     approved credit counseling agency.''.

     SEC. 110. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED 
                   BY A DWELLING.

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

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

     SEC. 111. DUAL USE DEBIT CARD.

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

[[Page H2673]]

     unauthorized-use liability for debit cards and similar access 
     devices. If the Board determines that such protections are 
     inadequate, the Board, pursuant to its authority under the 
     Electronic Funds Transfer Act, may issue regulations to 
     address such inadequacy. Any regulations issued by the Board 
     shall not be effective before 36 months after the date of the 
     enactment of this Act.

     SEC. 112. ENHANCED DISCLOSURES UNDER AN OPEN-END CREDIT PLAN.

       (a) Initial and Annual Minimum Payment Disclosure.--Section 
     127(a) of the Truth in Lending Act (15 U.S.C. 1637(a)) is 
     amended by adding at the end the following:
       ``(9) In the case of any credit or charge card account 
     under an open-end consumer credit plan on which a minimum 
     monthly or periodic payment will be required, other than an 
     account described in paragraph (8)--
       ``(A) the following statement: `The minimum payment amount 
     shown on your billing statement is the smallest payment which 
     you can make in order to keep the account in good standing. 
     This payment option is offered as a convenience and you may 
     make larger payments at any time. Making only the minimum 
     payment each month will increase the amount of interest you 
     pay and the length of time it takes to repay your outstanding 
     balance.';
       ``(B) if the plan provides that the consumer will be 
     permitted to forgo making a minimum payment during a 
     specified billing cycle, a statement, if applicable, that if 
     the consumer chooses to forgo making the minimum payment, 
     finance charges will continue to accrue; and
       ``(C) an example, based on an annual percentage rate and 
     method for determining minimum periodic payments recently in 
     effect for that creditor, and a $500 outstanding balance, 
     showing the estimated minimum periodic payment, and the 
     estimated period of time it would take to repay the $500 
     outstanding balance if the consumer paid only the minimum 
     periodic payment on each monthly or periodic statement and 
     obtained no additional extensions of credit.
       ``(10) With respect to one billing cycle per calendar year, 
     the creditor shall transmit the information required under 
     paragraph (9) to each consumer to whom the creditor is 
     required to transit a statement pursuant to subsection (b) 
     for such billing cycle. The creditor shall also transmit to 
     such consumer for such cycle a worksheet prescribed by the 
     Board to assist the consumer in determining the consumer's 
     household income and debt obligations.''.
       (b) Periodic Minimum Payment Disclosures.--Section 127(b) 
     of the Truth in Lending Act (15 U.S.C. 1637(b)) is amended by 
     adding at the end the following:
       ``(11) The following statement: `The minimum payment amount 
     shown on your billing statement is the smallest payment which 
     you can make in order to keep the account in good standing. 
     This payment option is offered as a convenience and you may 
     make larger payments at any time. Making only the minimum 
     payment each month will increase the amount of interest you 
     pay and the length of time it takes to repay your outstanding 
     balance.' ''.
       (c) Enforcement.--Section 127 of the Truth in Lending Act 
     (15 U.S.C. 1637) is amended by adding at the end the 
     following:
       ``(h) In promulgating regulations to implement the 
     disclosure of an example required under subsection (a)(9)(C) 
     and (a)(10), the Board shall set forth a model disclosure to 
     accompany the example stating that the credit features shown 
     are only an example which does not obligate the creditor, but 
     is intended to illustrate the approximate length of time it 
     could take to repay using the assumptions set forth in 
     subsection (a)(9)(C) without regard to any other factors that 
     could impact an approximate repayment period, including other 
     credit features or the consumer's payment or other behavior 
     with respect to the account. Compliance with the disclosures 
     required under subsection (a)(9)(C) and (a)(10) shall be 
     enforced exclusively by the Federal agencies set forth in 
     section 108.''.
       (d) Regulatory Implementation.--The Board of Governors of 
     the Federal Reserve System (in this section referred to as 
     the ``Board'') shall promulgate regulations implementing the 
     amendments made by subsections (a) and (b). Such regulations 
     shall take effect no earlier than the end of the 36-month 
     period beginning on the date of the enactment of this Act.
       (e) Study Required.--The Board shall conduct a study to 
     determine whether consumers have adequate information about 
     borrowing activities which may result in financial problems. 
     In studying this issue, the Board shall consider the extent 
     to which--
       (1) consumers, in establishing new credit arrangements, are 
     aware of their existing payment obligations, the need to 
     consider those obligations in deciding to take on new credit, 
     and how taking on excessive credit can result in financial 
     difficulty;
       (2) minimum periodic payment features offered in connection 
     with open-end credit plans impact consumer default rates;
       (3) consumers always make only the minimum payment 
     throughout the life of the plan;
       (4) consumers are aware that making only minimum payments 
     will increase the cost and repayment period of an open-end 
     loan; and
       (5) the availability of low minimum payment options is a 
     cause of consumers experiencing financial difficulty.
       (f) Report to Congress.--Before the end of the 2-year 
     period beginning on the date of the enactment of this Act, 
     the Board shall submit to Congress a report containing  the 
     findings of the Board in connection with the study 
     required under subsection (e).
       (g) Regulations.--The Board shall, by regulation 
     promulgated pursuant to its authority under the Truth in 
     Lending Act, require additional disclosures to consumers 
     regarding minimum payment features, including periodic 
     statement disclosures, if the Board determines that such 
     disclosures are necessary based on its findings. Any such 
     regulations promulgated by the Board shall not take effect 
     earlier than January 1, 2002.

     SEC. 113. PROTECTION OF SAVINGS EARMARKED FOR THE 
                   POSTSECONDARY EDUCATION OF CHILDREN.

       Section 522 of title 11, United States Code, is amended--
       (1) in subsection (b)(2)--
       (A) in subparagraph (A) by striking ``and'' at the end;
       (B) in subparagraph (B) by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(C) except as provided in paragraph (n), funds placed in 
     an education individual retirement account (as defined in 
     section 530(b)(1) of the Internal Revenue Code of 1986) not 
     less than 365 days before the date of entry of the order of 
     relief but only to the extent such funds--
       ``(i) are not pledged or promised to any entity in 
     connection with any extension of credit; and
       ``(ii) are not excess contributions (as described in 
     section 4973(e) of the Internal Revenue Code of 1986).''; and
       (2) by adding at the end the following:
       ``(n) For purposes of subsection (b)(3)(C), funds placed in 
     an education individual retirement account shall not be 
     exempt under this subsection--
       ``(1) unless the designated beneficiary of such account was 
     a dependent child of the debtor for the taxable year for 
     which the funds were placed in such account; and
       ``(2) to the extent such funds exceed--
       ``(A) $50,000 in the aggregate in all such accounts having 
     the same designated beneficiary; or
       ``(B) $100,000 in the aggregate in all such accounts 
     attributable to all such dependent children of the debtor.''.

     SEC. 114. 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 any injunction under subsection 
     (a)(2) which has arisen at the time of the failure.
       ``(j)(1) An individual who is injured by the willful 
     failure of a creditor to comply with the requirements for a 
     reaffirmation agreement under subsections (c) and (d), or by 
     any willful violation of the injunction under subsection 
     (a)(2), shall be entitled to recover--
       ``(A) the greater of--
       ``(i) the amount of actual damages; or
       ``(ii) $1,000; and
       ``(B) costs and attorneys' fees.
       ``(2) An action to recover for a violation specified in 
     paragraph (1) may not be brought as a class action.''.

     SEC. 115. LIMITING TRUSTEE LIABILITY.

       (a) Qualification of Trustee.--Section 322 of title 11, 
     United States Code, is amended--
       (1) in subsection (a) by adding at the end the following:
     ``The trustee in a case under this title is not liable 
     personally or on such trustee's bond for acts taken within 
     the scope of the trustee's duties or authority as delineated 
     by other sections of this title or by order of the court, 
     except to the extent that the trustee acted with gross 
     negligence. Gross negligence shall be defined as reckless 
     indifference or deliberate disregard of the trustee's 
     fiduciary duty.''; and
       (2) in subsection (c) by inserting ``for any acts within 
     the scope of the trustee's authority defined in subsection 
     (a)'' before the period at the end.
       (b) Role and Capacity of Trustee.--Section 323 of title 11, 
     United States Code, is amended--
       (1) in subsection (b) by inserting at the end the 
     following: ``in the trustee's official capacity as 
     representative of the estate'' before the period at the end; 
     and
       (2) by adding at the end the following:
       ``(c) The trustee in a case under this title may not be 
     sued, either personally, in a representative capacity, or 
     against the trustee's bond in favor of the United States--
       ``(1) for acts taken in furtherance of the trustee's duties 
     or authority in a case in which the debtor is subsequently 
     determined to be ineligible for relief under the chapter in 
     which the trustee was appointed; or
       ``(2) for the dissemination of statistics and other 
     information regarding a case or cases, unless the trustee has 
     actual knowledge that the information is false.
       ``(d) The trustee in a case under this title may not be 
     sued in a personal capacity without leave of the bankruptcy 
     court in which the case is pending.''.

     SEC. 116. REINFORCE THE FRESH START.

       (a) Restoration of an Effective Discharge.--Section 
     523(a)(17) of title 11, United States Code, is amended--
       (1) by striking ``by a court'' and inserting ``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. 117. DISCOURAGING BAD FAITH REPEAT FILINGS.

       Section 362(c) of title 11, United States Code, is 
     amended--
       (1) in paragraph (1) by striking ``and'' at the end;
       (2) in paragraph (2) by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(3) If a single or joint case is filed by or against an 
     individual debtor under chapter 7,

[[Page H2674]]

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

     SEC. 118. CURBING ABUSIVE FILINGS.

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

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

     SEC. 119. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

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

     ``If the debtor fails to so act within the 45-day period, the 
     stay under section 362(a) of this title is terminated with 
     respect to the personal property of the estate or of the 
     debtor which is affected, such property 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 brought before the expiration of such 45-day 
     period, and after notice and a hearing, that such property is 
     of consequential value or benefit to the estate, orders 
     appropriate adequate protection of the creditor's interest, 
     and orders the debtor to deliver any collateral in the 
     debtor's possession to the trustee.''; and
       (2) in section 722 by inserting ``in full at the time of 
     redemption'' before the period at the end.

     SEC. 120. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES 
                   NOT COMPLETE INTENDED SURRENDER OF CONSUMER 
                   DEBT COLLATERAL.

       Title 11, United States Code, is amended as follows--
       (1) in section 362--
       (A) by striking ``(e), and (f)'' in subsection (c) and 
     inserting in lieu thereof ``(e), (f), and (h)''; and
       (B) by redesignating subsection (h) as subsection (i) and 
     by inserting after subsection (g) the following:
       ``(h) In an individual case pursuant to chapter 7, 11, or 
     13 the stay provided by subsection (a) is terminated with 
     respect to personal property of the estate or of the debtor 
     securing in whole or in part a claim, or subject to an 
     unexpired lease, and such personal property shall no longer 
     be property of the estate if the debtor fails within the 
     applicable time set by section 521(a)(2) of this title--
       ``(1) to file timely any statement of intention required 
     under section 521(a)(2) of this title with respect to that 
     property or to indicate therein that the debtor will either 
     surrender the property or retain it and, if retaining it, 
     either redeem the property pursuant to section 722 of this 
     title, reaffirm the debt it secures pursuant to section 
     524(c) of this title, or assume the unexpired lease pursuant 
     to section 365(p) of this title if the trustee does not do 
     so, as applicable; or
       ``(2) to take timely the action specified in that statement 
     of intention, as it may be amended before  expiration of the 
     period for taking action, unless the statement of 
     intention specifies reaffirmation and the creditor refuses 
     to reaffirm on the original contract terms;

     unless the court determines on the motion of the trustee 
     filed before the expiration of the applicable time set by 
     section 521(a)(2), and after notice and a hearing, that such 
     property is of consequential value or benefit to the estate, 
     orders appropriate adequate protection of the creditor's

[[Page H2675]]

     interest, and orders the debtor to deliver any collateral in 
     the debtor's possession to the trustee. If the court does not 
     so determine an order, the stay shall terminate upon the 
     conclusion of the proceeding on the motion.''; and
       (2) in section 521, as amended by sections 603 and 604--
       (A) in paragraph (2) by striking ``consumer'';
       (B) in paragraph (2)(B)--
       (i) by striking ``forty-five days after the filing of a 
     notice of intent under this section'' and inserting ``30 days 
     after the first date set for the meeting of creditors under 
     section 341(a) of this title''; and
       (ii) by striking ``forty-five day'' the second place it 
     appears and inserting ``30-day'';
       (C) in paragraph (2)(C) by inserting ``except as provided 
     in section 362(h) of this title'' before the semicolon; and
       (D) by inserting after subsection (b) the following:
       ``(c) If the debtor fails timely to take the action 
     specified in subsection (a)(6) of this section, or in 
     paragraphs (1) and (2) of section 362(h) of this title, with 
     respect to property which a lessor or bailor owns and has 
     leased, rented, or bailed to the debtor or as to which a 
     creditor holds a security interest not otherwise voidable 
     under section 522(f), 544, 545, 547, 548, or 549 of this 
     title, nothing in this title shall prevent or limit the 
     operation of a provision in the underlying lease or agreement 
     which has the effect of placing the debtor in default under 
     such lease or agreement by reason of the occurrence, 
     pendency, or existence of a proceeding under this title or 
     the insolvency of the debtor. Nothing in this subsection 
     shall be deemed to justify limiting such a provision in any 
     other circumstance.''.

     SEC. 121. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 
                   13.

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

     SEC. 122. RESTRAINING ABUSIVE PURCHASES ON SECURED CREDIT.

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

     SEC. 123. FAIR VALUATION OF COLLATERAL.

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

     SEC. 124. DOMICILIARY REQUIREMENTS FOR 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'' and inserting ``or if the 
     debtor's domicile has not been located at a single State for 
     such 730-day period, the place in which the debtor's domicile 
     was located for 180 days immediately preceding the 730-day 
     period or for a longer portion of such 180-day period than in 
     any other place''.

     SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT PROPERTY OBTAINED 
                   THROUGH FRAUD.

       Section 522 of title 11, United States Code, as amended by 
     section 113, is amended--
       (1) in subsection (b)(2)(A) by inserting ``subject to 
     subsection (o),'' before ``any property''; and
       (2) by adding at the end the following:
       ``(o) For purposes of subsection (b)(3)(A) and 
     notwithstanding subsection (a), the value of an interest in--
       ``(1) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(2) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(3) a burial plot for the debtor or a dependent of the 
     debtor;

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

     SEC. 126. ROLLING STOCK EQUIPMENT.

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

     ``Sec. 1168. Rolling stock equipment

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

[[Page H2676]]

     ``Sec. 1110. Aircraft equipment and vessels

       ``(a)(1) Except as provided in paragraph (2) and subject to 
     subsection (b), the right of a secured party with a security 
     interest in equipment described in paragraph (3), or of a 
     lessor or conditional vendor of such equipment, to take 
     possession of such equipment in compliance with a security 
     agreement, lease, or conditional sale contract, and to 
     enforce any of its other rights or remedies, under such 
     security agreement, lease, or conditional sale contract, to 
     sell, lease, or otherwise retain or dispose of such 
     equipment, is not limited or otherwise affected by any other 
     provision of this title or by any power of the court.
       ``(2) The right to take possession and to enforce the other 
     rights and remedies described in paragraph (1) shall be 
     subject to section 362 of this title if--
       ``(A) before the date that is 60 days after the date of the 
     order for relief under this chapter, the trustee, subject to 
     the approval of the court, agrees to perform all obligations 
     of the debtor under such security agreement, lease, or 
     conditional sale contract; and
       ``(B) any default, other than a default of a kind specified 
     in section 365(b)(2) of this title, under such security 
     agreement, lease, or conditional sale contract--
       ``(i) that occurs before the date of the order is cured 
     before the expiration of such 60-day period;
       ``(ii) that occurs after the date of the order and before 
     the expiration of such 60-day period is cured before the 
     later of--
       ``(I) the date that is 30 days after the date of the 
     default; or
       ``(II) the expiration of such 60-day period; and
       ``(iii) that occurs on or after the expiration of such 60-
     day period is cured in compliance with the terms of such 
     security agreement, lease, or conditional sale contract, if a 
     cure is permitted under that agreement, lease, or contract.
       ``(3) The equipment described in this paragraph--
       ``(A) is--
       ``(i) an aircraft, aircraft engine, propeller, appliance, 
     or spare part (as defined in section 40102 of title 49) that 
     is subject to a security interest granted by, leased to, or 
     conditionally sold to a debtor that, at the time such 
     transaction is entered into, holds an air carrier operating 
     certificate issued pursuant to chapter 447 of title 49 for 
     aircraft capable of carrying 10 or more individuals or 6,000 
     pounds or more of cargo; or
       ``(ii) a documented vessel (as defined in section 30101(1) 
     of title 46) that is subject to a security interest granted 
     by, leased to, or conditionally sold to a debtor that is a 
     water carrier that, at the time such transaction is entered 
     into, holds a certificate of public convenience and necessity 
     or permit issued by the Department of Transportation; and
       ``(B) includes all records and documents relating to such 
     equipment that are required, under the terms of the security 
     agreement, lease, or conditional sale contract, to be 
     surrendered or returned by the debtor in connection with the 
     surrender or return of such equipment.
       ``(4) Paragraph (1) applies to a secured party, lessor, or 
     conditional vendor acting in its own behalf or acting as 
     trustee or otherwise in behalf of another party.
       ``(b) The trustee and the secured party, lessor, or 
     conditional vendor whose right to take possession is 
     protected under subsection (a) may agree, subject to the 
     approval of the court, to extend the 60-day period specified 
     in subsection (a)(1).
       ``(c)(1) In any case under this chapter, the trustee shall 
     immediately surrender and return to a secured party, lessor, 
     or conditional vendor, described in subsection (a)(1), 
     equipment described in subsection (a)(3), if at any time 
     after the date of the order for relief under this chapter 
     such secured party, lessor, or conditional vendor is entitled 
     pursuant to subsection (a)(1) to take possession of such 
     equipment and makes a written demand for such possession to 
     the trustee.
       ``(2) At such time as the trustee is required under 
     paragraph (1) to surrender and return equipment described in 
     subsection (a)(3), any lease of such equipment, and any 
     security agreement or conditional sale contract relating to 
     such equipment, if such security agreement or conditional 
     sale contract is an executory contract, shall be deemed 
     rejected.
       ``(d) With respect to equipment first placed in service on 
     or before October 22, 1994, for purposes of this section--
       ``(1) the term `lease' includes any written agreement with 
     respect to which the lessor and the debtor, as lessee, have 
     expressed in the agreement or in a substantially 
     contemporaneous writing that the agreement is to be treated 
     as a lease for Federal income tax purposes; and
       ``(2) the term `security interest' means a purchase-money 
     equipment security interest.''.

     SEC. 127. DISCHARGE UNDER CHAPTER 13.

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

     SEC. 128. 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 prescribed in section 152(a)(1) of 
     title 28, United States Code, for  the appointment of 
     bankruptcy judges provided for in section 152(a)(2) of 
     such title:
       (A) One additional bankruptcy judgeship for the eastern 
     district of California.
       (B) Four additional bankruptcy judgeships for the central 
     district of California.
       (C) One additional bankruptcy judgeship for the southern 
     district of Florida.
       (D) Two additional bankruptcy judgeships for the district 
     of Maryland.
       (E) One additional bankruptcy judgeship for the eastern 
     district of Michigan.
       (F) One additional bankruptcy judgeship for the southern 
     district of Mississippi.
       (G) One additional bankruptcy judgeship for the district of 
     New Jersey.
       (H) One additional bankruptcy judgeship for the eastern 
     district of New York.
       (I) One additional bankruptcy judgeship for the northern 
     district of New York.
       (J) One additional bankruptcy judgeship for the southern 
     district of New York.
       (K) One additional bankruptcy judgeship for the eastern 
     district of Pennsylvania.
       (L) One additional bankruptcy judgeship for the middle 
     district of Pennsylvania.
       (M) One additional bankruptcy judgeship for the western 
     district of Tennessee.
       (N) One additional bankruptcy judgeship for the eastern 
     district of Virginia.
       (2) Vacancies.--The first vacancy occurring in the office 
     of a bankruptcy judge in each of the judicial districts set 
     forth in paragraph (1) that--
       (A) results from the death, retirement, resignation, or 
     removal of a bankruptcy judge; and
       (B) occurs 5 years or more after the appointment date of a 
     bankruptcy judge appointed under paragraph (1);
     shall not be filled.
       (c) Extensions.--
       (1) In general.--The temporary bankruptcy judgeship 
     positions authorized for the northern district of Alabama, 
     the district of Delaware, the district of Puerto Rico, the 
     district of South Carolina, and the eastern district of 
     Tennessee under section 3(a) (1), (3), (7), (8), and (9) of 
     the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) are 
     extended until the first vacancy occurring in the office of a 
     bankruptcy judge in the applicable district resulting from 
     the death, retirement, resignation, or removal of a 
     bankruptcy judge and occurring--
       (A) 8 years or more after November 8, 1993, with respect to 
     the northern district of Alabama;
       (B) 10 years or more after October 28, 1993, with respect 
     to the district of Delaware;
       (C) 8 years or more after August 29, 1994, with respect to 
     the district of Puerto Rico;
       (D) 8 years or more after June 27, 1994, with respect to 
     the district of South Carolina; and
       (E) 8 years or more after November 23, 1993, with respect 
     to the eastern district of Tennessee.
       (2) Applicability of other provisions.--All other 
     provisions of section 3 of the Bankruptcy Judgeship Act of 
     1992 remain applicable to such temporary judgeship position.
       (d) Technical Amendment.--The first sentence of section 
     152(a)(1) of title 28, United States Code, is amended to read 
     as follows: ``Each bankruptcy judge to be appointed for a 
     judicial district as provided in paragraph (2) shall be 
     appointed by the United States court of appeals for the 
     circuit in which such district is located.''.
       (e) Travel Expenses of Bankruptcy Judges.--Section 156 of 
     title 28, United States Code, is amended by adding at the end 
     the following new subsection:
       ``(g)(1) In this subsection, the term `travel expenses'--
       ``(A) means the expenses incurred by a bankruptcy judge for 
     travel that is not directly related to any case assigned to 
     such bankruptcy judge; and
       ``(B) shall not include the travel expenses of a bankruptcy 
     judge if--
       ``(i) the payment for the travel expenses is paid by such 
     bankruptcy judge from the personal funds of such bankruptcy 
     judge; and
       ``(ii) such bankruptcy judge does not receive funds 
     (including reimbursement) from the United States or any other 
     person or entity for the payment of such travel expenses.
       ``(2) Each bankruptcy judge shall annually submit the 
     information required under paragraph (3) to the chief 
     bankruptcy judge for the district in which the bankruptcy 
     judge is assigned.
       ``(3)(A) Each chief bankruptcy judge shall submit an annual 
     report to the Director of the Administrative Office of the 
     United States Courts on the travel expenses of each 
     bankruptcy judge assigned to the applicable district 
     (including the travel expenses of the chief bankruptcy judge 
     of such district).
       ``(B) The annual report under this paragraph shall 
     include--
       ``(i) the travel expenses of each bankruptcy judge, with 
     the name of the bankruptcy judge to whom the travel expenses 
     apply;
       ``(ii) a description of the subject matter and purpose of 
     the travel relating to each travel expense identified under 
     clause (i), with the name of the bankruptcy judge to whom the 
     travel applies; and
       ``(iii) the number of days of each travel described under 
     clause (ii), with the name of the bankruptcy judge to whom 
     the travel applies.
       ``(4)(A) The Director of the Administrative Office of the 
     United States Courts shall--
       ``(i) consolidate the reports submitted under paragraph (3) 
     into a single report; and
       ``(ii) annually submit such consolidated report to 
     Congress.

[[Page H2677]]

       ``(B) The consolidated report submitted under this 
     paragraph shall include the specific information required 
     under paragraph (3)(B), including the name of each bankruptcy 
     judge with respect to clauses (i), (ii), and (iii) of 
     paragraph (3)(B).''.

     SEC. 129. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES 
                   CODE.

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

     SEC. 130. AMENDMENT TO SECTION 1325 OF TITLE 11, UNITED 
                   STATES CODE.

       Section 1325(b) of title 11, United States Code, is 
     amended--
       (1) in paragraph (1), by inserting ``to unsecured 
     creditors'' after ``to make payments'';
       (2) in paragraph (2)--
       (A) by inserting ``current monthly'' before ``income'';
       (B) by striking ``and which is not'' and inserting ``less 
     amounts'';
       (C) by inserting after ``received by the debtor'', ``(other 
     than child support payments, foster care payments, or 
     disability payments for a dependent child made in accordance 
     with applicable nonbankruptcy law and which is reasonably 
     necessary to be expended)''; and
       (D) in subparagraph (A) by inserting after ``dependent of 
     the debtor'' the following: ``, as determined in accordance 
     with section 707(b)(2)(A) and if applicable 707(b)(2)(B)''.

     SEC. 131. APPLICATION OF THE CODEBTOR STAY ONLY WHEN THE STAY 
                   PROTECTS THE DEBTOR.

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

     SEC. 132. ADEQUATE PROTECTION FOR INVESTORS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (48) the 
     following:
       ``(48A) `securities self regulatory organization' means 
     either a securities association registered with the 
     Securities and Exchange Commission pursuant to section 15A of 
     the Securities Exchange Act of 1934 or a national securities 
     exchange registered with the Securities and Exchange 
     Commission pursuant to section 6 of the Securities Exchange 
     Act of 1934;''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by section 118, is amended--
       (1) in paragraph (19) by striking ``or'' at the end;
       (2) in paragraph (20) by striking the period at the end and 
     a inserting ``; or''; and
       (3) by inserting after paragraph (20) the following:
       ``(21) under subsection (a), of the commencement or 
     continuation of an investigation or action by a securities 
     self regulatory organization to enforce such organization's 
     regulatory power; of the enforcement of an order or decision, 
     other than for monetary sanctions, obtained in an action by 
     the securities self regulatory organization to enforce such 
     organization's regulatory power; or of any act taken by the 
     securities self regulatory organization to delist, delete, or 
     refuse to permit quotation of any stock that does not meet 
     applicable regulatory requirements.''.

     SEC. 133. LIMITATION ON LUXURY GOODS.

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

     SEC. 134. GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL 
                   PROPERTY BY ASSUMPTION.

       Section 365 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(p)(1) If a lease of personal property is rejected or not 
     timely assumed by the trustee under subsection (d), the 
     leased property is no longer property of the estate and the 
     stay under section 362(a) of this title is automatically 
     terminated.
       ``(2) In the case of an individual under chapter 7, the 
     debtor may notify the creditor in writing that the debtor 
     desires to assume the lease. Upon being so notified, the 
     creditor may, at its option, notify the debtor that it is 
     willing to have the lease assumed by the debtor and may, at 
     its option, condition such assumption on cure of any 
     outstanding default on terms set by the contract. If within 
     30 days of the notice from the creditor the debtor notifies 
     the lessor in writing that the lease is assumed, the 
     liability under the lease will be assumed by the debtor and 
     not by the estate. The stay under section 362 of this title 
     and the injunction under section 524(a) of this title shall 
     not be violated by notification of the debtor and negotiation 
     of cure under this subsection. Nothing in this paragraph 
     shall require a debtor to assume a lease, or a creditor to 
     permit assumption.
       ``(3) In a case under chapter 11 of this title in which the 
     debtor is an individual and in a case under chapter 13 of 
     this title, if the debtor is the lessee with respect to 
     personal property and the lease is not assumed in the plan 
     confirmed by the court, the lease is deemed rejected as of 
     the conclusion of the hearing on confirmation. If the lease 
     is rejected, the stay under section 362 of this title and any 
     stay under section 1301 is automatically terminated with 
     respect to the property subject to the lease.''.

     SEC. 135. ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY 
                   SECURED CREDITORS.

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

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

       ``(a)(1)(A) On or before the date that is 30 days after the 
     filing of a case under this chapter, the debtor shall make 
     cash payments in an amount determined under paragraph (2), 
     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 required under subparagraph (A) 
     until the earlier of the date on which--
       ``(i) the creditor begins to receive actual payments under 
     the plan; or
       ``(ii) the debtor relinquishes possession of the property 
     referred to in subparagraph (A) to--
       ``(I) the lessor or creditor; or
       ``(II) any third party acting under claim of right, as 
     applicable.
       ``(2) The payments referred to in paragraph (1)(A) shall be 
     the contract amount and shall reduce any amount payable under 
     section 1326(a) of the title.
       ``(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 scheduled as payable under 
     the contract between the debtor and creditor.
       ``(c) Notwithstanding section 1326(b), the payments 
     referred to in subsection (a)(1)(A) shall be continued in 
     addition to plan payments under a confirmed plan until actual 
     payments to the creditor begin under that plan, if the 
     confirmed plan provides--
       ``(1) for payments to a creditor or lessor described in 
     subsection (a)(1); and
       ``(2) for the deferral of payments to such creditor or 
     lessor under the plan until the payment of amounts described 
     in section 1326(b).
       ``(d) Notwithstanding sections 362, 542, and 543, a lessor 
     or creditor described in subsection (a) may retain possession 
     of property described in that subsection that was obtained in 
     accordance with applicable law before the date of filing of 
     the petition until the first payment under subsection 
     (a)(1)(A) is received by the lessor or creditor.
       ``(e) On or before 60 days after the filling of a case 
     under this chapter, a debtor retaining possession of personal 
     property subject to a lease or securing a claim attributable 
     in whole or in part to the purchase price of such property 
     shall provide each creditor or lessor reasonable evidence of 
     the maintenance of any required insurance coverage with 
     respect to the use or ownership of such property and continue 
     to do so for so long as the debtor retains possession of such 
     property.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 13 of title 11, United States Code, is 
     amended by inserting after the item relating to section 1307 
     the following:

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

     SEC. 136. AUTOMATIC STAY.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 118 and 132, is amended--

[[Page H2678]]

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

     SEC. 137. EXTEND PERIOD BETWEEN BANKRUPTCY DISCHARGES.

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

     SEC. 138. 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. 139. 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:
       ``(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. 140. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE 
                   IN CASES INVOLVING DOMESTIC SUPPORT 
                   OBLIGATIONS.

       Title 11, United States Code, is amended--
       (1) in section 1129(a), by adding at the end the following:
       ``(14) If the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order or statute for such obligation that become payable 
     after the date on which the petition is filed.'';
       (2) in section 1325(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) if the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order for such obligation that become payable after the 
     date on which the petition is filed.''; and
       (3) in section 1328(a), as amended by section 127, 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. 141. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT 
                   OBLIGATION PROCEEDINGS.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 118, 132, and 136, is amended--
       (1) by striking paragraph (2) and inserting the following:
       ``(2) under subsection (a)--
       ``(A) of the commencement or continuation of an action or 
     proceeding for--
       ``(i) the establishment of paternity; or
       ``(ii) the establishment or modification of an order for 
     domestic support obligations; or
       ``(B) the collection of a domestic support obligation from 
     property that is not property of the estate;'';
       (2) in paragraph (25), by striking ``or'' at the end;
       (3) in paragraph (26), by striking the period at the end 
     and inserting a semicolon; and
       (4) by inserting after paragraph (26) the following:
       ``(27) under subsection (a) with respect to the withholding 
     of income pursuant to an order as specified in section 466(b) 
     of the Social Security Act (42 U.S.C. 666(b)); or
       ``(28) under subsection (a) with respect to--
       ``(A) the withholding, suspension, or restriction of 
     drivers' licenses, professional and occupational licenses, 
     and recreational licenses pursuant to State law, as specified 
     in section 466(a)(16) of the Social Security Act (42 U.S.C. 
     666(a)(16)) or with respect to the reporting of overdue 
     support owed by an absent parent to any consumer reporting 
     agency as specified in section 466(a)(7) of the Social 
     Security Act (42 U.S.C. 666(a)(7));
       ``(B) the interception of tax refunds, as specified in 
     sections 464 and 466(a)(3) of the Social Security Act (42 
     U.S.C. 664 and 666(a)(3)); or
       ``(C) the enforcement of medical obligations as specified 
     under title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.).''.

     SEC. 142. 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 (a)(15)--
       (A) by inserting ``or'' after ``court of record,'';
       (B) by striking ``unless--'' and all that follows through 
     ``debtor'' the last place it appears; and
       (3) in subsection (c), by striking ``(6), or (15)'' each 
     place it appears and inserting ``or (6)''.

     SEC. 143. 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. 144. 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. 145. CLARIFICATION OF MEANING OF HOUSEHOLD GOODS.

       Section 101 of title 11, United States Code, is amended by 
     inserting after paragraph (27) the following:
       ``(27A) `household goods' includes tangible personal 
     property normally found in or around a residence, but does 
     not include motorized vehicles used for transportation 
     purposes;''.

     SEC. 146. NONDISCHARGEABLE DEBTS.

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

     SEC. 147. MONETARY LIMITATION ON CERTAIN EXEMPT PROPERTY.

       Section 522 of title 11, United States Code, as amended by 
     section 125, is amended--

[[Page H2679]]

       (1) in subsection (b)(2)(A) by striking ``subsection (o)'' 
     and inserting ``subsections (o) and (p)'' before ``any 
     property''; and
       (2) by adding at the end the following:
       ``(p)(1) Except as provided in paragraphs (2) and (3), as a 
     result of electing under subsection (b)(3)(A) to exempt 
     property under State or local law, a debtor may not exempt 
     any interest that exceeds $250,000 in value, in the 
     aggregate, in--
       ``(A) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(B) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(C) a burial plot for the debtor or a dependent of the 
     debtor.
       ``(2) The limitation under paragraph (1) shall not apply to 
     an exemption claimed under subsection (b)(3)(A) by a family 
     farmer for the principal residence of that farmer.
       ``(3) Paragraph (1) shall not apply to debtors if 
     applicable State law expressly provides by a statute enacted 
     after the effective date of this paragraph that such 
     paragraph shall not apply to debtors.''.

     SEC. 148. BANKRUPTCY FEES.

       Section 1930 of title 28, United States Code, is amended--
       (1) in subsection (a) by striking ``Notwithstanding section 
     1915 of this title, the'' and inserting ``The''; and
       (2) by adding at the end the following:
       ``(f)(1) Pursuant to procedures prescribed by the Judicial 
     Conference of the United States, the district court or the 
     bankruptcy court may waive the filing fee in a case under 
     chapter 7 of title 11 for an individual debtor who is unable 
     to pay such fee in installments. For purposes of this 
     paragraph, the term `filing fee' means the filing fee 
     required by subsection (a), or any other fee prescribed by 
     the Judicial Conference under subsections (b) and (c) that is 
     payable to the clerk upon the commencement of a case under 
     chapter 7 of title 11.
       ``(2) The district court or the bankruptcy court may also 
     waive for such debtors other fees prescribed pursuant to 
     subsections (b) and (c).
       ``(3) This subsection does not restrict the district court 
     or the bankruptcy court from waiving, in accordance with 
     Judicial Conference policy, fees prescribed pursuant to such 
     subsections for other debtors and creditors.''.

     SEC. 149. COLLECTION OF CHILD SUPPORT.

       (a) Duties of Trustee Under Chapter 7.--Section 704 of 
     title 11, United States Code, as amended by section 102, is 
     amended--
       (1) by inserting ``(a)'' before ``The trustee'',
       (2) in paragraph (9) by striking ``and'' at the end,
       (3) in paragraph (10) by striking the period and inserting 
     ``; and'', and
       (4) by adding at the end the following:
       ``(11) 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) of this title, provide the applicable 
     notification specified in subsection (b).
       ``(b)(1) In any case described in subsection (a)(11), the 
     trustee shall--
       ``(A)(i) notify in writing the holder of the claim of the 
     right of such holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act 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 of this title, notify the holder of such 
     claim and the State child support agency of the State in 
     which such 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 that is not discharged under 
     paragraph (2), (4), or (14A) of section 523(a) of this title 
     or that was reaffirmed by the debtor under section 524(c) of 
     this title.
       ``(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, such holder or such agency may request from a 
     creditor described in paragraph (1)(B)(iii)(III) 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 such disclosure.''.
       (b) Duties of Trustee Under Chapter 13.--Section 1302 of 
     title 11, United States Code, 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 507(a)(1) of this title, provide the applicable 
     notification specified in subsection (d).'', and
       (2) 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 such holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act 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 of this title, notify the holder of the 
     claim and the State child support agency of the State in 
     which such 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 that is not discharged under 
     paragraph (2), (4), or (14A) of section 523(a) of this title 
     or that was reaffirmed by the debtor under section 524(c) of 
     this title.
       ``(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, such holder or such agency may request from a 
     creditor described in paragraph (1)(B)(iii) 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 such disclosure.''.

     SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT 
                   CONTRIBUTIONS AND OTHER PROPERTY FROM THE 
                   ESTATE.

       (a) In General.--Section 541(b) of title 11 of the United 
     States Code is amended--
       (1) by striking ``or'' at the end of paragraph (4)(B)(ii);
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``; or''; and
       (3) by inserting after paragraph (5) the following:
       ``(7) any amount or interest in property to the extent that 
     an employer has withheld amounts from the wages of employees 
     for contribution to an employee benefit plan subject to title 
     I of the Employee Retirement Income Security Act of 1974, or 
     to the extent that the employer has received amounts as a 
     result of payments by participants or beneficiaries to an 
     employer for contribution to an employee benefit plan subject 
     to title I of the Employee Retirement Income Security Act of 
     1974.''.
       (b) Application of Amendment.--The amendment made by this 
     section shall not apply to cases commenced under title 11 of 
     the United States Code before the expiration of the 180-day 
     period beginning on the date of the enactment of this Act.

     SEC. 151. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.

       Section 503(b)(1)(A) of title 11, United States Code, is 
     amended to read as follows:
       ``(A) the actual, necessary costs and expenses of 
     preserving the estate, including wages, salaries, or 
     commissions for services rendered after the commencement of 
     the case, and wages and benefits attributable to any period 
     of time after commencement of the case as a result of the 
     debtor's violation of Federal law, without regard to when the 
     original unlawful act occurred or to whether any services 
     were rendered;''.

     SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT 
                   OBLIGATION PROCEEDINGS.

       Section 362(b)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A) by striking ``or'' at the end;
       (2) in subparagraph (B) by adding ``or'' at the end; and
       (3) by adding at the end the following:
       ``(C) under subsection (a) of--
       ``(i) the withholding of income for payment of a domestic 
     support obligation pursuant to a judicial or administrative 
     order or statute for such obligation that first becomes 
     payable after the date on which the petition is filed; or
       ``(ii) the withholding of income for payment of a domestic 
     support obligation owed directly to the spouse, former spouse 
     or child of the debtor or the parent of such child, pursuant 
     to a judicial or administrative order or statute for such 
     obligation that becomes payable before the date on which the 
     petition is filed unless the court finds, after notice and 
     hearing, that such withholding would render the plan 
     infeasible;''.

     SEC. 153. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS 
                   AGAINST THE DEBTOR.

       Section 362(b)(2) of title 11, United States Code, as 
     amended by section 153, is amended--
       (1) in subparagraph (B) by striking ``or'' at the end;
       (2) by inserting after subparagraph (C) the following:
       ``(D) the commencement or continuation of a proceeding 
     concerning a child custody or visitation;
       ``(E) the commencement or continuation of a proceeding 
     alleging domestic violence; or
       ``(F) the commencement or continuation of a proceeding 
     seeking a dissolution of marriage, except to the extent the 
     proceeding concerns property of the estate;''.

[[Page H2680]]

                TITLE II--DISCOURAGING BANKRUPTCY ABUSE

     SEC. 201. REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--Chapter 12 of title 11 of the United 
     States Code, as in effect on March 31, 1999, is hereby 
     reenacted.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on March 31, 1999.

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

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

     SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

       (a) In General.--Section 522 of title 11, United States 
     Code, as amended by sections 113, 125, and 147 is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)--
       (i) by striking ``(2)(A)'' and inserting:
       ``(3) Property listed in this paragraph is--
       ``(A) subject to subsections (o) and (p),'';
       (ii) in subparagraph (B), by striking ``and'' at the end;
       (iii) in subparagraph (C), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(D) retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.'';
       (B) by striking paragraph (1) and inserting:
       ``(2) Property listed in this paragraph is property that is 
     specified under subsection (d), unless the State law that is 
     applicable to the debtor under paragraph (3)(A) specifically 
     does not so authorize.'';
       (C) in the matter preceding paragraph (2)--
       (i) by striking ``(b)'' and inserting ``(b)(1)'';
       (ii) by striking ``paragraph (2)'' both places it appears 
     and inserting ``paragraph (3)'';
       (iii) by striking ``paragraph (1)'' each place it appears 
     and inserting ``paragraph (2)''; and
       (iv) by striking ``Such property is--''; and
       (D) by adding at the end of the subsection the following:
       ``(4) For purposes of paragraph (3)(D) and subsection 
     (d)(12), the following shall apply:
       ``(A) If the retirement funds are in a retirement fund that 
     has received a favorable determination pursuant to section 
     7805 of the Internal Revenue Code of 1986, and that 
     determination is in effect as of the date of the commencement 
     of the case under section 301, 302, or 303 of this title, 
     those funds shall be presumed to be exempt from the estate.
       ``(B) If the retirement funds are in a retirement fund that 
     has not received a favorable determination pursuant to such 
     section 7805, those funds are exempt from the estate if the 
     debtor demonstrates that--
       ``(i) no prior determination to the contrary has been made 
     by a court or the Internal Revenue Service; and
       ``(ii) the retirement fund is in substantial compliance 
     with the applicable requirements of the Internal Revenue Code 
     of 1986.
       ``(C) A direct transfer of retirement funds from 1 fund or 
     account that is exempt from taxation under section 401, 403, 
     408, 408A, 414, 457, or 501(a) of the Internal Revenue Code 
     of 1986, pursuant to section 401(a)(31) of the Internal 
     Revenue Code of 1986, or otherwise, shall not cease to 
     qualify for exemption under paragraph (3)(D) or subsection 
     (d)(12) by reason of that direct transfer.
       ``(D)(i) Any distribution that qualifies as an eligible 
     rollover distribution within the meaning of section 402(c) of 
     the Internal Revenue Code of 1986 or that is described in 
     clause (ii) shall not cease to qualify for exemption under 
     paragraph (3)(D) or subsection (d)(12) by reason of that 
     distribution.
       ``(ii) A distribution described in this clause is an amount 
     that--
       ``(I) has been distributed from a fund or account that is 
     exempt from taxation under section 401, 403, 408, 408A, 414, 
     457, or 501(a) of the Internal Revenue Code of 1986; and
       ``(II) to the extent allowed by law, is deposited in such a 
     fund or account not later than 60 days after the distribution 
     of that amount.''; and
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``subsection (b)(1)'' and inserting ``subsection (b)(2)''; 
     and
       (B) by adding at the end the following:
       ``(12) Retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by sections 118, 132, 136, and 141 is 
     amended--
       (1) in paragraph (27), by striking ``or'' at the end;
       (2) in paragraph (28), by striking the period and inserting 
     ``; or'';
       (3) by inserting after paragraph (28) the following:
       ``(29) under subsection (a), of withholding of income from 
     a debtor's wages and collection of amounts withheld, pursuant 
     to the debtor's agreement authorizing that withholding and 
     collection for the benefit of a pension, profit-sharing, 
     stock bonus, or other plan established under section 401, 
     403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue 
     Code of 1986 that is sponsored by the employer of the debtor, 
     or an affiliate, successor, or predecessor of such employer--
       ``(A) to the extent that the amounts withheld and collected 
     are used solely for payments relating to a loan from a plan 
     that satisfies the requirements of section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974 or is subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) in the case of a loan from a thrift savings plan 
     described in subchapter III of title 5, that satisfies the 
     requirements of section 8433(g) of such title.''; and
       (4) by adding at the end of the flush material following 
     paragraph (29) the following: ``Paragraph (29) does not apply 
     to any amount owed to a plan referred to in that paragraph 
     that is incurred under a loan made during the 1-year 
     period preceding the filing of a petition. Nothing in 
     paragraph (29) may be construed to provide that any loan 
     made under a governmental plan under section 414(d), or a 
     contract or account under section 403(b), of the Internal 
     Revenue Code of 1986 constitutes a claim or a debt under 
     this title.''.
       (c) Exceptions to Discharge.--Section 523(a) of title 11, 
     United States Code, is amended--
       (1) by striking ``or'' at the end of paragraph (17);
       (2) by striking the period at the end of paragraph (18) and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(19) owed to a pension, profit-sharing, stock bonus, or 
     other plan established under section 401, 403, 408, 408A, 
     414, 457, or 501(c) of the Internal Revenue Code of 1986, 
     pursuant to--
       ``(A) a loan permitted under section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974) or subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) a loan from the thrift savings plan described in 
     subchapter III of title 5, that satisfies the requirements of 
     section 8433(g) of such title.

     Paragraph (19) does not apply to any amount owed to a plan 
     referred to in that paragraph that is incurred under a loan 
     made during the 1-year period preceding the filing of a 
     petition. Nothing in paragraph (19) may be construed to 
     provide that any loan made under a governmental plan under 
     section 414(d), or a contract or account under section 
     403(b), of the Internal Revenue Code of 1986 constitutes a 
     claim or a debt under this title.''.
       (d) Plan Contents.--Section 1322 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(f) A plan may not materially alter the terms of a loan 
     described in section 362(b)(29) of this title.''.

     SEC. 204. PROTECTION OF REFINANCE OF SECURITY INTEREST.

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

     SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

       Section 365(d)(4) of title 11, United States Code, is 
     amended to read as follows:
       ``(4)(A) Subject to subparagraph (B), in any case under any 
     chapter in 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 
     such 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)(i) The court may extend the period determined under 
     subparagraph (A) for 120 days upon motion of the trustee or 
     the lessor for cause.
       ``(ii) If the court grants an extension under clause (i), 
     the court may grant a subsequent extension only upon prior 
     written consent of the lessor.''.

     SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

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

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

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

     SEC. 208. LIMITATION.

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

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

       Section 330(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (3)--
       (A) in subparagraph (A) after ``awarded'', by inserting 
     ``to an examiner, chapter 11 trustee, or professional 
     person''; and
       (B) by redesignating subdivisions (A) through (E) as 
     clauses (i) through (iv), respectively; and
       (2) by adding at the 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. 210. POSTPETITION DISCLOSURE AND SOLICITATION.

       Section 1125 of title 11, United States Code, is amended by 
     adding at the end the following:

[[Page H2681]]

       ``(g) Notwithstanding subsection (b), an acceptance or 
     rejection of the plan may be solicited from a holder of a 
     claim or interest if such solicitation complies with 
     applicable nonbankruptcy law and if such holder was solicited 
     before the commencement of the case in a manner complying 
     with applicable nonbankruptcy law.''.

     SEC. 211. PREFERENCES.

       Section 547(c) of title 11, United States Code, is 
     amended--
       (1) by amending paragraph (2) to read as follows:
       ``(2) to the extent that such transfer was in payment of a 
     debt incurred by the debtor in the ordinary course of 
     business or financial affairs of the debtor and the 
     transferee, and such transfer was--
       ``(A) made in the ordinary course of business or financial 
     affairs of the debtor and the transferee; or
       ``(B) made according to ordinary business terms;'';
       (2) in paragraph (7) by striking ``or'' at the end;
       (3) in paragraph (8) by striking the period at the end and 
     inserting ``; or''; and
       (4) by adding at the end the following:
       ``(9) if, in a case filed by a debtor whose debts are not 
     primarily consumer debts, the aggregate value of all property 
     that constitutes or is affected by such transfer is less than 
     $5,000.''.

     SEC. 212. VENUE OF CERTAIN PROCEEDINGS.

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

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

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

     SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

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

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

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

     ``Sec. 304. Cases ancillary to foreign proceedings

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

     SEC. 216. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

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

     SEC. 217. SHARING OF COMPENSATION.

       Section 504 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(c) This section shall not apply with respect to sharing, 
     or agreeing to share, compensation with a bona fide public 
     service attorney referral program that operates in accordance 
     with non-Federal law regulating attorney referral services 
     and with rules of professional responsibility applicable to 
     attorney acceptance of referrals.''.

     SEC. 218. PRIORITY FOR ADMINISTRATIVE EXPENSES.

       Section 503(b) of title 11, United States Code, is 
     amended--
       (1) by deleting ``and'' at the end of paragraph (5);
       (2) by striking the period at the end of paragraph (6) and 
     inserting ``; and'';
       (3) by inserting the following after paragraph (6):
       ``(7) with respect to a nonresidential real property lease 
     previously assumed under section 365, and subsequently 
     rejected, a sum equal to all monetary obligations due, 
     excluding those arising from or relating to a failure to 
     operate or penalty provisions, for the period of one year 
     following the later of the rejection date or date of actual 
     turnover of the premises, without reduction or setoff for any 
     reason whatsoever except for sums actually received or to be 
     received from a nondebtor; and the claim for remaining sums 
     due for the balance of the term of the lease shall be a claim 
     under section 502(b)(6).''.
           TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS

     SEC. 301. DEFINITION OF DISINTERESTED PERSON.

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

     SEC. 302. MISCELLANEOUS IMPROVEMENTS.

       (a) Who May Be a Debtor.--Section 109 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(h)(1) Subject to paragraphs (2) and (3) and 
     notwithstanding any other provision of this section, an 
     individual may not be a debtor under this title unless that 
     individual has, during the 90-day period preceding the date 
     of filing of the petition of that individual, received credit 
     counseling, including, at a minimum, participation in an 
     individual or group briefing that outlined the opportunities 
     for available credit counseling and assisted that individual 
     in performing an initial budget analysis, through a credit 
     counseling program (offered through an approved credit 
     counseling service described in section 111(a)).
       ``(2)(A) Paragraph (1) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee or bankruptcy administrator of the bankruptcy court 
     of that district determines that the approved credit 
     counseling services for that district are not reasonably able 
     to provide adequate services to the additional individuals 
     who would otherwise seek credit counseling from those 
     programs by reason of the requirements of paragraph (1).
       ``(B) Each United States trustee or bankruptcy 
     administrator that makes a determination described in 
     subparagraph (A) shall review that determination not later 
     than one year after the date of that determination, and not 
     less frequently than every year thereafter.
       ``(3)(A) Subject to subparagraph (B), the requirements of 
     paragraph (1) shall not apply with respect to a debtor who 
     submits to the court a certification that--

[[Page H2682]]

       ``(i) describes exigent circumstances that merit a waiver 
     of the requirements of paragraph (1);
       ``(ii) states that the debtor requested credit counseling 
     services from an approved credit counseling service, but was 
     unable to obtain the services referred to in paragraph (1) 
     during the 5-day period beginning on the date on which the 
     debtor made that request or that the exigent circumstances 
     require filing before such 5-day period expires; 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 unless the 
     debtor 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 provide service to the additional 
     individuals who would be required to compete the 
     instructional course by reason of the requirements of this 
     section. Each United States trustee or bankruptcy 
     administrator that makes such a determination shall review 
     that determination not later than 1 year after the date of 
     that determination, and not less frequently than every year 
     thereafter.''.
       (c) Chapter 13 Discharge.--Section 1328 of title 11, United 
     States Code, as amended by section 137, 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 provide service to 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, as amended by sections 604 and 120, is amended 
     by adding at the end the following:
       ``(d) In addition to the requirements under subsection (a), 
     an individual debtor shall file with the court--
       ``(1) a certificate from the credit counseling service that 
     provided the debtor services under section 109(h); and
       ``(2) a copy of the debt repayment plan, if any, developed 
     under section 109(h) through the credit counseling service 
     referred to in paragraph (1).''.
       (e) 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

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

``111. Credit counseling services; financial management instructional 
              courses.''.
       (e) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (13) the following:
       ``(13A) `debtor's principal residence' means a residential 
     structure including incidental property when the structure 
     contains 1 to 4 units, whether or not that structure is 
     attached to real property, and includes, without limitation, 
     an individual condominium or cooperative unit or mobile or 
     manufactured home or trailer;'';
       (2) by inserting after paragraph (27A), as added by section 
     318 of this Act, the following:
       ``(27B) `incidental property' means property incidental to 
     such residence including, without limitation, property 
     commonly conveyed with a principal residence where the real 
     estate is located, window treatments, carpets, appliances and 
     equipment located in the residence, and easements, 
     appurtenances, fixtures, rents, royalties, mineral rights, 
     oil and gas rights, escrow funds and insurance proceeds;'';
       (3) in section 362(b), as amended by sections 117, 118, 
     132, 136, 141 203, 818, and 1007,--
       (A) in paragraph (28) by striking ``or'' at the end 
     thereof;
       (B) in paragraph (29) by striking the period at the end and 
     inserting ``; or''; and
       (C) by inserting after paragraph (29) the following:
       ``(30) under subsection (a), until a prepetition default is 
     cured fully in a case under chapter 13 of this title by 
     actual payment of all arrears as required by the plan, of the 
     postponement, continuation or other similar delay of a 
     prepetition foreclosure proceeding or sale in accordance with 
     applicable nonbankruptcy law, but nothing herein shall imply 
     that such postponement, continuation or other similar delay 
     is a violation of the stay under subsection (a).''; and
       (4) by amending section 1322(b)(2) to read as follows:
       ``(2) modify the rights of holders of secured claims, other 
     than a claim secured primarily by a security interest in 
     property used as the debtor's principal residence at any time 
     during 180 days prior to the filing of the petition, or of 
     holders of unsecured claims, or leave unaffected the rights 
     of holders of any class of claims;''.
       (f) Limitation.--Section 362 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(j) If one case commenced under chapter 7, 11, or 13 of 
     this title is dismissed due to the creation of a debt 
     repayment plan administered by a credit counseling agency 
     approved pursuant to section 111 of this title, then for 
     purposes of section 362(c)(3) of this title the subsequent 
     case commenced under any such chapter shall not be presumed 
     to be filed not in good faith.''.
       (g) Return of Goods Shipped.--Section 546(g) of title 11, 
     United States Code, as added by section 222(a) of Public Law 
     103-394, is amended to read as follows:
       ``(h) Notwithstanding the rights and powers of a trustee 
     under sections 544(a), 545, 547, 549, and 553 of this title, 
     if the court determines on a motion by the trustee made not 
     later than 120 days after the date of the order for relief in 
     a case under chapter 11 of this title and after notice and 
     hearing, that a return is in the best interests of the 
     estate, the debtor, with the consent of the creditor, and 
     subject to the prior rights, if any, of third parties in such 
     goods, may return goods shipped to the debtor by the creditor 
     before the commencement of the case, and the creditor may 
     offset the purchase price of such goods against any claim of 
     the creditor against the debtor that arose before the 
     commencement of the case.''.

     SEC. 303. EXTENSIONS.

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

     SEC. 304. LOCAL FILING OF BANKRUPTCY CASES.

       Section 1408 of title 28, United States Code, is amended--
       (1) by striking ``Except'' and inserting ``(a) Except''; 
     and
       (2) by adding at the end the following:
       ``(b) For the purposes of subsection (a), if the debtor is 
     a corporation, the domicile and residence of the debtor are 
     conclusively presumed to be where the debtor's principal 
     place of business in the United States is located.''.

     SEC. 305. PERMITTING ASSUMPTION OF CONTRACTS.

       (a) Section 365(c) of title 11, United States Code, is 
     amended to read as follows:
       ``(c)(1) The trustee may not assume or assign an executory 
     contract or unexpired lease of the debtor, whether or not the 
     contract or lease prohibits or restricts assignment of rights 
     or delegation of duties, if--
       ``(A)(i) applicable law excuses a party to the contract or 
     lease from accepting performance from or rendering 
     performance to an assignee of the contract or lease, whether 
     or not the contract or lease prohibits or restricts 
     assignment of rights or delegation of duties; and
       ``(ii) the party does not consent to the assumption or 
     assignment; or
       ``(B) the contract is a contract to make a loan, or extend 
     other debt financing or financial accommodations, to or for 
     the benefit of the debtor, or to issue a security of the 
     debtor.
       ``(2) Notwithstanding paragraph (1)(A) and applicable 
     nonbankruptcy law, in a case under chapter 11 of this title, 
     a trustee in a case in which a debtor is a corporation, or a 
     debtor in possession, may assume an executory contract or 
     unexpired lease of the debtor, whether or not the contract or 
     lease prohibits or restricts assignment of rights or 
     delegation of duties.
       ``(3) The trustee may not assume or assign an unexpired 
     lease of the debtor of nonresidential real property, whether 
     or not the contract or lease prohibits or restricts 
     assignment of rights or delegation of duties, if the lease 
     has been terminated under applicable nonbankruptcy law before 
     the order for relief.''.
       (b) Section 365(d) of title 11, United States Code, is 
     amended by striking paragraphs (5), (6), (7), (8), and (9), 
     and redesignating paragraph (10) as paragraph (5).
       (c) Section 365(e) of title 11, United States Code, is 
     amended to read as follows:
       ``(e)(1) Notwithstanding a provision in an executory 
     contract or unexpired lease, or in applicable law, an 
     executory contract or unexpired lease of the debtor may not 
     be terminated or modified, and any right or obligation under 
     such contract or lease may not be terminated or modified, at 
     any time after the commencement of the case solely because of 
     a provision in such contract or lease that is conditioned 
     on--

[[Page H2683]]

       ``(A) the insolvency or financial condition of the debtor 
     at any time before the closing of the case;
       ``(B) the commencement of a case under this title; or
       ``(C) the appointment of or taking possession by a trustee 
     in a case under this title or a custodian before such 
     commencement.
       ``(2) Paragraph (1) does not apply to an executory contract 
     or unexpired lease of the debtor if the trustee may not 
     assume or assign, and the debtor in possession may not 
     assume, the contract or lease by reason of the provisions of 
     subsection (c) of this section.''.
       (d) Section 365(f)(1) of title 11, United States Code, is 
     amended by striking the semicolon and all that follows 
     through ``event''.
             TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS

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

       (a) Section 1125(a)(1) of title 11, United States Code, is 
     amended by inserting before the semicolon following:

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

     SEC. 402. DEFINITIONS.

       (a) Definitions. Section 101 of title 11, United States 
     Code, is amended by striking paragraph (51C) and inserting 
     the following:
       ``(51C) `small business case' means a case filed under 
     chapter 11 of this title in which the debtor is a small 
     business debtor; and
       ``(51D) `small business debtor' means (A) a person 
     (including affiliates of such person that are also debtors 
     under this title) that has aggregate noncontingent, 
     liquidated secured and unsecured debts as of the date of the 
     petition or the order for relief in an amount not more than 
     $4,000,000 (excluding debts owed to 1 or more affiliates or 
     insiders), except that if a group of affiliated debtors has 
     aggregate noncontingent liquidated secured and unsecured 
     debts greater than $4,000,000 (excluding debt owed to 1 or 
     more affiliates or insiders), then no member of such group is 
     a small business debtor;''.
       (b) Conforming Amendment.--Section 1102(a)(3) of title 11, 
     United States Code, is amended by inserting ``debtor'' after 
     ``small business'' .

     SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

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

     SEC. 404. UNIFORM NATIONAL REPORTING REQUIREMENTS.

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

     ``Sec. 308. Debtor reporting requirements

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

``308. Debtor reporting requirements.''.

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

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

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

     SEC. 406. DUTIES IN SMALL BUSINESS CASES.

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

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

       ``(a) 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 responsible individual, meetings 
     scheduled by the court or the United States trustee, 
     including initial debtor interviews and meetings of creditors 
     convened under section 341 of this title;
       ``(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) of this title, maintain 
     insurance customary and appropriate to the industry;
       ``(6)(A) timely file tax returns;
       ``(B) subject to section 363(c)(2) of this title, timely 
     pay all administrative expense tax claims, except those being 
     contested by appropriate proceedings being diligently 
     prosecuted; and
       ``(C) subject to section 363(c)(2) of this title, establish 
     1 or more separate deposit accounts not later than 10 
     business days after the date of order for relief (or as soon 
     thereafter as possible if all banks contacted decline the 
     business) and deposit therein, not later than 1 business day 
     after receipt thereof or a responsible time set by the court, 
     all taxes payable for periods beginning after the date the 
     case is commenced that are collected or withheld by the 
     debtor for governmental units unless the court waives this 
     requirement after notice and hearing; and
       ``(7) allow the United States trustee, or its designated 
     representative, to inspect the debtor's business premises, 
     books, and records at reasonable times, after reasonable 
     prior written notice, unless notice is waived by the 
     debtor.''.
       (b) Technical Amendment.--The table of sections of chapter 
     11, United States Code, is amended by inserting after the 
     item relating to section 1114 the following:

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

     SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.

       Section 1121(e) of title 11, United States Code, is amended 
     to read as follows:
       ``(e) In a small business case--
       ``(1) only the debtor may file a plan until after 90 days 
     after the date of the order for relief, unless a trustee has 
     been appointed under this chapter, or unless the court, on 
     request of a party in interest and after notice and hearing, 
     shortens such time;
       ``(2) the debtor shall file a plan, and any necessary 
     disclosure statement, not later than 90 days after the date 
     of the order for relief, unless the United States Trustee has 
     appointed under section 1102(a)(1) of this title a committee 
     of unsecured creditors that the court has determined, before 
     the 90 days has expired, is sufficiently active and 
     representative to provide effective oversight of the debtor; 
     and
       ``(3) the time periods specified in paragraphs (1) and (2) 
     of this subsection and the time fixed in section 1129(e) of 
     this title for confirmation of a plan, may be extended only 
     as follows:

[[Page H2684]]

       ``(A) On request of a party in interest made within the 
     respective periods, and after notice and hearing, the court 
     may for cause grant one or more extensions, cumulatively not 
     to exceed 60 days, if the movant establishes--
       ``(i) that no cause exists to dismiss or convert the case 
     or appoint a trustee or examiner under subparagraphs (A) (I) 
     of section 1112(b) of this title; and
       ``(ii) that there is a reasonable possibility the court 
     will confirm a plan within a reasonable time;
       ``(B) On request of a party in interest made within the 
     respective periods, and after notice and hearing, the court 
     may for cause grant one or more extensions in excess of those 
     authorized under subparagraph (A) of this paragraph, if the 
     movant establishes:
       ``(i) that no cause exists to dismiss or convert the case 
     or appoint a trustee or examiner under subparagraphs (A) (I) 
     of section 1112(b)(3) of this title; and
       ``(ii) that it is more likely than not that the court will 
     confirm a plan within a reasonable time; and
       ``(C) a new deadline shall be imposed whenever an extension 
     is granted.''.

     SEC. 408. PLAN CONFIRMATION DEADLINE.

       Section 1129 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) In a small business case, the debtor shall confirm a 
     plan not later than 150 days after the date of the order for 
     relief unless--
       ``(1) the United States Trustee has appointed, under 
     section 1102(a)(1) of this title, a committee of unsecured 
     creditors that the court has determined, before the 150 days 
     has expired, is sufficiently active and representative to 
     provide effective oversight of the debtor; or
       ``(2) such 150-day period is extended as provided in 
     section 1121(e)(3) of this title.''.

     SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.

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

     SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.

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

     SEC. 411. SCHEDULING CONFERENCES.

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

     SEC. 412. SERIAL FILER PROVISIONS.

       Section 362 of title 11, United States Code, as amended by 
     section 302, is amended--
       (1) in subsection (i) as so redesignated by section 122--
       (A) by striking ``An'' and inserting ``(1) Except as 
     provided in paragraph (2), an''; and
       (B) by adding at the end the following:
       ``(2) If such violation is based on an action taken by an 
     entity in the good-faith belief that subsection (h) applies 
     to the debtor, then recovery under paragraph (1) against such 
     entity shall be limited to actual damages.''; and
       (2) by inserting after subsection (j), as added by section 
     302, the following:
       ``(k)(1) Except as provided in paragraph (2) of this 
     subsection, the provisions of subsection (a) of thissection 
     shall not apply in a case in which the debtor--
       ``(A) is a debtor in a case under this title pending at the 
     time the petition is filed;
       ``(B) was a debtor in a case under this title which was 
     dismissed for any reason by an order that became final in the 
     2-year period ending on the date of the order for relief 
     entered with respect to the petition;
       ``(C) was a debtor in a case under this title in which a 
     chapter 11, 12, or 13 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 debtor described in 
     subparagraph (A), (B), or (C).
       ``(2) This subsection shall not apply--
       ``(A) to a case initiated by an involuntary petition filed 
     by a creditor that is not an insider or affiliate of the 
     debtor; or
       ``(B) after such time as the debtor, after notice and a 
     hearing, demonstrates by a preponderance of the evidence, 
     that the filing of such petition resulted from circumstances 
     beyond the control of the debtor and not foreseeable at the 
     time the earlier case was filed; and that it is more likely 
     than not that the court will confirm a plan, other than a 
     liquidating plan, within a reasonable time.''.

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

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

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

       Not later than 2 years after the date of the enactment of 
     this Act, the Administrator of the Small Business 
     Administration, in consultation

[[Page H2685]]

     with the Attorney General, the Director of the Administrative 
     Office of United States Trustees, and the Director of the 
     Administrative Office of the United States Courts, shall--
       (1) conduct a study to determine--
       (A) the internal and external factors that cause small 
     businesses, especially sole proprietorships, to become 
     debtors in cases under title 11 of the United States Code and 
     that cause certain small businesses to successfully complete 
     cases under chapter 11 of such title; and
       (B) how Federal laws relating to bankruptcy may be made 
     more effective and efficient in assisting small businesses to 
     remain viable; and
       (2) submit to the President pro tempore of the Senate and 
     the Speaker of the House of Representatives a report 
     summarizing that study.

     SEC. 415. PAYMENT OF INTEREST.

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

     SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

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

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

       Section 901(a) of title 11, United States Code, is 
     amended--
       (1) by inserting ``555, 556,'' after ``553,''; and
       (2) by inserting ``559, 560, 561, 562'' after ``557,''.
              TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM

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

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

     SEC. 602. AUDIT PROCEDURES.

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

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

       (a) Notice.--Section 342 of title 11, United States Code, 
     is amended--
       (1) in subsection (c)--
       (A) by striking ``, but the failure of such notice to 
     contain such information shall not invalidate the legal 
     effect of such notice''; and
       (B) by adding the following at the end:

     ``If the credit agreement between the debtor and the creditor 
     or the last communication before the filing of the petition 
     in a voluntary case from the creditor to a debtor who is an 
     individual states an account number of the debtor which is 
     the current account number of the debtor with respect to any 
     debt held by the creditor against the debtor, the debtor 
     shall include such account number in any notice to the 
     creditor required to be given under this title. If the 
     creditor has specified to the debtor an address at which the 
     creditor wishes to receive correspondence regarding the 
     debtor's account, any notice to the creditor required to be 
     given by the debtor under this title shall be given at such 
     address. For the purposes of this section, `notice' shall 
     include, but shall not be limited to, any correspondence from 
     the debtor to the creditor after the commencement of the 
     case, any statement of the debtor's intention under section 
     521(a)(2) of this title, notice of the commencement of any 
     proceeding in the case to which the creditor is a party, and 
     any notice of the hearing under section 1324 of this 
     title.'';
       (2) by adding at the end the following:
       ``(d) At any time, a creditor in a case of an individual 
     debtor under chapter 7 or 13 may file with the court and 
     serve on the debtor a notice of the address to be used to 
     notify the creditor in that case. After 5 days following 
     receipt of such notice, any notice the court or the debtor is 
     required to give the creditor shall be given at that address.
       ``(e) An entity may file with the court a notice stating 
     its address for notice in cases under chapters 7 and 13. 
     After 30 days following the filing of such notice, any notice 
     in any case filed under chapter 7 or 13 given by the court 
     shall be to that address unless specific notice is given 
     under subsection (d) with respect to a particular case.
       ``(f) Notice given to a creditor other than as provided in 
     this section shall not be effective notice until it has been 
     brought to the attention of the creditor. If the creditor has 
     designated a person or department to be responsible for 
     receiving notices concerning bankruptcy cases and has 
     established reasonable procedures so that bankruptcy notices 
     received by the creditor will be delivered to such department 
     or person, notice will not be brought to the attention of the 
     creditor until received by such person or department. No 
     sanction under section 362(h) of this title or any other 
     sanction which a court may impose on account of violations of 
     the stay under section 362(a) of this title or failure to 
     comply with section 542 or 543 of this title may be imposed 
     on any action of the creditor unless the action takes place 
     after the creditor has received notice of the commencement of 
     the case effective under this section.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 604, 120, and 302, is 
     amended--
       (1) by inserting ``(a)'' before ``The debtor shall--'';
       (2) by striking paragraph (1) and inserting the following:
       ``(1) file--
       ``(A) a list of creditors; and
       ``(B) unless the court orders otherwise--

[[Page H2686]]

       ``(i) a schedule of assets and liabilities;
       ``(ii) a schedule of current monthly income and current 
     expenditures prepared in accordance with section 707(b)(2);
       ``(iii) a statement of the debtor's financial affairs and, 
     if applicable, a certificate--

       ``(I) of an attorney whose name is on the petition as the 
     attorney for the debtor or any bankruptcy petition preparer 
     signing the petition pursuant to section 110(b)(1) of this 
     title indicating that such attorney or bankruptcy petition 
     preparer delivered to the debtor any notice required by 
     section 342(b) of this title; or
       ``(II) if no attorney for the debtor is indicated and no 
     bankruptcy petition preparer signed the petition, of the 
     debtor that such notice was obtained and read by the debtor;

       ``(iv) copies of any Federal tax returns, including any 
     schedules or attachments, filed by the debtor for the 3-year 
     period preceding the order for relief;
       ``(v) copies of all payment advices or other evidence of 
     payment, if any, received by the debtor from any employer of 
     the debtor in the period 60 days prior to the filing of the 
     petition; and
       ``(vi) a statement disclosing any reasonably anticipated 
     increase in income or expenditures over the 12-month period 
     following the date of filing;'';
       (3) by adding at the end the following:
       ``(e)(1) At any time, a creditor, in the case of an 
     individual under chapter 7 or 13, may file with the court 
     notice that the creditor requests the petition, schedules, 
     and a statement of affairs filed by the debtor in the case 
     and the court shall make those documents available to the 
     creditor who requests those documents at a reasonable cost 
     within 5 business days after such request.
       ``(2) At any time, a creditor in a case under chapter 13 
     may file with the court notice that the creditor requests the 
     plan filed by the debtor in the case, and the court shall 
     make such plan available to the creditor who requests such 
     plan at a reasonable cost and not later than 5 days after 
     such request.
       ``(f) An individual debtor in a case under chapter 7 or 13 
     shall file with the court--
       ``(1) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, with respect 
     to the period from the commencement of the case until such 
     time as the case is closed;
       ``(2) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, that were 
     not filed with the taxing authority when the schedules under 
     subsection (a)(1) were filed with respect to the period that 
     is 3 years before the order for relief;
       ``(3) any amendments to any of the tax returns, including 
     schedules or attachments, described in paragraph (1) or (2); 
     and
       ``(4) in a case under chapter 13, a statement subject to 
     the penalties of perjury by the debtor of the debtor's 
     current monthly income and expenditures in the preceding tax 
     year and current monthly income less expenditures for the 
     month preceding the statement prepared in accordance with 
     section 707(b)(2) 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.
       ``(g)(1) A statement referred to in subsection (f)(4) shall 
     disclose--
       ``(A) the amount and sources of income of the debtor;
       ``(B) the identity of any persons responsible with the 
     debtor for the support of any dependents of the debtor; and
       ``(C) the identity of any persons who contributed, and the 
     amount contributed, to the household in which the debtor 
     resides.
       ``(2) The tax returns, amendments, and statement of income 
     and expenditures described in paragraph (1) shall be 
     available to the United States trustee, any bankruptcy 
     administrator, any trustee, and any party in interest for 
     inspection and copying, subject to the requirements of 
     subsection (h).
       ``(h)(1) Not later than 30 days after the date of enactment 
     of the Consumer 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 
     reasonable restrictions on creditor access to tax information 
     that is required to be provided under this section to verify 
     creditor identity and to restrict use of the information 
     except with respect to the case.
       ``(3) Not later than 1 year after the date of enactment of 
     the Consumer 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) to provide timely and sufficient information to 
     creditors concerning the case; and
       ``(B) if appropriate, includes proposed legislation--
       ``(i) to further protect the confidentiality of tax 
     information or to make it better available to creditors; and
       ``(ii) to provide penalties for the improper use by any 
     person of the tax information required to be provided under 
     this section.
       ``(i) If requested by the United States trustee or a 
     trustee serving in the case, the debtor provide a document 
     that establishes the identity of the debtor, including a 
     driver's license, passport, or other document that contains a 
     photograph of the debtor and such other personal identifying 
     information relating to the debtor that establishes the 
     identity of the debtor.''.
       (c) Section 1324 of title 11, United States Code, is 
     amended--
       (1) by inserting ``(a)'' before ``After''; and
       (2) by inserting at the end thereof--
       ``(c) Whenever a party in interest is given notice of a 
     hearing on the confirmation or modification of a plan under 
     this chapter, such notice shall include the information 
     provided by the debtor on the most recent statement filed 
     with the court pursuant to section 521(a)(1)(B)(ii) or (f)(4) 
     of this title.''.

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

       Section 521 of title 11, United States Code, as amended by 
     section 603 is amended by inserting after subsection (a) the 
     following:
       ``(b)(1) Notwithstanding section 707(a) of this title, and 
     subject to paragraph (2), if an individual debtor in a 
     voluntary case under chapter 7 or 13 fails to file all of the 
     information required under subsection (a)(1) within 45 days 
     after the filing of the petition commencing the case, the 
     case shall be automatically dismissed effective on the 46th 
     day after the filing of the petition.
       ``(2) With respect to a case described in paragraph (1), 
     any party in interest may request the court to enter an order 
     dismissing the case. The court shall, if so requested, enter 
     an order of dismissal not later than 5 days after such 
     request.
       ``(3) Upon request of the debtor made within 45 days after 
     the filing of the petition commencing a case described in 
     paragraph (1), the court may allow the debtor an additional 
     period not to exceed 45 days to file the information required 
     under subsection (a)(1) if the court finds justification for 
     extending the period for the filing.''.

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

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

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

       Title 11, United States Code, is amended--
       (1) by amending section 1322(d) to read as follows:
       ``(d) If the current monthly income of the debtor and the 
     debtor's spouse combined, when multiplied by 12, is not less 
     than the highest national median family income last reported 
     by the Bureau of the Census for a family of equal or lesser 
     size or, in the case of a household of 1 person, not less 
     than the national median household income for 1 earner, the 
     plan may not provide for payments over a period that is 
     longer than 5 years. If the current monthly income of the 
     debtor and the debtor's spouse combined, when multiplied by 
     12, is less than the highest national median family income 
     for a family of equal or lesser size, or in the case of a 
     household of 1 person, the national median household income 
     for 1 earner, the plan may not provide for payments over a 
     period that is longer than 3 years, unless the court, for 
     cause, approves a longer period, but the court may not 
     approve a period that is longer than 5 years. Notwithstanding 
     the foregoing, the national median family income for a family 
     of more than 4 individuals shall be the national median 
     family income last reported by the Bureau of the Census for a 
     family of 4 individuals plus $583 for each additional member 
     of the family.'';
       (2) in section 1325(b)(1)(B) as amended by section 130--
       (A) by striking ``three year period'' and inserting 
     ``applicable commitment period''; and
       (B) by inserting at the end of subparagraph (B) the 
     following: ``The `applicable commitment period' shall be not 
     less than 5 years if the current monthly income of the debtor 
     and the debtor's spouse combined, when multiplied by 12, is 
     not less than the highest national median family income last 
     reported by the Bureau of the Census for a family of equal or 
     lesser size, or in the case of a household of 1 person, the 
     national median household income for 1 earner. 
     Notwithstanding the foregoing, the national median family 
     income for a family of more than 4 individuals shall be the 
     national median family income last reported by the Bureau of 
     the Census for a family of 4 individuals plus $583 for each 
     additional member of the family.''; and
       (3) in section 1329--
       (A) by striking in subsection (c) ``three years'' and 
     inserting ``the applicable commitment period under section 
     1325(b)(1)(B)''; and
       (B) by inserting at the end of subsection (c) the 
     following:

     ``The duration period shall be 5 years if the current monthly 
     income of the debtor and the debtor's spouse combined, when 
     multiplied by 12, is not less than the highest national 
     median family income last reported by the Bureau of the 
     Census for a family of equal or lesser size or, in the case 
     of a household of 1 person, the national median household 
     income for 1 earner, as of the date of the modification and 
     shall be 3 years if the current monthly total income of the 
     debtor and the debtor's spouse combined, when multiplied by 
     12, is less than the highest national median family income 
     last reported by the Bureau of the Census for a family of 
     equal or lesser size or, in the case of a household of 1 
     person, less than the national median household income for 1 
     earner as of the date of the modification. Notwithstanding 
     the foregoing, the national median family income for a family 
     of more than 4 individuals shall be the national median 
     family income last reported by the Bureau of the Census

[[Page H2687]]

     for a family of 4 individuals plus $583 for each additional 
     member of the family.''.

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

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

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

       (a) Amendments.--Section 1930(a)(6) of title 28, United 
     States Code, is amended--
       (1) in the 1st sentence by striking ``until the case is 
     converted or dismissed, whichever occurs first''; and
       (2) in the 2d sentence--
       (A) by striking ``The'' and inserting ``Until the plan is 
     confirmed or the case is converted (whichever occurs first) 
     the''; and
       (B) by striking ``less than $300,000;'' and inserting 
     ``less than $300,000. Until the case is converted, dismissed, 
     or closed (whichever occurs first and without regard to 
     confirmation of the plan) the fee shall be''.
       (b) Delayed Effective Date.--The amendments made by 
     subsection (a) shall take effect on October 1, 1999.

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

       Not later than 1 year after the date of the enactment of 
     this Act, the Comptroller General of the United States 
     shall--
       (1) conduct a study regarding the impact that the extension 
     of credit to individuals who are--
       (A) claimed as dependents for purposes of the Internal 
     Revenue Code of 1986; and
       (B) enrolled in post-secondary educational institutions,
     has on the rate of cases filed under title 11 of the United 
     States Code; and
       (2) submit to the Speaker of the House of Representatives 
     and the President pro tempore of the Senate a report 
     summarizing such study.

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

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

     SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13.

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

     SEC. 612. BANKRUPTCY APPEALS.

       Title 28 of the United States Code is amended by inserting 
     after section 1292 the following:

     ``Sec. 1293. Bankruptcy appeals

       ``(a) The courts of appeals (other than the United States 
     Court of Appeals for the Federal Circuit) shall have 
     jurisdiction of appeals from the following:
       ``(1) Final orders and judgments entered by bankruptcy 
     courts and district courts in cases under title 11, in 
     proceedings arising under title 11, and in proceedings 
     arising in or related to a case under title 11, including 
     final orders in proceedings regarding the automatic stay of 
     section 362 of title 11.
       ``(2) Interlocutory orders entered by bankruptcy courts and 
     district courts granting, continuing, modifying, refusing or 
     dissolving injunctions, or refusing to dissolve or modify 
     injunctions in cases under title 11, in proceedings arising 
     under title 11, and in proceedings arising in or related to a 
     case under title 11, other than interlocutory orders in 
     proceedings regarding the automatic stay of section 362 of 
     title 11.
       ``(3) Interlocutory orders of bankruptcy courts and 
     district courts entered under section 1104(a) or 1121(d) of 
     title 11, or the refusal to enter an order under such 
     section.
       ``(4) An interlocutory order of a bankruptcy court or 
     district court entered in a case under title 11, in a 
     proceeding arising under title 11, or in a proceeding arising 
     in or related to a case under title 11, if the court of 
     appeals that would have jurisdiction of an appeal of a final 
     order entered in such case or such proceeding permits, in its 
     discretion, appeal to be taken from such interlocutory order.
       ``(b) Final decisions, judgments, orders, and decrees 
     entered by a bankruptcy appellate panel under subsection (b) 
     of this section.
       ``(c)(1) The judicial council of a circuit may establish a 
     bankruptcy appellate panel composed of bankruptcy judges in 
     the circuit who are appointed by the judicial council, which 
     panel shall exercise the jurisdiction to review orders and 
     judgments of bankruptcy courts described in paragraphs (1)-
     (4) of subsection (a) of this section unless--
       ``(A) the appellant elects at the time of filing the 
     appeal; or
       ``(B) any other party elects, not later than 10 days after 
     service of the notice of the appeal;

     to have such jurisdiction exercised by the court of appeals.
       ``(2) An appeal to be heard by a bankruptcy appellate panel 
     under this subsection (b) shall be heard by 3 members of the 
     bankruptcy appellate panel, provided that a member of such 
     panel may not hear an appeal originating in the district for 
     which such member is appointed or designated under section 
     152 of this title.
       ``(3) If authorized by the Judicial Conference of the 
     United States, the judicial councils of 2 or more circuits 
     may establish a joint bankruptcy appellate panel.''.

     SEC. 613. GAO STUDY.

       (a) Study.--Not later than 270 days after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall conduct a study of the feasibility, 
     effectiveness, and cost of requiring trustees appointed under 
     title 11 of the United States Code, or the bankruptcy courts, 
     to provide to the Office of Child Support Enforcement 
     promptly after the commencement of cases by individual 
     debtors under such title, the names and social security 
     numbers of such debtors for the purposes of allowing such 
     Office to determine whether such debtors have outstanding 
     obligations for child support (as determined on the basis of 
     information in the Federal Case Registry or other national 
     database).
       (b) Report.--Not later than 300 days after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to the Speaker of the House of Representatives and the 
     President pro tempore of the Senate, a report containing the 
     results of the study required by subsection (a).
                       TITLE VII--BANKRUPTCY DATA

     SEC. 701. IMPROVED BANKRUPTCY STATISTICS.

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

     ``Sec. 159. Bankruptcy statistics

       ``(a) The clerk of each district shall compile statistics 
     regarding individual debtors with primarily consumer debts 
     seeking relief under chapters 7, 11, and 13 of title 11. 
     Those statistics shall be in a form prescribed by the 
     Director of the Administrative Office of the United States 
     Courts (referred to in this section as the `Office').
       ``(b) The Director shall--
       ``(1) compile the statistics referred to in subsection (a);
       ``(2) make the statistics available to the public; and
       ``(3) not later than October 31, 2000, and annually 
     thereafter, prepare, and submit to Congress a report 
     concerning the information collected under subsection (a) 
     that contains an analysis of the information.
       ``(c) The compilation required under subsection (b) shall--
       ``(1) be itemized, by chapter, with respect to title 11;
       ``(2) be presented in the aggregate and for each district; 
     and
       ``(3) include information concerning--
       ``(A) the total assets and total liabilities of the debtors 
     described in subsection (a), and in each category of assets 
     and liabilities, as reported in the schedules prescribed 
     pursuant to section 2075 of this title and filed by those 
     debtors;
       ``(B) the current monthly income, and average income and 
     average expenses of those debtors as reported on the 
     schedules and statements that each such debtor files under 
     sections 521 and 1322 of title 11;
       ``(C) the aggregate amount of debt discharged in the 
     reporting period, determined as the difference between the 
     total amount of debt and obligations of a debtor reported on 
     the schedules and the amount of such debt reported in 
     categories which are predominantly nondischargeable;
       ``(D) the average period of time between the filing of the 
     petition and the closing of the case;
       ``(E) for the reporting period--
       ``(i) the number of cases in which a reaffirmation was 
     filed; and
       ``(ii)(I) the total number of reaffirmations filed;
       ``(II) of those cases in which a reaffirmation was filed, 
     the number in which the debtor was not represented by an 
     attorney; and
       ``(III) of those cases, the number of cases in which the 
     reaffirmation was approved by the court;
       ``(F) with respect to cases filed under chapter 13 of title 
     11, for the reporting period--
       ``(i)(I) the number of cases in which a final order was 
     entered determining the value of

[[Page H2688]]

     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, the number of cases 
     dismissed for failure to make payments under the plan, the 
     number of cases refiled after dismissal, and the number of 
     cases in which the plan was completed, separately itemized 
     with respect to the number of modifications made before 
     completion of the plan, if any; and
       ``(iii) the number of cases in which the debtor filed 
     another case within the 6 years previous to the filing;
       ``(G) the number of cases in which creditors were fined for 
     misconduct and any amount of punitive damages awarded by the 
     court for creditor misconduct; and
       ``(H) the number of cases in which sanctions under rule 
     9011 of the Federal Rules of Bankruptcy Procedure were 
     imposed against debtor's counsel and damages awarded under 
     such Rule.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 6 of title 28, United States Code, is 
     amended by adding at the end the following:

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

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

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

     ``Sec. 589b. Bankruptcy data

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

     in each case by appropriate category and, in cases under 
     chapters 12 and 13 of title 11, date of confirmation of the 
     plan, each modification thereto, and defaults by the debtor 
     in performance under the plan.
       ``(e) Periodic Reports.--Periodic reports proposed for 
     adoption by trustees or debtors in possession under chapter 
     11 of title 11 shall, in addition to such other matters as 
     are required by law or as the Attorney General, in the 
     discretion of the Attorney General, shall propose, include--
       ``(1) information about the standard industry 
     classification, published by the Department of Commerce, for 
     the businesses conducted by the debtor;
       ``(2) length of time the case has been pending;
       ``(3) number of full-time employees as at the date of the 
     order for relief and at end of each reporting period since 
     the case was filed;
       ``(4) cash receipts, cash disbursements and profitability 
     of the debtor for the most recent period and cumulatively 
     since the date of the order for relief;
       ``(5) compliance with title 11, whether or not tax returns 
     and tax payments since the date of the order for relief have 
     been timely filed and made;
       ``(6) all professional fees approved by the court in the 
     case for the most recent period and cumulatively since the 
     date of the order for relief (separately reported, in for the 
     professional fees incurred by or on behalf of the debtor, 
     between those that would have been incurred absent a 
     bankruptcy case and those not); and
       ``(7) plans of reorganization filed and confirmed and, with 
     respect thereto, by class, the recoveries of the holders, 
     expressed in aggregate dollar values and, in the case of 
     claims, as a percentage of total claims of the class 
     allowed.''.
       (b) Technical Amendment.--The table of sections of chapter 
     39 of title 28, United States Code, is amended by adding at 
     the end the following:

``589b. Bankruptcy data.''.

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

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

     SEC. 801. TREATMENT OF CERTAIN LIENS.

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

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

     SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.

       (a) Effective Notice to Governmental Units.--Section 342 of 
     title 11, United States Code, as amended by section 603, is 
     amended by adding at the end the following:
       ``(g) If a debtor lists a governmental unit as a creditor 
     in a list or schedule, any notice required to be given by the 
     debtor under this title, any rule, any applicable law, or any 
     order of the court, shall identify the department, agency, or 
     instrumentality through which the debtor is indebted. The 
     debtor shall identify (with information such as a taxpayer 
     identification number, loan, account or contract number, or 
     real estate parcel number, where applicable), and describe 
     the underlying basis for the governmental unit's claim. If 
     the debtor's liability to a governmental unit arises from a 
     debt or obligation owed or incurred by another individual, 
     entity, or organization, or under a different name, the 
     debtor shall identify such individual, entity, organization, 
     or name.
       ``(h) The clerk shall keep and update quarterly, in the 
     form and manner as the Director of the Administrative Office 
     of the United States Courts prescribes, and make available to 
     debtors, a register in which a governmental unit may 
     designate a safe harbor mailing address for service of notice 
     in cases pending in the district. A governmental unit may 
     file a statement with the clerk designating a safe harbor 
     address to which notices are to be sent, unless such 
     governmental unit files a notice of change of address.''.
       (b) Adoption of Rules Providing Notice.--The Advisory 
     Committee on Bankruptcy Rules of the Judicial Conference 
     shall, within a reasonable period of time after the date of 
     the enactment of this Act, propose for adoption enhanced 
     rules for providing notice to State, Federal, and local 
     government units that have regulatory authority over the 
     debtor or which may be creditors in the debtor's case. Such 
     rules shall be reasonably calculated to ensure that notice 
     will reach the representatives of the governmental unit, or 
     subdivision thereof, who will be the proper persons 
     authorized to act upon the notice. At a minimum, the rules 
     should require that the debtor--
       (1) identify in the schedules and the notice, the 
     subdivision, agency, or entity in respect of which such 
     notice should be received;

[[Page H2689]]

       (2) provide sufficient information (such as case captions, 
     permit numbers, taxpayer identification numbers, or similar 
     identifying information) to permit the governmental unit or 
     subdivision thereof, entitled to receive such notice, to 
     identify the debtor or the person or entity on behalf of 
     which the debtor is providing notice where the debtor may be 
     a successor in interest or may not be the same as the person 
     or entity which incurred the debt or obligation; and
       (3) identify, in appropriate schedules, served together 
     with the notice, the property in respect of which the claim 
     or regulatory obligation may have arisen, if any, the nature 
     of such claim or regulatory obligation and the purpose for 
     which notice is being given.
       (c) Effect of Failure of Notice.--Section 342 of title 11, 
     United States Code, as amended by section 603 and 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 timely 
     notice was given in a manner reasonably calculated to satisfy 
     the requirements of this section was given, and that--
       ``(1) either the notice was timely sent to the safe harbor 
     address provided in the register maintained by the clerk of 
     the district in which the case was pending for such purposes; 
     or
       ``(2) no safe harbor address was provided in such list for 
     the governmental unit and that an officer of the governmental 
     unit who is responsible for the matter or claim had actual 
     knowledge of the case in sufficient time to act.''.

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

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

     SEC. 804. RATE OF INTEREST ON TAX CLAIMS.

       (a) Amendment.--Chapter 5 of title 11, United States Code, 
     is amended by adding at the end the following:

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

       ``If any provision of this title requires the payment of 
     interest on a tax claim or requires the payment of interest 
     to enable a creditor to receive the present value of 
     the allowed amount of a tax claim, the rate of interest 
     shall be as follows:
       ``(1) In the case of ad valorem tax claims, whether secured 
     or unsecured, other unsecured tax claims where interest is 
     required to be paid under section 726(a)(5) of this title, 
     secured tax claims, and administrative tax claims paid under 
     section 503(b)(1) of this title, the rate shall be determined 
     under applicable nonbankruptcy law.
       ``(2) In the case of all other tax claims, the minimum rate 
     of interest shall be the Federal short-term rate rounded to 
     the nearest full percent, determined under section 1274(d) of 
     the Internal Revenue Code of 1986, plus 3 percentage points.
       ``(A) In the case of claims for Federal income taxes, such 
     rate shall be subject to any adjustment that may be required 
     under section 6621(d) of the Internal Revenue Code of 1986.
       ``(B) In the case of taxes paid under a confirmed plan or 
     reorganization, such rate shall be determined as of the 
     calendar month in which the plan is confirmed.''.
       (b) Conforming Amendment.--The table of sections of 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. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.

       Section 507(a)(8)(A) of title 11, United States Code, as so 
     redesignated, is amended--
       (1) in clause (i) by inserting after ``petition'' and 
     before the semicolon ``, plus any time, plus 6 months, during 
     which the stay of proceedings was in effect in a prior case 
     under this title''; and
       (2) amend clause (ii) to read as follows:
       ``(ii) assessed within 240 days before the date of the 
     filing of the petition, exclusive of--

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

     SEC. 806. PRIORITY PROPERTY TAXES INCURRED.

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

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

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

     SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.

       Section 1141(d) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(6) Notwithstanding the provisions of paragraph (1), the 
     confirmation of a plan does not discharge a debtor which is a 
     corporation from any debt for a tax or customs duty with 
     respect to which the debtor made a fraudulent return or 
     willfully attempted in any manner to evade or defeat such 
     tax.''.

     SEC. 809. STAY OF TAX PROCEEDINGS.

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

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

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

     SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

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

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

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

     SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.

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

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

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

       ``(I) must satisfy the requirements of applicable 
     nonbankruptcy law, and includes a return

[[Page H2690]]

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

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

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

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

       (a) Filing of Prepetition Tax Returns Required for Plan 
     Confirmation.--Section 1325(a) of title 11, United States 
     Code, as amended by section 140, is amended--
       (1) in paragraph (6) by striking ``and'' at the end;
       (2) in paragraph (7) by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(8) if the debtor has filed all Federal, State, and local 
     tax returns as required by section 1308 of this title.''.
       (b) Additional Time Permitted for Filing Tax Returns.--(1) 
     Chapter 13 of title 11, United States Code, as amended by 
     section 135, is amended by adding at the end the following:

     ``Sec. 1308. Filing of prepetition tax returns

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

``1308. Filing of prepetition tax returns.''.
       (c) Dismissal or Conversion on Failure To Comply.--Section 
     1307 of title 11, United States Code, is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (2) by inserting after subsection (d) the following:
       ``(e) Upon the failure of the debtor to file tax returns 
     under section 1308 of this title, on request of a party in 
     interest or the United States trustee and after notice and a 
     hearing, the court shall dismiss a case or convert a case 
     under this chapter to a case under chapter 7 of this title, 
     whichever is in the best interests of creditors and the 
     estate.''.
       (d) Timely Filed Claims.--Section 502(b)(9) of title 11, 
     United States Code, is amended by striking the period at the 
     end and inserting ``, and except that in a case under chapter 
     13 of this title, a claim of a governmental unit for a tax in 
     respect of a return filed under section 1308 of this title 
     shall be timely if it is filed on or before 60 days after 
     such return or returns were filed as required.''.
       (e) Rules for Objections to Claims and to Confirmation.--It 
     is the sense of the Congress that the Advisory Committee on 
     Bankruptcy Rules of the Judicial Conference should, within a 
     reasonable period of time after the date of the enactment of 
     this Act, propose for adoption amended Federal Rules of 
     Bankruptcy Procedure which provide that--
       (1) notwithstanding the provisions of Rule 3015(f), in 
     cases under chapter 13 of title 11, United States Code, a 
     governmental unit may object to the confirmation of a plan on 
     or before 60 days after the debtor files all tax returns 
     required under sections 1308 and 1325(a)(7) of title 11, 
     United States Code; and
       (2) in addition to the provisions of Rule 3007, in a case 
     under chapter 13 of title 11, United States Code, no 
     objection to a tax in respect of a return required to be 
     filed under such section 1308 shall be filed until such 
     return has been filed as required.

     SEC. 817. STANDARDS FOR TAX DISCLOSURE.

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

     SEC. 818. SETOFF OF TAX REFUNDS.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 118, 132, 136, and 203, is amended--
       (1) in paragraph (29) by striking ``or'';
       (2) in paragraph (30) by striking the period at the end and 
     inserting ``; or''; and
       (3) by inserting after paragraph (30) the following:
       ``(31) under subsection (a) of the setoff of an income tax 
     refund, by a governmental unit, in respect of a taxable 
     period which ended before the order for relief against an 
     income tax liability for a taxable period which also ended 
     before the order for relief, unless--
       ``(A) prior to such setoff, an action to determine the 
     amount or legality of such tax liability under section 505(a) 
     was commenced; or
       ``(B) where the setoff of an income tax refund is not 
     permitted because of a pending action to determine the amount 
     or legality of a tax liability, the governmental unit may 
     hold the refund pending the resolution of the action.''.
            TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES

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

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

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

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

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

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

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

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

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

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

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

     ``Sec. 1501. Purpose and scope of application

       ``(a) The purpose of this 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;

[[Page H2691]]

       ``(3) fair and efficient administration of cross-border 
     insolvencies that protects the interests of all creditors, 
     and other interested entities, including the debtor;
       ``(4) protection and maximization of the value of the 
     debtor's assets; and
       ``(5) facilitation of the rescue of financially troubled 
     businesses, thereby protecting investment and preserving 
     employment.
       ``(b) This chapter applies where--
       ``(1) assistance is sought in the United States by a 
     foreign court or a foreign representative in connection with 
     a foreign proceeding;
       ``(2) assistance is sought in a foreign country in 
     connection with a case under this title;
       ``(3) a foreign proceeding and a case under this title with 
     respect to the same debtor are taking place concurrently; or
       ``(4) creditors or other interested persons in a foreign 
     country have an interest in requesting the commencement of, 
     or participating in, a case or proceeding under this title.
       ``(c) This chapter does not apply to--
       ``(1) a proceeding concerning an entity identified by 
     exclusion in subsection 109(b);
       ``(2) an individual, or to an individual and such 
     individual's spouse, who have debts within the limits 
     specified in section 109(e) and who are citizens of the 
     United States or aliens lawfully admitted for permanent 
     residence in the United States; or
       ``(3) an entity subject to a proceeding under the 
     Securities Investor Protection Act, a stockbroker subject to 
     subchapter III of chapter 7 of this title, or a commodity 
     broker subject to subchapter IV of chapter 7 of this title.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

     ``Sec. 1502. Definitions

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

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

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

     ``Sec. 1504. Commencement of ancillary case

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

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

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

     ``Sec. 1506. Public policy exception

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

     ``Sec. 1507. Additional assistance

       ``(a) Subject to the specific limitations stated elsewhere 
     in this chapter the court, upon recognition of a foreign 
     proceeding, the court 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 may commence a case under 
     section 1504 of this title by filing with the court a 
     petition for recognition of a foreign proceeding under 
     section 1515 of this title.
       ``(b) If the court grants recognition under section 1515 of 
     this title, and subject to any limitations that the court may 
     impose consistent with the policy of this chapter--
       ``(1) the foreign representative has the capacity to sue 
     and be sued in a court in the United States;
       ``(2) the foreign representative may apply directly to a 
     court in the United States for appropriate relief in that 
     court; and
       ``(3) a court in the United States shall grant comity or 
     cooperation to the foreign representative.
       ``(c) A request for comity or cooperation by a foreign 
     representative in a court in the United States shall be 
     accompanied by a certified copy of an order granting 
     recognition under section 1517 of this title.
       ``(d) If the court denies recognition under this chapter, 
     the court may issue any appropriate order necessary to 
     prevent the foreign representative from obtaining comity or 
     cooperation from courts in the United States.
       ``(e) Whether or not the court grants recognition, and 
     subject to sections 306 and 1510 of this title, a foreign 
     representative is subject to applicable nonbankruptcy law.
       ``(f) Notwithstanding any other provision of this section, 
     the failure of a foreign representative to commence a case or 
     to obtain recognition under this chapter does not affect any 
     right the foreign representative may have to sue in a court 
     in the United State to collect or recover a claim which is 
     the property of the debtor.''.

     ``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 certified copy of an order granting 
     recognition. The court where the petition for recognition has 
     been filed must be advised of the foreign representative's 
     intent to commence a case under subsection (a) prior to such 
     commencement.

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

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

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

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

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

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

[[Page H2692]]

     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 constitutes 
     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 under section 350.

     ``Sec. 1518. Subsequent information

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

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

       ``(a) From the time of filing a petition for recognition 
     until the court rules on the petition, 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) sections 361 and 362 with respect to the debtor and 
     that property of the debtor that is within the territorial 
     jurisdiction of the United States;
       ``(2) sections 363, 549, and 552 of this title apply to a 
     transfer of an interest of the debtor in property that is 
     within the territorial jurisdiction of the United States to 
     the same extent that the sections would apply to property of 
     an estate;
       ``(3) unless the court orders otherwise, the foreign 
     representative may operate the debtor's business and may 
     exercise the rights and powers of a trustee under and to the 
     extent provided by sections 363 and 552; and
       ``(4) section 552 applies to property of the debtor that is 
     within the territorial jurisdiction of the United States.''.
       ``(b) Subsection (a) does not affect the right to commence 
     an individual action or proceeding in a foreign country to 
     the extent necessary to preserve a claim against the debtor.
       ``(c) 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 an 
     individual action or proceeding concerning the debtor's 
     assets, rights, obligations or liabilities to the extent they 
     have not been stayed under section 1520(a);
       ``(2) staying execution against the debtor's assets to the 
     extent it has not been stayed under section 1520(a);
       ``(3) suspending the right to transfer, encumber or 
     otherwise dispose of any assets of the debtor to the extent 
     this right has not been suspended under section 1520(a);
       ``(4) providing for the examination of witnesses, the 
     taking of evidence or the delivery of information concerning 
     the debtor's assets, affairs, rights, obligations or 
     liabilities;
       ``(5) entrusting the administration or realization of all 
     or part of the debtor's assets within the territorial 
     jurisdiction of the United States to the foreign 
     representative or another person, including an examiner, 
     authorized by the court;
       ``(6) extending relief granted under section 1519(a); and
       ``(7) granting any additional relief that may be available 
     to a trustee, except for relief available under sections 522, 
     544, 545, 547, 548, 550, and 724(a).
       ``(b) Upon recognition of a foreign proceeding, whether 
     main or nonmain, the court may, at the request of the foreign 
     representative, entrust the distribution of all or part of 
     the debtor's assets located in the United States to the 
     foreign representative or another person, including an 
     examiner, authorized by the court, provided that the court is 
     satisfied that the interests of creditors in the United 
     States are sufficiently protected.
       ``(c) In granting relief under this section to a 
     representative of a foreign nonmain proceeding, the court 
     must be satisfied that the relief relates to assets that, 
     under the law of the United States, should be administered in 
     the foreign nonmain proceeding or concerns information 
     required in that proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under paragraphs (1), 
     (2), (3), and (6) of subsection (a).

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

       ``(a) The court may grant relief under section 1519 or 
     1521, or may modify or terminate relief under subsection (c), 
     only if the interests of the creditors and other interested 
     entities, including the debtor, are sufficiently protected.
       ``(b) The court may subject relief granted under section 
     1519 or 1521, or the operation of the debtor's business under 
     section 1520(a)(3) of this title, to conditions it considers 
     appropriate, including the giving of security or the filing 
     of a bond.
       ``(c) The court may, at the request of the foreign 
     representative or an entity affected by relief granted under 
     section 1519 or 1521, or at its own motion, modify or 
     terminate such relief.
       ``(d) Section 1104(d) shall apply to the appointment of an 
     examiner under this chapter. Any examiner shall comply with 
     the qualification requirements imposed on a trustee by 
     section 322.

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

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

     ``Sec. 1524. Intervention by a foreign representative

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

[[Page H2693]]

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

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

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

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

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

     ``Sec. 1527. Forms of cooperation

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

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

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

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

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

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

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

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

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

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

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

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

       (a) Applicability of Chapters.--Section 103 of title 11, 
     United States Code, is amended--
       (1) in subsection (a), by inserting before the period the 
     following: ``, and this chapter, sections 307, 304, 555 
     through 557, 559, and 560 apply in a case under chapter 15''; 
     and
       (2) by adding at the end the following:
       ``(j) Chapter 15 applies only in a case under such chapter, 
     except that--
       ``(1) sections 1505, 1513, and 1514 apply in all cases 
     under this title; and
       ``(2) section 1509 applies whether or not a case under this 
     title is pending.''.
       (b) Definitions.--Paragraphs (23) and (24) of title 11, 
     United States Code, are amended to read as follows:
       ``(23) `foreign proceeding' means a collective judicial or 
     administrative proceeding in a foreign country, including an 
     interim proceeding, under a law relating to insolvency or 
     adjustment of debt 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) 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 striking ``or 13'' and 
     inserting ``13, or 15,'' after ``chapter''.
       (4) Section 305(a)(2) of title 11, United States Code, is 
     amended to read:
       ``(2)(A) a petition under section 1515 of this title for 
     recognition of a foreign proceeding has been granted; and
       ``(B) the purposes of chapter 15 of this title would be 
     best served by such dismissal or suspension.''.
       (5) Section 508 of title 11, United States Code, is amended 
     by striking subsection (a) and by striking out the letter 
     ``(b)'' at the beginning of the second paragraph.
                 TITLE X--FINANCIAL CONTRACT PROVISIONS

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

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

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, loan, interest, group or index, or option;

       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan unless the Corporation determines by regulation, 
     resolution, or order to include any such agreement within the 
     meaning of such term;
       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans

[[Page H2694]]

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

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

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

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

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date the contract 
     is entered into, including, but not limited to, a repurchase 
     agreement, reverse repurchase agreement, consignment, lease, 
     swap, hedge transaction, deposit, loan, option, allocated 
     transaction, unallocated transaction, or any other similar 
     agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);

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

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

       ``(I) mean an agreement, including related terms, which 
     provides for the transfer of 1 or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in the Securities Exchange Act of 1934), mortgage loans, 
     interests in mortgage-related securities or mortgage loans, 
     eligible bankers' acceptances, qualified foreign government 
     securities or securities that are direct obligations of, or 
     that are fully guaranteed by, the United States or any agency 
     of the United States against the transfer of funds by the 
     transferee of such certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests with a 
     simultaneous agreement by such transferee to transfer to the 
     transferor thereof certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests as described 
     above, at a date certain not later than 1 year after such 
     transfers or on demand, against the transfer of funds, or any 
     other similar agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan unless the 
     Corporation determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means a security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V).

     For purposes of this clause, the term `qualified foreign 
     government security' means a security that is a direct 
     obligation of, or that is fully guaranteed by, the central 
     government of a member of the Organization for Economic 
     Cooperation and Development (as determined by regulation or 
     order adopted by the appropriate Federal banking 
     authority).''.
       (f) Definition of Swap Agreement.--Section 11(e)(8)(D)(iv) 
     of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)(D)(vi)) is amended to read as follows:
       ``(vi) Swap agreement.--The term `swap agreement' means--

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a credit spread or credit swap, option, 
     future, or forward agreement; a commodity index or commodity 
     swap, option, future, or forward agreement;
       ``(II) any agreement or transaction similar to any other 
     agreement or transaction referred to in this clause that is 
     presently, or in the future becomes, regularly entered into 
     in the swap market (including terms and conditions 
     incorporated by reference in such agreement) and that is a 
     forward, swap, future, or option on 1 or more rates, 
     currencies, commodities, equity securities or other equity 
     instruments, debt securities or other debt instruments, or 
     economic indices or measures of economic risk or value;

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

     Such term is applicable for purposes of this 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 promulgated by the Securities and 
     Exchange Commission or the Commodity Futures Trading 
     Commission.''.
       (g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of 
     the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)(D)(viii)) is amended to read as follows:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the depository 
     institutions's equity of redemption.''.

[[Page H2695]]

       (h) Treatment of Qualified Financial Contracts.--Section 
     11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)) is amended--
       (1) in subparagraph (A), by striking ``paragraph (10)'' and 
     inserting ``paragraphs (9) and (10)'';
       (2) in subparagraph (A)(i), by striking ``to cause the 
     termination or liquidation'' and inserting ``such person has 
     to cause the termination, liquidation, or acceleration'';
       (3) by amending subparagraph (A)(ii) to read as follows:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''; and
       (4) by amending subparagraph (E)(ii) to read as follows:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''.
       (i) Avoidance of Transfers.--Section 11(e)(8)(C)(i) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is 
     amended by inserting ``section 5242 of the Revised Statutes 
     of the United States (12 U.S.C. 91) or any other Federal or 
     State law relating to the avoidance of preferential or 
     fraudulent transfers,'' before ``the Corporation''.

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

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

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

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

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

       ``(ii) transfer none of the qualified financial contracts, 
     claims, property or other credit enhancement referred to in 
     clause (i) (with respect to such person and any affiliate of 
     such person).
       ``(B) Transfer to foreign bank, foreign financial 
     institution, or branch or agency of a foreign bank or 
     financial institution.--In transferring any qualified 
     financial contracts and related claims and property pursuant 
     to subparagraph (A)(i), the conservator or receiver for such 
     depository institution shall not make such transfer to a 
     foreign bank, financial institution organized under the laws 
     of a foreign country, or a branch or agency of a foreign bank 
     or financial institution unless, under the law applicable to 
     such bank, financial institution, branch or agency, to the 
     qualified financial contracts, and to any netting contract, 
     any security agreement or arrangement or other credit 
     enhancement related to 1 or more qualified financial 
     contracts, the contractual rights of the parties to such 
     qualified financial contracts, netting contracts, security 
     agreements or arrangements, or other credit enhancements are 
     enforceable substantially to the same extent as permitted 
     under this section.
       ``(C) Transfer of contracts subject to the rules of a 
     clearing organization.--In the event that a conservator or 
     receiver transfers any qualified financial contract and 
     related claims, property and credit enhancements pursuant to 
     subparagraph (A)(i) and such contract is subject to the rules 
     of a clearing organization, the clearing organization shall 
     not be required to accept the transferee as a member by 
     virtue of the transfer.
       ``(D) Definition.--For purposes of this section, the term 
     `financial institution' means a broker or dealer, a 
     depository institution, a futures commission merchant, or any 
     other institution as determined by the Corporation by 
     regulation to be a financial institution.''.
       (b) Notice to Qualified Financial Contract 
     Counterparties.--Section 11(e)(10)(A) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended by 
     amending the flush material following clause (ii) to read 
     as follows: ``the conservator or receiver shall notify any 
     person who is a party to any such contract of such 
     transfer by 5:00 p.m. (eastern time) on the business day 
     following the date of the appointment of the receiver, in 
     the case of a receivership, or the business day following 
     such transfer, in the case of a conservatorship.''.
       (c) Rights Against Receiver and Treatment of Bridge 
     Banks.--Section 11(e)(10) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1821(e)(10)) is further amended--
       (1) by redesignating subparagraph (B) as subparagraph (D); 
     and
       (2) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with an insured depository institution may 
     not exercise any right such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(A) or 
     section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 solely by reason of or 
     incidental to the appointment of a receiver for the 
     depository institution (or the insolvency or financial 
     condition of the depository institution for which the 
     receiver has been appointed)--

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

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

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

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

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

     SEC. 1005. CLARIFYING AMENDMENT RELATING TO MASTER 
                   AGREEMENTS.

       Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as 
     follows:

[[Page H2696]]

       ``(vii) Treatment of master agreement as 1 agreement.--Any 
     master agreement for any contract or agreement described in 
     any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified 
     financial contract only with respect to those transactions 
     that are themselves qualified financial contracts.''.

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

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

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

       ``(a) In General.--Notwithstanding any other provision of 
     law, paragraphs (8), (9), (10), and (11) of section 11(e) of 
     the Federal Deposit Insurance Act shall apply to an 
     uninsured national bank or uninsured Federal branch or 
     Federal agency except--
       ``(1) any reference to the `Corporation as receiver' or 
     `the receiver or the Corporation' shall refer to the receiver 
     of an uninsured national bank or uninsured Federal branch or 
     Federal agency appointed by the Comptroller of the Currency;
       ``(2) any reference to the `Corporation' (other than in 
     section 11(e)(8)(D) of such Act), the `Corporation, whether 
     acting as such or as conservator or receiver', a `receiver', 
     or a `conservator' shall refer to the receiver or conservator 
     of an uninsured national bank or uninsured Federal branch or 
     Federal agency appointed by the Comptroller of the Currency; 
     and
       ``(3) any reference to an `insured depository institution' 
     or `depository institution' shall refer to an uninsured 
     national bank or an uninsured Federal branch or Federal 
     agency.
       ``(b) Liability.--The liability of a receiver or 
     conservator of an uninsured national bank or uninsured 
     Federal branch or agency shall be determined in the same 
     manner and subject to the same limitations that apply to 
     receivers and conservators of insured depository institutions 
     under section 11(e) of the Federal Deposit Insurance Act.
       ``(c) Regulatory Authority.--
       ``(1) In general.--The Comptroller of the Currency, in 
     consultation with the Federal Deposit Insurance Corporation, 
     may promulgate regulations to implement this section.
       ``(2) Specific requirement.--In promulgating regulations to 
     implement this section, the Comptroller of the Currency shall 
     ensure that the regulations generally are consistent with the 
     regulations and policies of the Federal Deposit Insurance 
     Corporation adopted pursuant to the Federal Deposit Insurance 
     Act.
       ``(d) Definitions.--For purposes of this section, the terms 
     `Federal branch', `Federal agency', and `foreign bank' have 
     the same meaning as in section 1(b) of the International 
     Banking Act.''.

     SEC. 1007. BANKRUPTCY CODE AMENDMENTS.

       (a) Definitions of Forward Contract, Repurchase Agreement, 
     Securities Clearing Agency, Swap Agreement, Commodity 
     Contract, and Securities Contract.--Title 11, United States 
     Code, is amended--
       (1) in section 101--
       (A) in paragraph (25)--
       (i) by striking ``means a contract'' and inserting 
     ``means--
       ``(A) a contract'';
       (ii) by striking ``, or any combination thereof or option 
     thereon;'' and inserting ``, or any other similar 
     agreement;''; and
       (iii) by adding at the end the following:
       ``(B) any combination of agreements or transactions 
     referred to in subparagraphs (A) and (C);
       ``(C) any option to enter into an agreement or transaction 
     referred to in subparagraph (A) or (B);
       ``(D) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), or (C), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this paragraph, except that such master agreement shall 
     be considered to be a forward contract under this paragraph 
     only with respect to each agreement or transaction under such 
     master agreement that is referred to in subparagraph (A), (B) 
     or (C); or
       ``(E) a security agreement or arrangement, or other credit 
     enhancement related to any 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) in paragraph (46), by striking ``on any day during the 
     period beginning 90 days before the date of'' and replacing 
     it with ``at any time before'';
       (C) by amending paragraph (47) to read as follows:
       ``(47) `repurchase agreement' (which definition also 
     applies to a reverse repurchase agreement) means--
       ``(i) an agreement, including related terms, which provides 
     for the transfer of 1 or more certificates of deposit, 
     mortgage-related securities (as defined in the Securities 
     Exchange Act of 1934), mortgage loans, interests in mortgage-
     related securities or mortgage loans, eligible bankers' 
     acceptances, qualified foreign government securities; or 
     securities that are direct obligations of, or that are fully 
     guaranteed by, the United States or any agency of the United 
     States against the transfer of funds by the transferee of 
     such certificates of deposit, eligible bankers' acceptances, 
     securities, loans, or interests; with a simultaneous 
     agreement by such transferee to transfer to the transferor 
     thereof certificates of deposit, eligible bankers' 
     acceptance, securities, loans, or interests of the kind 
     described above, at a date certain not later than 1 year 
     after such transfer or on demand, against the transfer of 
     funds;

[[Page H2697]]

       ``(ii) any combination of agreements or transactions 
     referred to in clauses (i) and (iii);
       ``(iii) an option to enter into an agreement or transaction 
     referred to in clause (i) or (ii);
       ``(iv) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), or (iii), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides 
     for an agreement or transaction that is not a repurchase 
     agreement under this paragraph, except that such master 
     agreement shall be considered to be a repurchase agreement 
     under this paragraph only with respect to each agreement 
     or transaction under the master agreement that is referred 
     to in clause (i), (ii), or (iii); or
       ``(v) a security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction 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) does not include a repurchase obligation under a 
     participation in a commercial mortgage loan;
     and, for purposes of this paragraph, the term `qualified 
     foreign government security' means a security that is a 
     direct obligation of, or that is fully guaranteed by, the 
     central government of a member of the Organization for 
     Economic Cooperation and Development;'';
       (D) 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
       (E) by amending paragraph (53B) to read as follows:
       ``(53B) `swap agreement'
       ``(A) means--

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

       ``(I) is presently, 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 1 or more 
     rates, currencies commodities, equity securities, or other 
     equity instruments, debt securities or other debt 
     instruments, or on an economic index or measure of economic 
     risk or value;

       ``(iii) any combination of agreements or transactions 
     referred to in this paragraph;
       ``(iv) any option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(v) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), (iii), or (iv), 
     together with all supplements to any such master agreement, 
     and without regard to whether the master agreement contains 
     an agreement or transaction that is not a swap agreement 
     under this paragraph, except that the master agreement shall 
     be considered to be a swap agreement under this paragraph 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in clause (i), (ii), 
     (iii), or (iv); or
       ``(B) any security agreement or arrangement or other credit 
     enhancement related to any agreements or transactions 
     referred to in subparagraph (A); and
       ``(C) is applicable for purposes of this title only and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     and the regulations prescribed by the Securities and Exchange 
     Commission or the Commodity Futures Trading Commission.'';
       (2) by amending section 741(7) to read as follows:
       ``(7) `securities contract'--
       ``(A) means--
       ``(i) a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit or mortgage loans or interests 
     therein (including an interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security certificate of 
     deposit, loan, interest, group or index or option;
       ``(ii) any option entered into on a national securities 
     exchange relating to foreign currencies;
       ``(iii) the guarantee by or to any securities clearing 
     agency of a settlement of cash, securities, certificates of 
     deposit 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 such security certificate of 
     deposit, loan, interest, group or index or option;
       ``(iv) any margin loan;
       ``(v) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(vi) any combination of the agreements or transactions 
     referred to in this paragraph;
       ``(vii) any option to enter into any agreement or 
     transaction referred to in this paragraph;
       ``(viii) a master 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 any 
     such master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a securities contract under this paragraph, except that 
     such master agreement shall be considered to be a securities 
     contract under this paragraph only with respect to each 
     agreement or transaction under such master agreement that 
     is referred to in clause (i), (ii), (iii), (iv), (v), 
     (vi), or (vii); or
       ``(ix) any security agreement or arrangement, or other 
     credit enhancement, related to any agreement or transaction 
     referred to in this paragraph, but not to exceed the actual 
     value of such contract on the date of the filing of the 
     petition; and
       ``(B) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan.''; and
       (3) in section 761(4)--
       (A) by striking ``or'' at the end of subparagraph (D); and
       (B) by adding at the end the following:
       ``(F) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(G) any combination of the agreements or transactions 
     referred to in this paragraph;
       ``(H) any option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(I) a master 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 the 
     master netting agreement provides for an agreement or 
     transaction that is not a commodity contract under this 
     paragraph, except that the master agreement shall be 
     considered to be a commodity contract under this paragraph 
     only with respect to each agreement or transaction under the 
     master 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 related to any agreement or transaction referred 
     to in this paragraph, but not to exceed the actual value of 
     such contract on the date of the filing of the petition;''.
       (b) Definitions of Financial Institution, Financial 
     Participant, and Forward Contract Merchant.--Section 101 of 
     title 11, United States Code, is amended--
       (1) by amending paragraph (22) to read as follows:
       ``(22) `financial institution' means--
       ``(A) a Federal reserve bank, or an entity (domestic or 
     foreign) that is a commercial or savings bank, industrial 
     savings bank, savings and loan association, trust company, or 
     receiver or conservator for such entity and, when any such 
     Federal reserve bank, receiver, conservator or entity is 
     acting as agent or custodian for a customer in connection 
     with a securities contract, as defined in section 741 of this 
     title, such customer; or
       ``(B) in connection with a securities contract, as defined 
     in section 741 of this title, an investment company 
     registered under the Investment Company Act of 1940;'';
       (2) by inserting after paragraph (22) the following:
       ``(22A) `financial participant' means an entity that, at 
     the time it enters into a securities contract, commodity 
     contract or forward contract, or at the time of the filing of 
     the petition, has 1 or more agreements or transactions that 
     is described in section 561(a)(2) with the debtor or any 
     other entity (other than an affiliate) of a total gross 
     dollar value of at least $1,000,000,000 in notional or actual 
     principal amount outstanding on any day during the previous 
     15-month period, or has gross mark-to-market positions of at 
     least $100,000,000 (aggregated across counterparties) in 1 or 
     more such agreement or transaction with the debtor or any 
     other entity (other than an affiliate) on any day during the 
     previous 15-month period;''; and
       (3) by amending paragraph (26) to read as follows:
       ``(26) `forward contract merchant' means a Federal reserve 
     bank, or an entity whose business consists in whole or in 
     part of entering into forward contracts as or with merchants 
     or in a commodity, as defined or in section 761 of this 
     title, or any similar good, article, service, right, or 
     interest which is presently or in the future becomes the 
     subject of dealing or in the forward contract trade;''.
       (c) Definition of Master Netting Agreement and Master 
     Netting Agreement Participant.--Section 101 of title 11, 
     United States Code, is amended by inserting after paragraph 
     (38) the following new paragraphs:
       ``(38A) `master netting agreement' means an agreement 
     providing for the exercise of rights, including rights of 
     netting, setoff, liquidation, termination, acceleration, or 
     closeout, under or in connection with 1 or more contracts 
     that are described in any 1 or more of paragraphs (1) through 
     (5) of section 561(a), or any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     of the foregoing. If a master netting agreement contains 
     provisions relating to agreements or transactions that are 
     not contracts described in paragraphs (1) through (5) of 
     section 561(a), the master netting agreement shall be deemed 
     to be a master netting agreement only with respect to those 
     agreements or transactions that are described in any 1 or 
     more of the paragraphs (1) through (5) of section 561(a);

[[Page H2698]]

       ``(38B) `master netting agreement participant' means an 
     entity that, at any time before the filing of the petition, 
     is a party to an outstanding master netting agreement with 
     the debtor;''.
       (d) Swap Agreements, Securities Contracts, Commodity 
     Contracts, Forward Contracts, Repurchase Agreements, and 
     Master Netting Agreements Under the Automatic-Stay.--
       (1) In general.--Section 362(b) of title 11, United States 
     Code, as amended by sections 118, 132, 136, 142, 203 and 818, 
     is amended--
       (A) in paragraph (6), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (B) in paragraph (7), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (C) by amending paragraph (17) to read as follows:
       ``(17) under subsection (a), of the setoff by a swap 
     participant of a mutual debt and claim under or in connection 
     with 1 or more swap 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 
     any swap agreement against any payment due to the debtor from 
     the swap participant under or in connection with any 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 margin guarantee, secure, or settle a 
     swap agreement;'';
       (D) in paragraph (30) by striking ``or'' at the end;
       (E) in paragraph (31) by striking the period at the end and 
     inserting ``; or''; and
       (F) by inserting after paragraph (31) the following new 
     paragraph:
       ``(32) 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 sections 120, 302, and 412, 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), or (31) of subsection (b) shall not be 
     stayed by any 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, as 
     amended by sections 207 and 302, is amended--
       (1) in subsection (g) (as added by section 103 of Public 
     Law 101-311)--
       (A) by striking ``under a swap agreement'';
       (B) by striking ``in connection with a swap agreement'' and 
     inserting ``under or in connection with any swap agreement''; 
     and
       (2) by adding at the end the following:
       ``(j) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), 
     and 548(b) of this title, the trustee may not avoid a 
     transfer made by or to a master netting agreement participant 
     under or in connection with any master netting agreement or 
     any individual contract covered thereby that is made before 
     the commencement of the case, except under section 
     548(a)(1)(A) of this title, and except to the extent the 
     trustee could otherwise avoid such a transfer made under an 
     individual contract covered by such master netting 
     agreement.''.
       (f) Fraudulent Transfers of Master Netting Agreements.--
     Section 548(d)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (C), by striking ``and'';
       (2) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) a master netting agreement participant that receives 
     a transfer in connection with a master netting agreement or 
     any individual contract covered thereby takes for value to 
     the extent of such transfer, except, with respect to a 
     transfer under any individual contract covered thereby, to 
     the extent such master netting agreement participant 
     otherwise did not take (or is otherwise not deemed to have 
     taken) such transfer for value.''.
       (g) Termination or Acceleration of Securities Contracts.--
     Section 555 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

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

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

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

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

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

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

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

       (2) in the first sentence, by striking ``termination of a 
     swap agreement'' and inserting ``liquidation, termination, or 
     acceleration of 1 or more swap agreements''; and
       (3) by striking ``in connection with any swap agreement'' 
     and inserting ``in connection with the termination, 
     liquidation, or acceleration of 1 or more swap agreements''.
       (k) Liquidation, Termination, Acceleration, or Offset Under 
     a Master Netting Agreement and Across Contracts.--(1) Title 
     11, United States Code, is amended by inserting after section 
     560 the following:

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

       ``(a) In General.--Subject to subsection (b), the exercise 
     of any contractual right, because of a condition of the kind 
     specified in section 365(e)(1), to cause the termination, 
     liquidation, or acceleration of or to offset or net 
     termination values, payment amounts or other transfer 
     obligations arising under or in connection with 1 or more (or 
     the termination, liquidation, or acceleration of 1 or more)--
       ``(1) securities contracts, as defined in section 741(7);
       ``(2) commodity contracts, as defined in section 761(4);
       ``(3) forward contracts;
       ``(4) repurchase agreements;
       ``(5) swap agreements; or
       ``(6) master netting agreements,

     shall not be stayed, avoided, or otherwise limited by 
     operation of any provision of this title or by any order of a 
     court or administrative agency in any proceeding under this 
     title.
       ``(b) Exception.--
       ``(1) A party may exercise a contractual right described in 
     subsection (a) to terminate, liquidate, or accelerate only to 
     the extent that such party could exercise such a right under 
     section 555, 556, 559, or 560 for each individual contract 
     covered by the master netting agreement in issue.
       ``(2) If a debtor is a commodity broker subject to 
     subchapter IV of chapter 7 of this title--
       ``(A) a party may not net or offset an obligation to the 
     debtor arising under, or in connection with, a commodity 
     contract against any claim arising under, or in connection 
     with, other instruments, contracts, or agreements listed in 
     subsection (a) except to the extent the party has 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 listed in subsection (a).
       ``(c) Definition.--As used in this section, the term 
     `contractual right' includes a right set forth in a rule or 
     bylaw of a national securities exchange, a national 
     securities association, or a securities clearing agency, a 
     right set forth in a bylaw of a clearing organization or 
     contract market or in a resolution of the governing board 
     thereof, and a right, whether or not evidenced in writing, 
     arising under common law, under law merchant, or by reason of 
     normal business practice.''.
       (2) Conforming amendment.--The table of sections of chapter 
     9 of title 11, United States Code, is amended by inserting 
     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.
       (l) Ancillary Proceedings.--Section 304 of title 11, United 
     States Code, as amended by section 215, is amended by adding 
     at the end the following:
       ``(c) Any provisions of this title relating to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, or master netting agreements 
     shall apply in a case ancillary to a foreign proceeding under 
     this section or any other section of this title, so that 
     enforcement of contractual provisions of such contracts and 
     agreements in accordance with their terms will not be stayed 
     or otherwise limited by operation of any provision of this 
     title or by order of a court in any case under this title, 
     and to limit avoidance powers to the same extent as in a 
     proceeding under chapter 7 or 11 of this title (such 
     enforcement not to be limited based on the presence or 
     absence of assets of the debtor in the United States).''.
       (m) Commodity Broker Liquidations.--Title 11, United States 
     Code, is amended by inserting after section 766 the 
     following:

[[Page H2699]]

     ``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, 560 or 561 of this 
     title)'' before the period; and
       (2) in subsection (b)(1), by striking ``362(b)(14),'' and 
     inserting ``362(b)(17), 362(b)(19), 555, 556, 559, 560, 
     561''.
       (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 at the end ``, 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 of chapter 5--
       (A) by amending the items relating to sections 555 and 556 
     to read as follows:

``555. Contractual right to liquidate, terminate, or accelerate a 
              securities contract.
``556. Contractual right to liquidate, terminate, or accelerate a 
              commodities contract or forward contract.''; and
       (B) by amending the items relating to sections 559 and 560 
     to read as follows:

``559. Contractual right to liquidate, terminate, or accelerate a 
              repurchase agreement.
``560. Contractual right to liquidate, terminate, or accelerate a swap 
              agreement.''; and
       (2) in the table of sections of chapter 7--
       (A) by inserting after the item relating to section 766 the 
     following:

``767. Commodity broker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              securities clearing agencies, swap participants, repo 
              participants, and master netting agreement 
              participants.''; and
       (B) by inserting after the item relating to section 752 the 
     following:

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

     SEC. 1008. RECORDKEEPING REQUIREMENTS.

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

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

       Section 13(e)(2) of the Federal Deposit Insurance Act (12 
     U.S.C. 1823(e)(2)) is amended to read as follows:
       ``(2) Exemptions from contemporaneous execution 
     requirement.--An agreement to provide for the lawful 
     collateralization of--
       ``(A) deposits of, or other credit extension by, a Federal, 
     State, or local governmental entity, or of any depositor 
     referred to in section 11(a)(2), including an agreement to 
     provide collateral in lieu of a surety bond;
       ``(B) bankruptcy estate funds pursuant to section 345(b)(2) 
     of title 11, United States Code;
       ``(C) extensions of credit, including any overdraft, from a 
     Federal reserve bank or Federal home loan bank; or
       ``(D) 1 or more qualified financial contracts, as defined 
     in section 11(e)(8)(D),
     shall not be deemed invalid pursuant to paragraph (1)(B) 
     solely because such agreement was not executed 
     contemporaneously with the acquisition of the collateral or 
     because of pledges, delivery, or substitution of the 
     collateral made in accordance with such agreement.''.

     SEC. 1010. DAMAGE MEASURE.

       (a) Title 11, United States Code, as amended by section 
     1007, is amended--
       (1) by inserting after section 561 the following:

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

       ``If the trustee rejects a swap agreement, securities 
     contract as defined in section 741 of this title, forward 
     contract, commodity contract (as defined in section 761 of 
     this title) repurchase agreement, or master netting agreement 
     pursuant to section 365(a) of this title, or if a forward 
     contract merchant, stockbroker, financial institution, 
     securities clearing agency, repo participant, financial 
     participant, master netting agreement participant, or swap 
     participant liquidates, terminates, or accelerates such 
     contract or agreement, damages shall be measured as of the 
     earlier of--
       ``(1) the date of such rejection; or
       ``(2) the date of such liquidation, termination, or 
     acceleration.''; and
       (2) in the table of sections of chapter 5 by inserting 
     after the item relating to section 561 the following:

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

     SEC. 1011. SIPC STAY.

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

     SEC. 1012. ASSET-BACKED SECURITIZATIONS.

       Section 541 of title 11, United States Code, as amended by 
     section 150, is amended--
       (1) by redesignating paragraph (5) of subsection (b) as 
     paragraph (6);
       (2) by inserting after paragraph (4) of subsection (b) the 
     following new paragraph:
       ``(5) any eligible asset (or proceeds thereof), to the 
     extent that such eligible asset was transferred by the 
     debtor, before the date of commencement of the case, to an 
     eligible entity in connection with an asset-backed 
     securitization, except to the extent such asset (or proceeds 
     or value thereof) may be recovered by the trustee under 
     section 550 by virtue of avoidance under section 548(a);''; 
     and
       (3) 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

[[Page H2700]]

     mortgage loans, consumer receivables, trade receivables, and 
     lease receivables, that, by their terms, convert into cash 
     within a finite time period, plus any residual interest in 
     property subject to receivables included in such financial 
     assets 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; and
       ``(5) the term `transferred' means the debtor, pursuant to 
     a written agreement, represented and warranted that eligible 
     assets were sold, contributed, or otherwise conveyed with the 
     intention of removing them from the estate of the debtor 
     pursuant to subsection (b)(5), irrespective, without 
     limitation of--
       ``(A) whether the debtor directly or indirectly obtained or 
     held an interest in the issuer or in any securities issued by 
     the issuer;
       ``(B) whether the debtor had an obligation to repurchase or 
     to service or supervise the servicing of all or any portion 
     of such eligible assets; or
       ``(C) the characterization of such sale, contribution, or 
     other conveyance for tax, accounting, regulatory reporting, 
     or other purposes.''.

     SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIREMENTS.

       The 3d sentence of the 3d undesignated paragraph of section 
     16 of the Federal Reserve Act (12 U.S.C. 412) is amended by 
     striking ``acceptances acquired under the provisions of 
     section 13 of this Act'' and inserting ``acceptances 
     acquired under section 10A, 10B, 13, or 13A of this Act''.

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

       (a) Effective Date.--This title shall take effect on the 
     date of the 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 XI--TECHNICAL CORRECTIONS

     SEC. 1101. DEFINITIONS.

       Section 101 of title 11, United States Code, as amended by 
     sections 102, 105, 132, 138, 301, 302, 402, 902, and 1007, is 
     amended--
       (1) by striking ``In this title--'' and inserting ``In this 
     title:'';
       (2) in each paragraph, by inserting ``The term'' after the 
     paragraph designation;
       (3) in paragraph (35)(B), by striking ``paragraphs (21B) 
     and (33)(A)'' and inserting ``paragraphs (23) and (35)'';
       (4) in each of paragraphs (35A) and (38), by striking ``; 
     and'' at the end and inserting a period;
       (5) in paragraph (51B)--
       (A) by inserting ``who is not a family farmer'' after 
     ``debtor'' the first place it appears; and
       (B) by striking ``thereto having aggregate'' and all that 
     follows through the end of the paragraph;
       (6) by amending paragraph (54) to read as follows:
       ``(54) The term `transfer' means--
       ``(A) the creation of a lien;
       ``(B) the retention of title as a security interest;
       ``(C) the foreclosure of a debtor's equity of redemption; 
     or
       ``(D) each mode, direct or indirect, absolute or 
     conditional, voluntary or involuntary, of disposing of or 
     parting with--
       ``(i) property; or
       ``(ii) an interest in property;'';
       (7) in each of paragraphs (1) through (35), in each of 
     paragraphs (36) and (37), and in each of paragraphs (40) 
     through (55) (including paragraph (54), as amended by 
     paragraph (6) of this section), by striking the semicolon at 
     the end and inserting a period; and
       (8) by redesignating paragraphs (4) through (55), including 
     paragraph (54), as amended by paragraph (6) of this section, 
     in entirely numerical sequence.

     SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.

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

     SEC. 1103. EXTENSION OF TIME.

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

     SEC. 1104. TECHNICAL AMENDMENTS.

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

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

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

     SEC. 1106. LIMITATION ON COMPENSATION OF PROFESSIONAL 
                   PERSONS.

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

     SEC. 1107. SPECIAL TAX PROVISIONS.

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

     SEC. 1108. EFFECT OF CONVERSION.

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

     SEC. 1109. 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. 1110. PRIORITIES.

       Section 507(a) of title 11, United States Code, as amended 
     by section 323, is amended in paragraph (4), as so 
     redesignated by section 142, by striking the semicolon at the 
     end and inserting a period.

     SEC. 1111. EXEMPTIONS.

       Section 522(g)(2) of title 11, United States Code, is 
     amended by striking ``subsection (f)(2)'' and inserting 
     ``subsection (f)(1)(B)''.

     SEC. 1112. EXCEPTIONS TO DISCHARGE.

       Section 523 of title 11, United States Code, as amended by 
     section 146, is amended--
       (1) in subsection (a)(3), by striking ``or (6)'' each place 
     it appears and inserting ``(6), or (15)'';
       (2) as amended by section 304(e) of Public Law 103-394 (108 
     Stat. 4133), in paragraph (15), by transferring such 
     paragraph so as to insert it after paragraph (14A) of 
     subsection (a);
       (3) in subsection (a)(9), by inserting ``, watercraft, or 
     aircraft'' after ``motor vehicle'';
       (4) in subsection (a)(15), as so redesignated by paragraph 
     (2) of this subsection, by inserting ``to a spouse, former 
     spouse, or child of the debtor and'' after ``(15)''; and
       (5) in subsection (e), by striking ``a insured'' and 
     inserting ``an insured''.

     SEC. 1113. EFFECT OF DISCHARGE.

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

     SEC. 1114. 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. 1115. 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. 1116. 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 transfer 
     made 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 transfer may 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 is pending or commenced on or 
     after the date of enactment of this Act.

     SEC. 1117. 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. 1118. DISPOSITION OF PROPERTY OF THE ESTATE.

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

     SEC. 1119. GENERAL PROVISIONS.

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

     SEC. 1120. APPOINTMENT OF ELECTED TRUSTEE.

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

     SEC. 1121. 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. 1122. 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. 1123. 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)''.

[[Page H2701]]

     SEC. 1124. 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. 1125. 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. 1126. TRANSFERS MADE BY NONPROFIT CHARITABLE 
                   CORPORATIONS.

       (a) Sale of Property of Estate.--Section 363(d) of title 
     11, United States Code, is amended--
       (1) by striking ``only'' and all that follows through the 
     end of the subsection and inserting ``only--
       ``(1) in accordance with applicable nonbankruptcy law that 
     governs the transfer of property by a corporation or trust 
     that is not a moneyed, business, or commercial corporation or 
     trust; and
       ``(2) to the extent not inconsistent with any relief 
     granted under subsection (c), (d), (e), or (f) of section 362 
     of this title.''.
       (b) Confirmation of Plan for Reorganization.--Section 
     1129(a) of title 11, United States Code, as amended by 
     section 140, 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, as amended by section 1102, 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 
     deemed to require the court in which a case under chapter 11 
     is pending to remand or refer any proceeding, issue, or 
     controversy to any other court or to require the approval of 
     any other court for the transfer of property.

     SEC. 1127. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO 
                   INCUR FINANCE CHARGES.

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

     SEC. 1128. 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. 1129. TRUSTEES.

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

     SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as provided otherwise in this 
     Act, this Act and the amendments made by this Act shall take 
     effect 180 days after the date of the enactment of this Act.
       (b) Application of Amendments.--Except as otherwise 
     provided in this Act, the amendments made by this Act shall 
     not apply with respect to cases commenced under title 11 of 
     the United States Code before the effective date of this Act.

  The CHAIRMAN pro tempore. No amendment shall be in order except those 
printed in House Report 106-126. Each amendment may be. Each amendment 
may be offered only in the order specified, may be offered only by a 
Member designated in the report, shall be considered as read, debatable 
for the time specified in the report, equally divided and controlled by 
the proponent and an opponent, shall not be subject to amendment, and 
shall not be subject to a demand for a division of the question.
  The Chairman of the Committee of the Whole may postpone a request for 
a recorded vote on any amendment and may reduce to a minimum of 5 
minutes the time for voting on any postponed question that immediately 
follows another vote, provided that the time for voting on the first 
question shall be a minimum of 15 minutes.
  It is now in order to consider Amendment No. 1 printed in House 
Report 106-126.


                  Amendment No. 1 Offered by Mr. Gekas

  Mr. GEKAS. Mr. Chairman, I offer amendment No. 1.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Gekas:
       In the table of contents of the bill--
       (1) in the item relating to section 107, strike 
     ``congress'' and insert ``Congress'', and
       (2) in the item relating to section 134, strike ``Giving 
     debtors the ability to keep'' and insert ``Allowing a debtor 
     to retain''.
       Page 9, line 1, strike ``applicable'' and insert 
     ``actual''.
       Page 9, beginning on line 1, strike ``specifically listed'' 
     and insert ``specified''.
       Page 10, line 3, strike ``proceeding brought'' and insert 
     ``motion filed''.
       Beginning on page 10, strike line 22 and all that follows 
     through line 5 on page 11.
       Page 11, line 6, strike ``(D)'' and insert ``(C)''.
       Page 12, beginning on line 11, strike ``in prosecuting the 
     motion''.
       Page 16, line 13, insert ``or not'' after ``whether''.
       Page 17, after line 16, insert the following (and make such 
     technical and conforming changes as may be appropriate):
       (d) Debtor's Duties.--Section 521(a)(1)(B) of title 11, 
     United States Code, as amended by section 603, is amended--
       (1) in clause (v) by striking ``and'' at the end;
       (2) in clause (vi) by adding ``and'' at the end;
       (3) by inserting the following after clause (vi):
       ``(vii) a statement of the debtor's current monthly income, 
     and the calculations which determine whether a presumption 
     arises under section 707(b)(2)(A)(i), showing how each amount 
     is calculated.''.
       (e) Bankruptcy Forms.--Section 2075 of title 28, United 
     States Code, is amended by adding the following at the end of 
     the 1st paragraph:

     ``The bankruptcy rules promulgated under this section shall 
     prescribe a form for the statement referred to in section 
     521(a)(1)(B)(vii) of title 11, United States Code, and may 
     provide general rules on the content of such statement.''.
       (f) Chapter 13.--Section 1325(a) 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 and inserting 
     ``; and'';
       (3) by inserting the following after paragraph (6):
       ``(7) the action of the debtor in filing the petition under 
     this chapter was in good faith.''.
       Page 19, line 15, strike ``this title'' and insert ``title 
     11, United States Code''.

[[Page H2702]]

       Page 22, lines 17 and 20, insert ``case or'' after ``a''.
       Page 23, lines 9 and 12, strike ``proceeding'' and insert 
     ``case''.
       Page 77, strike line 1, and insert the following:

     SEC. 134. ALLOWING THE DEBTOR TO RETAIN LEASED

       Beginning on page 114, strike line 1 and all that follows 
     through line 5 on page 115 (and make such technical and 
     conforming changes as may be appropriate).
       Page 91, line 15, insert ``(a) Amend-
     ment.--'' before ``Section''.
       Page 92, beginning on line 13, strike ``expressly'' and all 
     that follows through ``this paragraph'', and insert 
     ``provides by statute''.
       Page 92, after line 15, insert the following:
       (b) Application of Amendment to Individual States.--(1) 
     Section 522(p) of title 11, United States Code, as added by 
     subsection (a), shall not apply with respect to a State 
     before the end of the first regular session of the State 
     legislature following the date of the enactment of this Act.
       (2) For purposes of paragraph (1), the term ``State'' has 
     the meaning given such term in section 101 of title 11, 
     United States Code.
       Page 115, beginning on line 20, strike ``(excluding'' and 
     all that follows through ``secret)''.
       Page 116, line 7, insert ``(excluding executory contracts 
     that transfer a right or interest under a filed or issued 
     patent, copyright, trademark, trade dress, or trade secret)'' 
     after ``contract''.
       Page 117, line 15, strike ``365(b)(1)(A)'' and insert 
     ``365(b)(2)''.
       Page 174, line 2, insert ``(a) Appeals.--'' before 
     ``Title''.
       Page 175, line 9, strike ``(b)'' and insert ``(5)''.
       Page 175, indent lines 9 through 11 2 ems to the right.
       Page 175, line 12, strike ``(c)(1)'' and insert ``(b)(1)''.
       Page 175, line 17, strike ``(1)-(4)'' and insert ``(1) 
     through (5)''.
       Page 175, line 24, strike ``subsection (b)'' and insert 
     ``paragraph (1)''
       Page 176, after line 6, insert the following:
       (b) Procedural Rules.--Until rules of practice and 
     procedure are promulgated or amended pursuant to the Rules 
     Enabling Act (28 U.S.C. sections 2071-77) to govern appeals 
     to a bankruptcy appellate panel or to a court of appeals 
     exercising jurisdiction pursuant to section 1293 of title 28, 
     as added by this Act, the following shall apply:
       (1) A notice of appeal with respect to an appeal from an 
     order or judgment of a bankruptcy court to a court of appeals 
     or a bankruptcy appellate panel must be filed within the time 
     provided in Rule 8002 of the Federal Rules of Bankruptcy 
     Procedure.
       (2) An appeal to a bankruptcy appellate panel shall be 
     taken in the manner provided in Part VIII of the Federal 
     Rules of Bankruptcy Procedure and local court rules.
       (3) An appeal from an order or judgment of a bankruptcy 
     court directly to a court of appeals shall be governed by the 
     rules of practice and procedure that apply to a civil appeal 
     from a judgment of a district court exercising original 
     jurisdiction, as if the bankruptcy court were a district 
     court, except as provided in paragraph (1) regarding the time 
     to appeal or by local court rules.
       (4) An appeal to a court of appeals from a decision, 
     judgment, order, or decree entered by a bankruptcy appellate 
     panel exercising appellate jurisdiction shall be taken in the 
     manner provided by Rule 6(b) of the Federal Rules of 
     Appellate Procedure.
       (c) Repealer.--(1) Section 158 of title 28, United States 
     Code, is repealed.
       (2) The table of sections of chapter 6 of title 28, United 
     States Code, is amended by striking the item relating to 
     section 158.
       Page 208, line 9, insert ``, other than a foreign insurance 
     company,'' after ``entity''.
       Page 208, after line 20, insert the following:
       ``(d) The court may not grant relief under this chapter 
     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.
       Page 231, strike line 13, and insert the following:

     ``SEC. 902. OTHER AMENDMENTS TO TITLES 11 AND 28 OF THE 
                   UNITED STATES CODE.

       Page 233, after line 11, insert the following (and make 
     such technical and conforming changes as may be appropriate):
       (d) Other Sections of Title 11.--(1) Section 109(b)(3) of 
     title 11, United States Code, is amended to read as follows:
       ``(3)(A) a foreign insurance company, engaged in such 
     business in the United States; or
       ``(B) a foreign bank, savings bank, cooperative bank, 
     savings and loan association, building and loan association, 
     or credit union, which has a branch or agency (as defined in 
     section 3101 of title 12, United States Code) in the United 
     States.''.
       (2) Section 303(k) of title 11, United States Code, is 
     repealed.
       (3)(A) Section 304 of title 11, United States Code, is 
     repealed.
       (B) The table of sections of chapter 3 of title 11, United 
     States Code, is amended by striking the item relating to 
     section 304.
       (C) Section 306 of title 11, United States Code, is amended 
     by striking ``, 304,'' each place it appears.
       Page 279, beginning on line 1, strike ``that is described 
     in section 561(a)(2)'' and insert ``described in paragraph 
     (1), (2), (3), (4), or (5) of section 561(a)''.

  The CHAIRMAN pro tempore. Pursuant to House Resolution 158, the 
gentleman from Pennsylvania (Mr. Gekas) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Gekas).
  Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.

                              {time}  1345

  In this amendment, which is the manager's amendment, of course, the 
bulk of it is with technical corrections that have to be made, that 
almost always appear in a bill that is so mammoth as is ours. But 
besides that, there are some other revisions in it of which the 
minority is well aware.
  For instance, in the homestead exemption portion, we allow the States 
who want to opt out to do so, even in advance of the adoption of the 
bill, because of the legislative schedules in some of those States.
  So the technical corrections bill corrects some of the technical 
misgivings that we have had about the original text.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise in support of the amendment. This is a technical 
amendment, the manager's amendment. It contains 11 changes. We have 
examined them carefully and have absolutely no objection to them.
  Mr. BENTSEN. Mr. Chairman, I rise today in strong support of the 
manager's amendment to H.R. 833, bankruptcy reform legislation.
  I believe that adoption of this amendment is necessary to preserve 
state homestead laws. I am pleased that the manager's amendment 
includes two critically important amendments that I offered yesterday 
in the House Rules Committee. The adoption of the manager's amendment 
would ensure that states can decide how much property should be 
exempted when a consumer files for bankruptcy. This will grant the 
states latitude to opt out of this intrusive law protecting their 
prerogative in determining what homestead exemptions are allowed. 
State's citizens will not be forced to live under this new federal 
mandate until such time as a state legislature reconvened.
  The first Bentsen amendment would change the effective date of the 
new federal homestead cap of $250,000 until the last day of the next 
legislative session of any state. The second Bentsen amendment would 
preserve the right of states to opt out of the cap and allow states to 
prospectively opt out of the new homestead cap prior to this bill being 
enacted into law. This would allow the legislatures ample time to pass 
legislation opting out of this new federal standard.
  The bill as reported by the House Judiciary Committee, includes many 
provisions related to the homestead exemption. First, it would place a 
monetary cap of $250,000 on the amount of homestead equity individuals 
can protect from bankruptcy foreclosure proceedings. If a consumer 
holds more than $250,000 in equity, the consumer would be required to 
foreclose on the property to repay their non-mortgage debts. Second, it 
includes a two-year residency requirement before one can qualify. 
Third, this legislation includes a provision that would prohibit them 
from transferring assets in their home during this two-year period. 
This provision could penalize any homeowner or farmer who tried to pay 
more than what's required on their mortgage payments. Finally, this 
legislation also would permit states to ``opt out'' of this new federal 
standard.
  My amendment would address the ``opt out'' provision by ensuring that 
states are not required to choose between convening a special 
legislative session or forcing their citizens to live under this 
intrusive federal mandate.
  There is no substantive reason to address state homestead laws in 
this or any other legislation. No evidence of abusive practices has 
been provided during the debate. When the 105th Congress considered 
this legislation we successfully prevailed against such a cap. And, 
while I support much of the underlying bill, I will be unable to 
support any conference report which includes any restriction on the 
states' ability to determine exempt property with respect to one's 
homestead including eliminating and limiting the states' ability to opt 
out of the new federal standard.
  While this legislation is not perfect, I believe that the manager's 
amendment makes important improvements to this legislation. With these 
additions, I believe we should support the manager's amendment and 
would urge colleagues to also support this amendment.
  The CHAIRMAN pro tempore (Mr. LaHood). The question is on the 
amendment offered by the gentleman from Pennsylvania (Mr. Gekas).
  The amendment was agreed to.
  The CHAIRMAN pro tempore. It is now in order to consider amendment 
number 2 printed in House Report 106-126.

[[Page H2703]]

            Amendment No. 2 Offered by Mr. Moran of Virginia

  Mr. MORAN of Virginia. Mr. Chairman, I offer an amendment made in 
order by the rule.
  The CHAIRMAN pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Moran of Virginia:
       Page 34, strike lines 7 through 25 and insert the 
     following:
       ``(C) the following examples:
       ``(i) if the average account balance under a creditor's 
     open-end consumer credit plan, taken as an average of the 
     account balances for all consumer accounts under that open-
     end consumer credit plan, is $1,000 or less, two examples, 
     based on an annual percentage rate and method for determining 
     minimum periodic payments recently in effect for that 
     creditor, and based on outstanding balances of $250 and $500, 
     showing the estimated minimum periodic payments, and the 
     estimated period of time it would take to repay those 
     outstanding balances of $250 and $500, if the consumer paid 
     only the minimum periodic payment on each monthly or periodic 
     statement and obtained no additional extensions of credit; or
       ``(ii) if the average account balance under a creditor's 
     open-end consumer credit plan, taken as an average of the 
     account balances for all consumer accounts under that open-
     end consumer credit plan, is more than $1,000, three 
     examples, based on an annual percentage rate and method for 
     determining minimum periodic payments recently in effect for 
     that creditor, and outstanding balances of $1,000, $1,500 and 
     $2,000, showing the estimated minimum periodic payments, and 
     the estimated period of time it would take to repay those 
     outstanding balances of $1,000, $1,500 and $2,000 if the 
     consumer paid only the minimum periodic payment on each 
     monthly or periodic statement and obtained no additional 
     extensions of credit.
       ``(10) With respect to one billing cycle per calendar year, 
     the creditor shall transmit to each consumer to whom the 
     creditor is required to transmit a statement pursuant to 
     subsection (b) for such billing cycle the following 
     information:
       ``(A) the following statement: `The minimum payment amount 
     shown on your billing statement is the smallest payment which 
     you can make in order to keep the account in good standing. 
     This payment option is offered as a convenience and you may 
     make larger payments at any time. Making only the minimum 
     payment each month will increase the amount of interest you 
     pay and the length of time it takes to repay your outstanding 
     balance.';
       ``(B) if the plan provides that the consumer will be 
     permitted to forgo making a minimum payment during a 
     specified billing cycle, a statement, if applicable, that if 
     the consumer chooses to forgo making the minimum payment, 
     finance charges will continue to accrue;
       ``(C) an example, based on an annual percentage rate and 
     method for determining minimum periodic payments recently in 
     effect for that creditor, and a $500 outstanding balance, 
     showing the estimated minimum periodic payment, and the 
     estimated period of time it would take to repay the $500 
     outstanding balance if the consumer paid only the minimum 
     periodic payment on each monthly or periodic statement and 
     obtained no additional extensions of credit; and
       ``(D) a worksheet prescribed by the Board to assist the 
     consumer in determining the consumer's household income and 
     debt obligations.''.
       Page 35, line 12, strike the close quotation marks and the 
     period at the end.
       Page 35, after line 12 insert the following:
       ``(12) the required minimum payment amount represented as a 
     dollar figure.
       ``(13) the date by which or the period within which the 
     required minimum payment must be made.''.
       (c) Disclosures Related to Introductory Rates.--Section 
     127(c)(1)(A)(i) of the Truth in Lending Act (15 U.S.C. 
     1637(c)(1)(A)(i)) is amended by inserting the following at 
     the end of subclause (III):
       ``(IV) Where the initial rate is temporary and will expire 
     within a period of less than 1 year, and is lower than the 
     rate that will apply after the temporary rate expires--

       ``(A) the time period during which the initial rate will 
     remain in effect; and
       ``(B) the annual percentage rate that will apply to the 
     account after the temporary rate expires, or if that rate is 
     a variable rate, the fact that the rate is variable, the rate 
     at the time of mailing, and how the rate is determined.

       ``(V)(A) Subject to subclauses (C) and (D), where the 
     initial rate may increase upon the occurrence of one or more 
     specific events, the following information:

       ``(i) the initial rate and the increased rate that may 
     apply;
       ``(ii) if the increased rate is a variable rate, the fact 
     that the increased rate is variable, the rate at the time of 
     mailing, and how the rate is determined; and
       ``(iii) the specific event or events that may result in 
     imposing the increased rate.

       ``(B) At the creditor's option, the creditor may disclose 
     the period for which the increased rate will remain in 
     effect.
       ``(C) If the increased rate cannot be determined at the 
     time disclosures are given, an explanation of the specific 
     event or events that may result in an increased rate must be 
     disclosed.
       ``(D) A creditor is not required to disclose an increased 
     rate that is imposed when credit privileges are permanently 
     terminated.''.
       (d) Internet-Based Credit Card Solicitations.--(1)--Section 
     127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is 
     amended by inserting after paragraph (5) the following:
       ``(6)(A) Any application to open a credit card account for 
     any person under an open-end consumer credit plan, and any 
     solicitation to open such an account without requiring an 
     application, that is made available through the Internet or 
     an interactive computer service, shall disclose the 
     following:
       ``(i) the information.--
       ``(I) described in paragraph (1)(A) in the form required 
     under section 122(c) of this chapter, subject to subsection 
     (e), and
       ``(II) described in paragraph (1)(B) in a clear and 
     conspicuous form, subject to subsections (e) and (f);
       ``(ii) a statement, in a conspicuous and prominent location 
     on or with the application or solicitation, that--
       ``(I) the information is accurate as of the date the 
     application or solicitation was posted;
       ``(II) the information contained in the application or 
     solicitation is subject to change after such date;
       ``(III) the applicant should contact the creditor for 
     information on any change in the information presented on or 
     with the application or solicitation since it was posted;
       ``(iii) a clear and conspicuous disclosure of the date the 
     application or solicitation was posted and how frequently the 
     information described in subclause (i) is updated; and
       ``(iv) a disclosure, in a conspicuous and prominent 
     location on or with the application or solicitation, of a 
     toll-free telephone number or e-mail address at which the 
     applicant may contact the creditor to obtain any change in 
     the information provided on or with the application or 
     solicitation since it was posted.
       ``(B) The disclosures required under subparagraph (A) may 
     be contained either:
       ``(i) on the webpage which contains the application or 
     solicitation; or
       ``(ii) on a separate webpage which can be directly accessed 
     using a hypertext link which is contained on the webpage 
     which contains the application or solicitation.
       ``(C) Upon receipt of a request for any of the information 
     referred to in subparagraph (A), the creditor or its agent 
     shall promptly disclose any change in the information 
     required to be disclosed under subparagraph (A).
       ``(D) For purposes of this paragraph (6)--
       ``(i) the term `Internet' means the international computer 
     network of both Federal and non-Federal interoperable packets 
     switched data networks; and
       ``(ii) the term `interactive computer service' means any 
     information service system, or access software provider that 
     provides or enables computer access by multiple users to a 
     computer server, including specifically a service or system 
     that provides access to the Internet and such systems 
     operated or services offered by libraries or educational 
     institutions.''.
       (2) Section 122(c)(1) of the Truth in Lending Act (15 
     U.S.C. 1632(c)(1)) is amended by striking ``and 
     (4)(C)(i)(I)'' and inserting ``, (4)(C)(i)(I) and 
     (6)(A)(i)(I)''.

  The CHAIRMAN pro tempore. Pursuant to House Resolution 158, the 
gentleman from Virginia (Mr. Moran) and a Member opposed each will 
control 10 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, this bill, as reported by the Committee on the 
Judiciary, already does require credit card issuers to tell consumers 
on every monthly billing statement that making only the minimum payment 
each month will increase the amount of interest paid and the length of 
time it takes to repay the balance on the account.
  Our amendment, which is cosponsored by the gentleman from California 
(Mr. Dooley) and the gentleman from New York (Mr. Ackerman), adds four 
components to the existing consumer protection provisions of H.R. 833. 
These components have been crafted to respond to specific concerns that 
have been expressed about whether consumers have adequate information 
about certain features of their credit card accounts.
  First of all, in terms of minimum payments, it enhances the minimum 
payment disclosure requirements already contained in this bill. Under 
our amendment credit card issuers would be required to disclose, when 
the consumer first opens an account, several examples of how long it 
would take to repay a balance if the consumer makes only minimum 
payments. The number and type of examples would be tailored to the size 
of the card issuer's typical account balance.
  Secondly, disclosure of late payment penalties and deadlines: Our 
amendment responds to concerns that have

[[Page H2704]]

been raised about whether consumers have the information they need in 
order to avoid the imposition of late fees and penalties. Credit card 
issuers would have to disclose on each monthly statement the amount of 
the minimum payment expressed as a dollar amount and the date by which 
it must be paid. Believe it or not, these requirements are not 
currently in the Federal code.
  The amendment would require applications or solicitations for a 
credit card to include a clear and conspicuous disclosure of any so-
called penalty rate that may apply if the consumer does not pay as 
agreed. Such penalty rates are higher than the regular interest rate, 
and this amendment would ensure that consumers were adequately informed 
in advance about the circumstances under which they would apply.
  Thirdly, worldwide web-based credit card solicitations: We modify the 
Truth in Lending Act to establish for the first time disclosure 
requirements that specifically apply to credit card applications or 
solicitations that are posted on the worldwide web. The amendment would 
require these solicitations to post the same disclosures, usually 
presented in a table, that currently apply to every other credit card 
offer made through the traditional mail system.
  The amendment would require that the web site include the date the 
disclosures were posted and a statement that they were accurate as of 
that date. It would also require a statement that the information 
disclosed on the web site may change, and a toll free telephone number 
or e-mail address would have to be provided so the consumer could 
obtain the most current information.
  Lastly, related to teaser rates, our amendment would ensure that 
consumers receive the information they need in order to make informed 
decisions regarding credit card introductory rates, sometimes called 
teaser rates. Specifically, the amendment would amend the Truth in 
Lending Act to require that an application or solicitation for a credit 
card that has an introductory rate must include a clear and conspicuous 
disclosure of when the introductory rate will expire, as well as the 
rate that will apply after the introductory rate will expire, after the 
introductory period.
  This is the kind of information that consumers desperately need. The 
fact that those disclosures are not required by statute points up a 
glaring error, and we think that this significantly improves the bill. 
It gives balance to this bill by adding these consumer protections, but 
does not inappropriately load up the lending industry with onerous and 
expensive new requirements that have nothing to do with the underlying 
purpose of the bill, which is to provide long overdue reform to the 
bankruptcy bill.
  So I think these are appropriate, if I do say so myself, Mr. 
Chairman, and we would hope that this body would approve them 
unanimously.
  Mr. GEKAS. Mr. Chairman, will the gentleman yield?
  Mr. MORAN of Virginia. I yield to the gentleman from Pennsylvania.
  Mr. GEKAS. Mr. Chairman, I want to commend the gentleman for offering 
the amendment, and to indicate to all parties that we on this side 
agree to the amendment.
  Mr. MORAN of Virginia. Mr. Chairman, I yield back the balance of my 
time, and thank the gentleman for his comments.
  The CHAIRMAN pro tempore. Is there any Member in opposition to the 
amendment?
  Mr. CONYERS. Mr. Chairman, I rise in opposition to the amendment.
  The CHAIRMAN pro tempore. The gentleman from Michigan (Mr. Conyers) 
is recognized for 10 minutes.
  Mr. CONYERS. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from North Carolina (Mr. Watt).
  Mr. WATT of North Carolina. Mr. Chairman, I am not rising in 
opposition to the amendment, I am rising to express my disappointment 
that the Committee on Rules failed to make an even better amendment in 
order.
  This amendment certainly improves the bill from its current position, 
and I intend to vote for it, but it still is nowhere as good as the 
amendment should have been. Because instead of providing borrowers the 
kind of information they need to really evaluate how much money they 
will make in payments on their credit cards, we continue to provide 
hypothetical information to them under this amendment.
  It would not have been any more costly or any more burdensome to 
lenders to provide actual information about the amount of time it takes 
to pay off a loan if one pays the minimum amount. And, unfortunately, 
we had an amendment that would have done that, but the Committee on 
Rules did not see fit to make it in order.
  So I will support this amendment because it is better than what is in 
the bill, but it is still not anywhere close to being as good as it 
could be and should be for the consumers of America.
  Mr. CONYERS. Mr. Chairman, I yield 30 seconds to the gentleman from 
Texas (Mr. Bentsen).
  (Mr. BENTSEN asked and was given permission to revise and extend his 
remarks.)
  Mr. BENTSEN. Mr. Chairman, I thank the gentleman for yielding me this 
time, and I just wanted to spend a second to speak on the amendment 
that was just adopted, the manager's amendment, to say that I strongly 
support it; that it includes two important provisions which would 
correct the opt-out language related to the equity cap for State 
homestead laws.
  Without these opt-outs, I think citizens in my State of Texas and 
several other States would be unfairly affected by the homestead 
provisions in this bill, which I believe are unfair and unnecessary.
  Mr. CONYERS. Mr. Chairman, I yield such time as he may consume to the 
gentleman from New York (Mr. Ackerman).
  (Mr. ACKERMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. ACKERMAN. Mr. Chairman, I rise in support of this amendment, of 
which I am a cosponsor, and ask for its approval.
  Mr. CONYERS. Mr. Chairman, I yield the balance of my time to the 
gentleman from New York (Mr. Nadler), the ranking member of the 
subcommittee.
  Mr. NADLER. Mr. Chairman, this amendment is harmless enough, and may 
do a little bit of good. I really do not think it is very important one 
way or the other.
  It is somewhat deceptive, however. It is somewhat deceptive. I am not 
going to urge a vote against it, but I do think we should have a word 
of caution here. It will lead to some misleading information because it 
demands that the credit card information tell us, the credit card 
information, not about our credit card, not about what we are doing, 
but about what some typical borrower might do if he were borrowing $500 
or $300 or $1,000.
  Unfortunately, this amendment was made in order by the Committee on 
Rules in order to avoid making in order the amendment of the gentleman 
from Massachusetts (Mr. Delahunt) which had real consumer protections 
in it. The amendment of the gentleman from Massachusetts, which was 
voted down on a party line vote in the committee, requires actual 
disclosure of minimum payments and interest based on the actual debt on 
our own credit card, rather than have the information just give samples 
which may bear no relationship to our own situation.
  The amendment of the gentleman from Massachusetts (Mr. Delahunt) has 
disclosure on teaser rates and penalties. They have to tell us that, 
the disclosure on penalties for having no interest, for paying in full, 
disclosures regarding prohibiting soliciting kids, and makes other real 
consumer protections and disclosures.
  Unfortunately, the Committee on Rules chose to make this basically 
irrelevant amendment and somewhat misleading amendment in order, and 
did not put in order the real amendment by the gentleman from 
Massachusetts (Mr. Delahunt), which parallels the provisions the Senate 
put in, sponsored by Senator Durbin in last year's bill, but which the 
conference committee took out.
  Now, I understand the authors of this bill do not want real consumer 
protections in this bill. It is supposed to be a one-sided bill. But it 
is too bad we have these illusory protections and somewhat misleading 
instead of real protections. Just another ground for voting against the 
bill.

[[Page H2705]]

  Mr. MORAN of Virginia. Mr. Chairman, I ask unanimous consent to 
reclaim the time I yielded back. I did not expect there would be these 
comments that I understand, while they are supportive, are not 
necessarily wholehearted endorsements.
  I do have speakers that would use what time is remaining, if the 
Speaker would tell me how much time is remaining, and I would ask 
unanimous consent if I could reclaim it and use it for speakers on 
behalf of the amendment.
  The CHAIRMAN pro tempore. The gentleman from Virginia (Mr. Moran) has 
6 minutes remaining.
  Is there objection to the request of the gentleman from Virginia?
  There was no objection.
  Mr. MORAN of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentleman from California (Mr. Dooley).
  (Mr. DOOLEY of California asked and was given permission to revise 
and extend his remarks.)
  Mr. DOOLEY of California. Mr. Chairman, I am proud to be a cosponsor 
of the amendment offered by the gentleman from Virginia (Mr. Moran).
  I would say that we are dedicated to providing for true consumer 
protection. This amendment does, I think, take a balanced and 
responsible approach to ensuring that consumers and those who are 
incurring debt will have the information they need in order to make 
informed decisions about their purchases and about the debt that they 
incur.
  The amendment goes a long ways to ensuring that consumers who are 
faced with credit card applications coming to them in their homes are 
fully aware of the real rates that they will be facing and ensuring 
that the teaser rates will be clearly distinguished.
  It also ensures that our consumers that unfortunately use credit 
cards in a manner which is not consistent with their ability to repay 
will have the information that will be disclosed to them, if they did 
make that payment of the monthly minimum payment, how long, in fact, it 
would take them to repay the obligation that they have incurred.
  I would say this: That all consumers are going to have to accept the 
personal responsibility to show their due diligence; to understand when 
they get a credit card application that nothing comes for nothing; that 
they have to read the print, they have to understand the obligations 
that they are incurring when they do make a purchase and they do use 
this tool, which ensures that many Americans have more affordable and 
accessible credit.
  I think this is a great amendment and I think it will go a long ways 
towards ensuring consumers have the information to make responsible 
purchasing decisions.
  Mr. MORAN of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentleman from New York (Mr. Ackerman), also a cosponsor of this 
amendment.

                              {time}  1400

  Mr. ACKERMAN. Mr. Chairman, we all have been told in so many words 
that bankruptcies are on the rise, and indeed they are, and that 
because of that everybody suffers because of increased interest rates 
and other charges. And we are also told, and rightfully so, that 
consumers need to take personal responsibility for their obligations. 
That is true, as well.
  As we address bankruptcy reform today, we have a unique opportunity 
to at least modestly combat part of this rising trend in bankruptcies, 
and one of the best ways that we can begin to tackle that is to have 
more information for consumers so that they are better informed and can 
make smarter decisions about their credit needs.
  How do we do this? First, with better and clearer disclosure rules 
for solicitations and credit applications. Every one of my colleagues 
here are familiar were the deluge of solicitations that we get in the 
mail almost on a daily basis advertising a particularly low 
introductory rate, and the rate is on the envelope and it does not tell 
us how long that rate is for and the consumer cannot make an objective 
kind of a decision; and then he borrows at a rate that he thinks he is 
going to have for a longer period of time and that ends and the 
interest rates goes up and he is paying more than he did under a 
previous credit card that he might have had that he switched over from.
  This is an opportunity for us to fix part of that problem, and that 
is why the gentleman from Virginia (Mr. Moran) and the gentleman from 
California (Mr. Dooley) and myself have introduced this amendment. The 
amendment requires lenders to provide consumers with the information 
they need to make informed decisions.
  Specifically, they would have to do several things. They would have 
to indicate the minimum payment and day that the payment is due on 
every periodic statement that they send. They would have to indicate 
what the late penalty deadlines are so that consumers have all the 
information they need in order to make that appropriate decision and 
meet their responsibilities and in order to avoid the imposition of 
late fees. And whenever a solicitation includes an introductory rate, 
it must be clear when that rate expires.
  I think these and some of the other small steps make it much better 
to avoid bankruptcy on the part of many consumers and users of credit.
  Mr. MORAN of Virginia. Mr. Chairman, I yield the remaining 2 minutes 
to the distinguished gentleman from Indiana (Mr. Roemer), co-chairman 
of the new Democrat Coalition.
  (Mr. ROEMER asked and was given permission to revise and extend his 
remarks.)
  Mr. ROEMER. Mr. Chairman, I thank my good friend from Virginia (Mr. 
Moran) and my good friend from California (Mr. Dooley), co-chairs of 
the new Democrat Coalition, for sponsoring the amendment, along with 
the gentleman from New York (Mr. Ackerman).
  I am a proud cosponsor of this legislation and a strong supporter of 
this amendment offered by my friends. I think there are two key issues 
as we debate this bankruptcy reform bill. One is personal 
responsibilities.
  We have seen a 94-percent increase in the filings of bankruptcy since 
1990. We need to address this, and I believe this bill does it in a 
coherent and fair fashion.
  The second issue that this amendment gets to is not so much credit 
card availability but consumer protections. There are two provisions in 
this amendment that I encourage my colleagues to take a look at and 
support. One is the minimum payment that we have, that we have better 
disclosures on how long it would simply take to repay a balance if they 
pay the minimum amount each month. That is the minimum payments 
requirement.
  Secondly, the so-called teaser rates is that companies need to 
disclose what that introductory rate is, if it is 9 or 10 percent, and 
then what it is going to go up to after it teases them with that first 
9 or 10 percent, if it is then going to be 11 or 12 or 18 or 19 percent 
later on. We need consumer disclosure and consumer protections.
  So this is a good amendment offered by the gentleman from Virginia 
(Mr. Moran) and the gentleman from California (Mr. Dooley) and the 
gentleman from New York (Mr. Ackerman). I strongly encourage my 
colleagues to support it. And, hopefully, that will continue to improve 
this bill and we will have a sound bill both on personal responsibility 
and the consumer protections aspects.
  The CHAIRMAN (Mr. Nethercutt). The question is on the amendment 
offered by the gentleman from Virginia (Mr. Moran).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in House Report 106-126.


            Amendment No. 3 Offered by Mr. Moran of Virginia

  Mr. MORAN of Virginia. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Moran of Virginia:
       Page 101, after line 9, insert the following (and make such 
     technical and conforming changes as may be appropriate):

     SEC. 154. DISCLOSURES.

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

     ``Sec. 527. Disclosures

       ``(a) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide the following notices to 
     the assisted person:
       ``(1) the written notice required under section 342(b)(1) 
     of this title; and

[[Page H2706]]

       ``(2) to the extent not covered in the written notice 
     described in paragraph (1) of this section and no later than 
     three business days after the first date on which a debt 
     relief agency first offers to provide any bankruptcy 
     assistance services to an assisted person, a clear and 
     conspicuous written notice advising assisted persons of the 
     following--
       ``(A) all information the assisted person is required to 
     provide with a petition and thereafter during a case under 
     this title must be complete, accurate and truthful;
       ``(B) all assets and all liabilities must be completely and 
     accurately disclosed in the documents filed to commence the 
     case, and the replacement value of each asset as defined in 
     section 506 of this title must be stated in those documents 
     where requested after reasonable inquiry to establish such 
     value;
       ``(C) current monthly income, the amounts specified in 
     section 707(b)(2) and, in a chapter 13 case, disposable 
     income (determined in accordance with section 707(b)(2)) must 
     be stated after reasonable inquiry; and
       ``(D) that information an assisted person provides during 
     their case may be audited pursuant to this title and that 
     failure to provide such information may result in dismissal 
     of the proceeding under this title or other sanction 
     including, in some instances, criminal sanctions.
       ``(b) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide each assisted person at 
     the same time as the notices required under subsection (a)(1) 
     with the following statement, to the extent applicable, or 
     one substantially similar. The statement shall be clear and 
     conspicuous and shall be in a single document separate from 
     other documents or notices provided to the assisted person:
       `` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE 
     SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER
       `` `If you decide to seek bankruptcy relief, you can 
     represent yourself, you can hire an attorney to represent 
     you, or you can get help in some localities from a bankruptcy 
     petition preparer who is not an attorney. THE LAW REQUIRES AN 
     ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A 
     WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY 
     PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. 
     Ask to see the contract before you hire anyone.
       `` `The following information helps you understand what 
     must be done in a routine bankruptcy case to help you 
     evaluate how much service you need. Although bankruptcy can 
     be complex, many cases are routine.
       `` `Before filing a bankruptcy case, either you or your 
     attorney should analyze your eligibility for different forms 
     of debt relief made available by the Bankruptcy Code and 
     which form of relief is most likely to be beneficial for you. 
     Be sure you understand the relief you can obtain and its 
     limitations. To file a bankruptcy case, documents called a 
     Petition, Schedules and Statement of Financial Affairs, as 
     well as in some cases a Statement of Intention need to be 
     prepared correctly and filed with the bankruptcy court. You 
     will have to pay a filing fee to the bankruptcy court. Once 
     your case starts, you will have to attend the required first 
     meeting of creditors where you may be questioned by a court 
     official called a ``trustee'' and by creditors.
       `` `If you choose to file a chapter 7 case, you may be 
     asked by a creditor to reaffirm a debt. You may want help 
     deciding whether to do so and a creditor is not permitted to 
     coerce you into reaffirming your debts.
       `` `If you choose to file a chapter 13 case in which you 
     repay your creditors what you can afford over three to five 
     years, you may also want help with preparing your chapter 13 
     plan and with the confirmation hearing on your plan which 
     will be before a bankruptcy judge.
       `` `If you select another type of relief under the 
     Bankruptcy Code other than chapter 7 or chapter 13, you will 
     want to find out what needs to be done from someone familiar 
     with that type of relief.
       `` `Your bankruptcy case may also involve litigation. You 
     are generally permitted to represent yourself in litigation 
     in bankruptcy court, but only attorneys, not bankruptcy 
     petition preparers, can give you legal advice.'.
       ``(c) Except to the extent the debt relief agency provides 
     the required information itself after reasonably diligent 
     inquiry of the assisted person or others so as to obtain such 
     information reasonably accurately for inclusion on the 
     petition, schedules or statement of financial affairs, a debt 
     relief agency providing bankruptcy assistance to an assisted 
     person, to the extent permitted by nonbankruptcy law, shall 
     provide each assisted person at the time required for the 
     notice required under subsection (a)(1) reasonably sufficient 
     information (which shall be provided in a clear and 
     conspicuous writing) to the assisted person on how to provide 
     all the information the assisted person is required to 
     provide under this title pursuant to section 521, including--
       ``(1) how to value assets at replacement value, determine 
     current monthly income, the amounts specified in section 
     707(b)(2)) and, in a chapter 13 case, how to determine 
     disposable income in accordance with section 707(b)(2) and 
     related calculations;
       ``(2) how to complete the list of creditors, including how 
     to determine what amount is owed and what address for the 
     creditor should be shown; and
       ``(3) how to determine what property is exempt and how to 
     value exempt property at replacement value as defined in 
     section 506 of this title.
       ``(d) A debt relief agency shall maintain a copy of the 
     notices required under subsection (a) of this section for two 
     years after the 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, as amended by 
     section 106, is amended by inserting after the item relating 
     to section 526 the following:

``527. Disclosures.''.

     SEC. 155. DEBTOR'S BILL OF RIGHTS.

       Subchapter II of chapter 5 of title 11, United States Code, 
     as amended by sections 106 and 154, is amended by adding at 
     the end the following:

     ``Sec. 528. Debtor's bill of rights

       ``(a) A debt relief agency shall--
       ``(1) no later than five business days after the first date 
     on which a debt relief agency provides any bankruptcy 
     assistance services to an assisted person, but prior to such 
     assisted person's petition under this title being filed, 
     execute a written contract with the assisted person 
     specifying clearly and conspicuously the services the agency 
     will provide the assisted person and the basis on which fees 
     or charges will be made for such services and the terms of 
     payment, and give the assisted person a copy of the fully 
     executed and completed contract in a form the person can 
     keep;
       ``(2) disclose in any advertisement of bankruptcy 
     assistance services or of the benefits of bankruptcy directed 
     to the general public (whether in general media, seminars or 
     specific mailings, telephonic or electronic messages or 
     otherwise) that the services or benefits are with respect to 
     proceedings under this title, clearly and conspicuously using 
     the following statement: `We are a debt relief agency. We 
     help people file Bankruptcy petitions to obtain relief under 
     the Bankruptcy Code.' or a substantially similar statement. 
     An advertisement shall be of bankruptcy assistance services 
     if it describes or offers bankruptcy assistance with a 
     chapter 13 plan, regardless of whether chapter 13 is 
     specifically mentioned, including such statements as 
     `federally supervised repayment plan' or `Federal debt 
     restructuring help' or other similar statements which would 
     lead a reasonable consumer to believe that help with debts 
     was being offered when in fact in most cases the help 
     available is bankruptcy assistance with a chapter 13 plan; 
     and
       ``(3) if an advertisement directed to the general public 
     indicates that the debt relief agency provides assistance 
     with respect to credit defaults, mortgage foreclosures, lease 
     eviction proceedings, excessive debt, debt collection 
     pressure, or inability to pay any consumer debt, disclose 
     conspicuously in that advertisement that the assistance is 
     with respect to or may involve proceedings under this title, 
     using the following statement: `We are a debt relief agency. 
     We help people file Bankruptcy petitions to obtain relief 
     under the Bankruptcy Code.' or a substantially similar 
     statement.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, as amended by 
     sections 106 and 154, is amended by inserting after the item 
     relating to section 527, the following:

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


  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
Virginia (Mr. Moran) and a Member opposed each will control 10 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I rise today to offer this amendment for the purpose of 
adding to the consumer protections that are already contained in H.R. 
833. We have all seen the advertisements. ``Consolidate your bills into 
one monthly payment without borrowing'' goes one. ``Stop credit 
harassment, foreclosures, repossessions, tax levies and garnishments'' 
is another advertisement. ``Wipe out your debts. Consolidate your 
bills. How? By using the protection that the Federal Government offers 
provided by Federal law.''
  We have seen these advertisements. They are all opportunities to 
exploit the consumer, exploit the consumer's ignorance. And they would 
be addressed by this bill. Because only later does the consumer find 
out that very often these phrases involve bankruptcy proceedings which 
can hurt their credit and cost them substantial attorney's fees. They 
often do not realize that very often these are bankruptcy mills that do 
not advise consumers on other options that they have, including 
consumer credit counseling, working out a repayment plan with their 
creditors, or getting a second mortgage.
  This amendment adds to the bill provisions requiring so-called ``debt 
relief organizations,'' but more appropriately sometimes ``bankruptcy 
mills,'' to make certain minimal disclosures to

[[Page H2707]]

consumer debtors and to prevent deceptive and fraudulent advertising 
practices that were identified by the Federal Trade Commission in their 
Consumer Alert.
  The disclosures are designed to ensure that debtors who retain the 
services of these organizations understand the nature of the services 
that are being provided, the cost of the services and, if the service 
includes placing the debtor into bankruptcy, the consequences of that 
action.
  This requirement was included in the conference report of last year's 
bankruptcy reform bill, which was overwhelmingly approved by the House 
of Representatives. The requirement is modeled on legislation enacted 
by Congress several years ago to address abuses by so-called credit 
repair organizations.
  Mr. GEKAS. Mr. Chairman, will the gentleman yield?
  Mr. MORAN of Virginia. I yield to the gentleman from Pennsylvania.
  Mr. GEKAS. Mr. Chairman, I rise to support the amendment of the 
gentleman. I must tell my colleagues, I was set back a bit when in the 
full committee this group of debtors' rights, ``debtors' rights'' I 
repeat, were removed from the bill. Just as the gentleman says, last 
year's effort resulted in a conference report that had this debtors' 
bill of rights as part and parcel.
  Now we are faced with the prospect of attempting to do, and I will 
help the gentleman do so, restore this same set of debtors' rights, and 
I will do everything I can to help the gentleman succeed.
  Mr. MORAN of Virginia. Mr. Chairman, I greatly appreciate the 
comments of the chair of the subcommittee.
  Mr. Chairman, I reserve the balance of my time.
  Mr. WATT of North Carolina. Mr. Chairman, I rise in opposition to the 
amendment, and I yield myself such time as I may consume.
  Mr. Chairman, I am saddened to have to rise in opposition to this 
amendment. This exact language that is proposed in this amendment was 
in the bill originally and was considered by the Committee on the 
Judiciary, and an amendment passed in the Committee on the Judiciary to 
remove this language from the bill.
  Now, the chairman of the subcommittee, who has risen to express his 
support for this amendment to put it back in, voted against that 
amendment in the committee. So it is not surprising that he would be 
here saying he likes the Moran amendment. But the majority of the 
Committee on the Judiciary, including a bipartisan group of 
individuals, not just Democrats or Republicans, both Democrats and 
Republicans, voted to remove this language from the bill.
  Now, why did they vote to do it? First of all, understand that there 
continues to be language in the bill which prohibits misrepresentation 
and misleading of the public by these persons who are assisting folks 
with bankruptcies. But remember that every attorney who does bankruptcy 
practice would be covered by this provision; every credit counseling 
service, consumer credit organization, many of which are governed by or 
under the city and county governments in our local communities, would 
be governed by these provisions; and these agencies would be put to the 
task of giving page after page after page of disclosures in an effort 
to get at a few bad people who are in this business.
  Now, I am not saying that there are not people who are providing 
credit counseling advice who are bad. There are people in the business 
who are bad. But 99 percent of the people who are providing advice to 
bankruptcy applicants or potential bankruptcy applicants are reputable 
people, attorneys who provide information and services, credit 
counseling services and the like, that we are simply imposing 
substantial burdens on if we put this language back in the bill, which 
the Committee on the Judiciary, I remind my colleagues, has taken out 
of the bill.
  If we start on page 3 of this proposed amendment and we go all the 
way over to page 5 of this proposed amendment, there are disclosures 
that would have to be made by anybody who even sat down and talked to 
somebody about the possibility of filing a bankruptcy. This is not for 
people who file bankruptcies, because these disclosures have to be 
given at the first encounter before there is even a decision to file 
bankruptcy.
  Most of the disclosures are, essentially, worthless because what most 
people will do is print up these disclosures verbatim from the bill and 
hand them to people when they come into their offices and nobody is 
going to read this stuff. And Republicans and Democrats alike 
acknowledge that these kinds of disclosures are simply worthless.
  Additionally, for those of us, including the gentleman from Virginia 
(Mr. Moran), who is the sponsor of this bill who say that they want to 
stop attorneys from soliciting folks to file bankruptcy, there are 
additional advertisements that must be given which require folks who 
advertise to say to the public, look, I am in the business of providing 
bankruptcy advice.
  That is exactly the kind of advertising we have been trying to 
discourage. That is not something that is furthering the public policy 
that underlies this bill.
  So, for those reasons, I want to state strongly that we do not want 
to impose additional burdens on good reliable business people. We want 
to, as the bill still does, prohibit false information from being given 
to potential filers of bankruptcy. But we do not need to burden the 
people who are the attorneys and credit counseling people who are 
reputable by forcing them to give page after page after page of useless 
disclosures.
  Mr. Chairman, I reserve the balance of my time.

                              {time}  1415

  Mr. MORAN of Virginia. Mr. Chairman, I yield myself such time as I 
may consume. I refer for the record to the Consumer Alert issued by the 
Federal Trade Commission warning consumers of exactly the situation 
that this amendment addresses, the fraudulent advertising, the kind of 
advertising that sucks consumers into a situation where they wind up 
declaring bankruptcy, which was not their original intent, because they 
were misled by the people that would be covered by this amendment.
  This amendment addresses abuses by ``bankruptcy mills'' which 
advertise themselves as debt counseling organizations or government 
sanctioned sources of assistance for consumers having difficulty 
meeting debt repayments. According to the Federal Trade Commission, 
consumers are frequently using these organizations without 
understanding that the only relief that these groups offer is to put 
the debtor into bankruptcy, sometimes when the debtor could have 
avoided such a drastic step through voluntary repayment arrangements.
  The amendment requires debt relief organizations to disclose the 
nature of the services they offer, explain to consumers the 
alternatives to filing bankruptcy, disclose the rights and obligations 
of a debtor who files for bankruptcy and the consequences of a 
bankruptcy filing. The purpose of the amendment is to educate the 
consumer about bankruptcy and bankruptcy mills before it is too late; 
in other words, before the debtor has made an uninformed decision.
  Those who feel that the answer to the growth in bankruptcies is 
increased disclosure about the consequences of incurring credit card or 
other debt should support the up-front disclosure approach of this 
amendment and not try to protect these lawyers who are exploiting the 
ignorance of their clients.
  This is an amendment that is entirely appropriate. It is appropriate 
that it be called the Debtor's Bill of Rights. It is directly 
addressing a warning that the Federal Trade Commission has made 
available to consumers. I would hope that the House would pass this 
unanimously.

     Federal Trade Commission, For Your Information, March 26, 1997

       Debt-burdened consumers who answer ads that offer to 
     ``consolidate bills'' or ``stop credit harassment'' may be 
     the targets of bankruptcy mills, according to a new 
     publication from the Federal Trade Commission. 
     ``Advertisements Promising Debt Relief May Be Offering 
     Bankruptcy,'' the FTC Consumer Alert warns.
       A record one million consumers file for bankruptcy in 1996, 
     according to the Alert. But bankruptcy can have a long-term 
     negative impact on creditworthiness; stays on

[[Page H2708]]

     you credit report for 10 years, and can hinder a consumer's 
     ability to get credit, a job, insurance or even a place to 
     live. ``Although bankruptcy is one option to deal with 
     financial problems, it's generally considered the option of 
     last resort,'' the publication says.
       The Alert says that some newspaper, magazine and telephone 
     directory ads give tip-offs that their ``debt consolidation'' 
     ads are really toting bankruptcy mills. Ads that make claims 
     such as:
       ``Consolidate your bills into one monthly payment without 
     borrowing;''
       ``Wipe out your debts! Consolidate your bills! How? By 
     using the protection and assistance provided by federal 
     law;'' and
       ``Stop credit harassment, foreclosures, repossessions'' . . 
     . ``Keep your Property,'' may be touting bankruptcy services 
     which can hurt consumers' credit and cost attorneys; fees, 
     the Alert says.
       The FTC advises that before considering bankruptcy, 
     consumers having trouble paying their bills should:
       Talk with their creditors who may be willing to work out a 
     modified payment plan;
       Contact a credit counseling service. Some nonprofit 
     organizations charge little or nothing for these services;
       Consider a second mortgage or home equity line of credit.
                                  ____


    Advertisements Promising Debt Relief May Be Offering Bankruptcy

       Washington, DC--Debt got you down? You're not alone. 
     Consumer debt is at an all-time high. What's more, record 
     numbers of consumers--more than 1 million in 1996--are filing 
     for bankruptcy. Whether your debt dilemma is the result of an 
     illness, unemployment, or simply overspending, it can seem 
     overwhelming. In your effort to get solvent, be on the alert 
     for advertisements that offer seemingly quick fixes. While 
     the ads pitch the promise of debt relief, they rarely say 
     relief may be spelled b-a-n-k-r-u-p-t-c-y. And although 
     bankruptcy is one option to deal with financial problems, 
     it's generally considered the option of last resort. The 
     reason: its long-term negative impact on your 
     creditworthiness. A bankruptcy stays on your credit report 
     for 10 years, and can hinder your ability to get credit, a 
     job, insurance, or even a place to live.
       The Federal Trade Commission cautions consumers to read 
     between the lines when faced with ads in newspapers, 
     magazines or even telephone directories that say: 
     ``Consolidate your bills into one monthly payment without 
     borrowing.'' ``STOP credit harassment, foreclosures, 
     repossessions, tax levies and garnishments,'' ``Keep Your 
     Property.'' ``Wipe out your debts! Consolidate your bills! 
     How? By using the protection and assistance provided by 
     Federal law. For once, let the law work for you!''
       You'll find out later that such phrases often involve 
     bankruptcy proceedings, which can hurt your credit and cost 
     you attorneys' fees.
       If you're having trouble paying your bills, consider these 
     possibilities before considering filing for bankruptcy:
       Talk with your creditors. They may be willing to work out a 
     modified payment plan.
       Contact a credit counseling service. These organizations 
     work with you and your creditors to develop debt repayment 
     plans. Such plans require you to deposit money each month 
     with the counseling service. The service then pays your 
     creditors. Some nonprofit organizations charge little or 
     nothing for their services.
       Carefully consider a second mortgage or home equity line of 
     credit. While these loans may allow you to consolidate your 
     debt, they also require your home as collateral.
       If none of these options is possible, bankruptcy may be the 
     likely alternative. There are two kinds of personal 
     bankruptcy: Chapter 13 and Chapter 7. Each must be filed in 
     federal court. The current filing fee is $160. Attorney fees 
     are additional and can vary widely. The consequences of 
     bankruptcy are significant and require careful consideration.
       Chapter 13, also known as a reorganization, allows you to 
     keep property, such as a mortgaged home or car, that you 
     otherwise might lose. Reorganization may allow you to pay off 
     a default during a period of three to five years, rather than 
     surrender any property.
       Chapter 7, known as a straight bankruptcy, involves 
     liquidating all assets that are not exempt in your state. 
     Exempt property may include work-related tools and basic 
     household furnishings. Some property may be sold by a court-
     appointed official or turned over to creditors. You can file 
     for Chapter 7 only once every six years. Both types of 
     bankruptcy may get rid of unsecured debts and stop 
     foreclosures, repossessions, garnishments, utility shut-offs, 
     and debt collection activities. Both also provide exemptions 
     that allow you to keep certain assets, although exemption 
     amounts vary among states. Personal bankruptcy usually does 
     not erase child support, alimony, fines, taxes, and some 
     student loan obligations. Also, unless you have an acceptable 
     plan to catch up on your debt under Chapter 13, bankruptcy 
     usually does not allow you to keep property when your 
     creditor has an unpaid mortgage or lien on it.
       Visit the FTC web site at www.ftc.gov, or contact the 
     AFSA's Education Foundation at 1-888-400-2233 for more 
     credit/money management information.

  Mr. Chairman, I reserve the balance of my time.
  Mr. WATT of North Carolina. Mr. Chairman, I reserve the balance of my 
time. I believe it is my right to close as a member of the committee 
and in defense of the bill.
  The CHAIRMAN. The gentleman from North Carolina is correct.
  Mr. MORAN of Virginia. Mr. Chairman, I guess I must not fully 
understand parliamentary procedure. I thought that the person 
introducing the amendment has the right to close on the amendment.
  How much time do I have remaining, Mr. Chairman?
  The CHAIRMAN. The gentleman from Virginia (Mr. Moran) has 4 minutes 
remaining, and the gentleman from North Carolina (Mr. Watt) has 4 
minutes remaining.
  Mr. MORAN of Virginia. Mr. Chairman, I yield myself such time as I 
may consume.
  Since this is going to be challenged, let me again say for the 
Members who may be listening that this is a Debtor's Bill of Rights. It 
strengthens this bill. It responds to a very serious concern that the 
Federal Trade Commission has stipulated in its Consumer Alert. It 
informs debtors who retain the services of bankruptcy mills to disclose 
the services, the costs and the consequences, and particularly the 
consequences of filing for bankruptcy. We do not want people to have to 
file for bankruptcy, particularly people who never intended to file for 
bankruptcy.
  Mr. GEKAS. Mr. Chairman, will the gentleman yield?
  Mr. MORAN of Virginia. I yield to the gentleman from Pennsylvania.
  Mr. GEKAS. I wanted to add to the gentleman's sentiments, that who 
can be opposed to the idea that an individual who is contemplating 
bankruptcy should be given full disclosure on what entities or others 
out there who are ready to assist him or prod him into bankruptcy? What 
we are talking about is if we could do it, to prevent people from 
jumping headlong into bankruptcy, we ought to take every step in order 
to do that.
  The gentleman from North Carolina (Mr. Watt) is correct that I voted 
against his amendment in committee. I will remind him at the proper 
time of how many other votes then were taken on a bipartisan basis that 
he opposes still. So that is not a criterion, that when a bill is 
passed on a bipartisan basis, he believes it is worthy of something. So 
do I. But I will remind him when the time comes of bipartisan support 
for X or Y and see if he has the same rationale applicable to that 
amendment.
  But in the meantime, it is not a bad thing to let a prospective 
bankrupt individual look at all the possible traps into which he can 
fall. I commend the gentleman's return to sanity through the debtor's 
rights amendment.
  Mr. MORAN of Virginia. I thank the gentleman for his comments.
  Mr. Chairman, if I may briefly sum up my argument, which is simply 
that so-called debt relief agencies that are coming out with this kind 
of deliberately misleading advertising suggesting even that they are 
government sanctioned organizations, which they are not, they should be 
required to give written notice within 3 business days after the first 
date of services to advise the people they are allegedly assisting of 
their rights and responsibilities of disclosure.
  It would require attorneys or bankruptcy petition preparers to give 
the person they are assisting a written contract specifying what the 
attorney or bankruptcy petition preparer will do, what it will cost and 
the terms of payment. That is what we would want for our mother or our 
spouse or our children or our neighbor or any other consumer in the 
United States, to be able to have the value of that kind of 
information.
  This is a consumer amendment, to educate consumers so they do not get 
taken in by people who are designing to exploit them and exploit the 
bankruptcy system. Mr. Chairman, I strongly urge an ``aye'' vote on 
this amendment.
  Mr. Chairman, I yield back the balance of my time.
  Mr. WATT of North Carolina. Mr. Chairman, I yield myself the balance 
of my time.
  Mr. Chairman, let me just advise my colleagues that these bankruptcy 
mills that the gentleman from Virginia (Mr. Moran) is talking about are 
attorneys who provide bankruptcy services, consumer credit counseling 
services, many

[[Page H2709]]

of whom are sanctioned by local governments because they provide a very 
valuable service in local communities. I have one in my own community 
of Charlotte. I was on the board of directors of this nonprofit agency 
which receives substantial government funds and provides a major 
service when people get into debt.
  We can characterize every single one of these people as bankruptcy 
mills if we want, but they are not. To try to inflame the opinions of 
the colleagues in this body by referring to every lawyer who practices 
bankruptcy law or every consumer credit counselor as a bankruptcy mill 
is just inaccurate and unfair and it should not be done. There are some 
bad apples in the barrel.
  For those we need to understand, Mr. Chairman, that there is a 
specific provision which remains in this bill, this section 526, which 
says that a debt relief agency shall not do a whole list of things that 
are listed in this bill. One of those things it shall not do is 
misrepresent to any assisted person or prospective assisted person, 
directly or indirectly, affirmatively or by material omission, what 
services the debt relief agency can reasonably expect to provide that 
person or the benefits, and it goes on and on and on.
  There is a prohibition in this bill against the kind of activity that 
the gentleman from Virginia (Mr. Moran) is trying to outlaw. I think it 
ought to be outlawed, but we ought not impose the burdens of all of 
these disclosures on the reputable people who are in the business.
  He says that we have got to stop this faulty advertising, but what 
does his amendment do? I am reading directly from page 8 of his 
amendment. If you do an advertisement, under the Moran amendment, this 
is what you have got to say, in quotes:
  ``We are a debt relief agency. We help people file bankruptcy 
petitions to obtain relief under the Bankruptcy Code.''
  I do not want people to be disclosing that or saying that to the 
public. I want to stop people from advertising. And yet the same people 
he is saying we want to stop from faulty advertising, he is telling 
them how to go out and advertise in a misleading way. That is not what 
we need to be doing, is undermining the policy of the bill.
  Mr. Chairman, I understand his motivations for this amendment. I 
understand that there may be some lawyers he does not like, there may 
be some consumer credit counselors that he does not like. There are 
some that I do not like. That is why we have prohibited them in the 
bill from engaging in any kind of sinister activities. But that is 
different than requiring every reputable lawyer and every reputable 
consumer credit counseling service to give page after page after page 
of worthless disclosures. I encourage my colleagues to vote against 
this amendment. It just adds paperwork and adds burdens to small 
businesses. That is what it does.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Virginia (Mr. Moran).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.
  Mr. WATT. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 158, further proceedings 
on the amendment offered by the gentleman from Virginia (Mr. Moran) 
will be postponed.
  It is now in order to consider amendment No. 4 printed in House 
Report 106-126.


                Amendment No. 4 Offered by Ms. Velazquez

  Ms. VELAZQUEZ. Mr. Chairman, I offer an amendment made in order by 
the rule.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Ms. Velazquez:
       Page 109, line 23, insert ``(a) Appointment.--''.
       Page 110, line 4, insert the following before the close 
     quotation marks:

     The court may expand the membership of a committee to include 
     a creditor that is small business if the court determines 
     that such creditor holds claims of the kind represented by 
     such committee that are, in the aggregate, disproportionately 
     large when compared to the annual gross revenue of such 
     creditor.
       Page 110, after line 4, insert the following:
       (b) Information.--Section 1102(b) of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(3) A committee appointed under subsection (a) shall 
     provide access to information for creditors who hold claims 
     of the kind represented by such committee and who are not 
     appointed such committee, shall to be open for comment from 
     such creditors, and shall be subject to a court order 
     compelling additional reports or disclosure to be made to 
     such creditors.''.

  The CHAIRMAN. Pursuant to House Resolution 158, the gentlewoman from 
New York (Ms. Velazquez) and a Member opposed each will control 10 
minutes.
  The Chair recognizes the gentlewoman from New York (Ms. Velazquez).
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, while H.R. 833 provides a plan for overhauling our 
Nation's bankruptcy law, there is one issue that, while seemingly 
small, will have a great impact on this Nation's small businesses. That 
is the way that the bankruptcy process leaves small businesses who are 
creditors on the outside looking in.
  To solve this problem, I am offering an amendment that will quickly 
and fairly address the issue by ensuring more small business 
involvement and greater communication in the bankruptcy process. My 
amendment will make two simple changes.
  First, it would allow a small business involved as a creditor in a 
Chapter 11 bankruptcy case to be added to the creditor committee by the 
court. The court could make such an appointment by comparing the amount 
of the claim as a proportion of the business' gross annual revenue, 
thus showing that a business is disproportionately affected.
  Second, my amendment will ensure that those small businesses not 
included on the creditor committee will have access to critical 
information regarding the credit committee's actions. This could be 
achieved by simply making the committee open to comments from and 
required to provide additional information to those small businesses 
not included on the committee but who will nonetheless be affected by 
the outcome.
  I urge the adoption of these measures which will help small 
businesses. The need to take them can be underscored by looking at just 
one example of a company that was nearly devastated when one of its 
customers filed for bankruptcy.
  Unicare Corporation, a small business located in Ohio, was caught off 
guard when one of its largest customers filed for bankruptcy. The debt 
to Unicare represented almost 10 percent of the company's annual 
revenue. The bankruptcy court created an unsecured creditors committee 
based on total outstanding debts owed.

                              {time}  1430

  Not only did Unicare not qualify as a member of the credit committee, 
but it was left on the outside looking in with no involvement in the 
process. This made Unicare's future uncertain, forcing it to reduce 
staff and revise plans for expansion. Fortunately, because of hard work 
and strong strategic planning, Unicare was able to recover, and today 
it continues as a very strong business.
  But, Mr. Chairman, if each of us were to look around our districts, 
we will find that we will have many small businesses that could face 
the same unfair challenge, which is why we need to adopt this uniform 
and practical solution. Because, unlike Unicare, many businesses in our 
communities might not be so fortunate. If small businesses had the 
ability to appeal to the court based on their claim compared to the 
overall effect on the company, devastating problems might be averted.
  Finally, Mr. Chairman, when we reconvene in the full House, I will 
submit for the record a letter of support from Small Business United, 
this Nation's oldest small business trade association. Their support 
reflects the same concern that I have heard from small business owners. 
They need access to the bankruptcy process.
  We must insure that small businesses are not financially crippled 
through no fault of their own and that their hard work is not undone by 
the failures of others. I urge the adoption of this amendment.
  Mr. TALENT. Mr. Chairman, will the gentlewoman yield?

[[Page H2710]]

  Ms. VELAZQUEZ. I yield to the gentleman from Missouri.
  Mr. TALENT. Mr. Chairman, I rise in support of the gentlewoman from 
New York's very timely and important amendment and congratulate her on 
this important amendment for small business; and, Mr. Chairman, all of 
us who have dealt with small businesses in this kind of a context 
understand the problem the gentlewoman's amendment is intended to 
adopt.
  I mean, let us suppose that a firm goes bankrupt and that it owes 
Microsoft $100,000 for software and it owes a small consulting firm, 
computer consulting firm, 30 or $35,000 for the work that has been done 
and that both of them are unsecured creditors. Well, Microsoft is going 
to get on the creditors committee because it has the larger debt, but 
$100,000 to Microsoft may be nothing, in terms of that firm is nothing 
in terms of that firm's total revenue. But that 30 or $35,000 could be 
a crucial account for that small business consulting firm, and they 
need to be represented on the creditors committee. That is really the 
only way that their interests can be protected.
  The gentlewoman's amendment allows the court to appoint that small 
business to the creditors committee. It does not require it, but it at 
least allows that small business to make its case to the court. I think 
it is a timely and important amendment, Mr. Chairman.
  There is nothing worse really than a small business caught up in 
this, an unforeseen bankruptcy on the part of one of its important 
clients. It cannot protect its interests, it does not know what is 
going on, does not have the money to hire legions of lawyers the way 
the bigger, unsecured creditors do.
  Again, I congratulate the gentlewoman for fixing what I think is, if 
not a problem in the bill, at least an absence in the bill of an 
important protection for small business. I am pleased to support the 
amendment, and I thank the gentlewoman from New York for having 
yielded.
  Mr. CONYERS. Mr. Chairman I yield myself such time as I may consume.
  Mr. Chairman, I want to thank the gentlewoman from New York (Ms. 
Velazquez) for bringing forward the provision before us now that would 
allow the expansion of the credit committee membership and also ensure 
better access to information for the small businesses not included on 
the committee by allowing them to be open for comment and subject to 
additional reports or disclosures. And so we have no problem with this 
amendment.
  I would also point out to the gentlewoman from New York that there is 
another amendment of mine coming up shortly dealing with small 
business, she serves with great distinction on the Committee on Small 
Business, in which we would allow small business debtors in cases where 
application of these provisions could result in the loss of five or 
more jobs to waive the provisions of chapter 11 that relate to other 
business debtors, and I hope that that will gain her attention and 
other members that serve on that committee.
  So we have no objection to this amendment whatsoever, Mr. Chairman.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may 
consume, and I would like to close.
  Mr. Chairman, for too long small businesses who are creditors have 
been hurt when customers and clients have been unable to pay their 
bills. For small businesses, the bankruptcy of other companies can mean 
an uncertain future. The adoption of my amendment provides small 
businesses with some peace of mind.
  I urge my colleagues to support this amendment and to support small 
businesses.
  Mr. Chairman, I include the following letter for the Record:


                               National Small Business United,

                                      Washington, DC, May 3, 1999.
     Hon. Nydia Valazquez,
     House of Representatives,
     Washington, DC.
       Dear Representative Velazquez: As the House Rules 
     Committee, and subsequently the entire House of 
     Representatives, considers H.R. 833--the Bankruptcy Reform 
     Act of 1999--NSBU fully supports your amendment protecting 
     small businesses. National Small Business United, the 
     nation's oldest small business advocacy organization, is a 
     member of the Coalition for Financial Responsibility and has 
     been a leading participant in this important debate for many 
     years. We see your amendment as an important addition to the 
     bill that has already cleared the Judiciary Committee.
       Your amendment provides vital language that would allow for 
     greater small business representation on the unsecured 
     creditors committees, the key working group that structures 
     and partitions the payments a bankrupt company owes its 
     creditors. Traditionally, those companies that are owed the 
     greatest lump sum of money have been placed on these 
     committees, with little to no requirement to keep other 
     interested companies informed of the situation. Your 
     amendment would allow for greater communication and a more 
     vital small business involvement in this process.
       For too long, small businesses have been hurt when 
     customers and clients have been unable to pay their bills 
     without representation. This practice would be limited by 
     this important legislation and has the full support of our 
     65,000 members nationwide. If there is anything else we can 
     do to assist you in your efforts on before of the nation's 
     23.3 million small businesses, please let us know.
           Sincerely,
                                                   Todd McCracken,
                                                        President.

  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time has expired.
  The question is on the amendment offered by the gentlewoman from New 
York (Ms. Velazquez).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider Amendment No. 5 printed 
in House Report 106-126.


                 Amendment No. 5 Offered by Mr. Graham

  Mr. GRAHAM. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Graham:
       Page 119, after line 9, insert the following (and make such 
     technical and conforming changes as may be appropriate):

     SEC. 219. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS 
                   AND LOANS.

       Section 523(a)(8) of title 11, United States Code, is 
     amended to read as follows:
       ``(8) for--
       ``(A) an educational benefit overpayment or loan made, 
     insured or guaranteed by a governmental unit, or made under 
     any program funded in whole or in part by a governmental unit 
     or nonprofit institution, or for an obligation to repay funds 
     received as an educational benefit, scholarship or stipend; 
     or
       ``(B) any other education loan incurred by an individual 
     debtor that meets the definition of `Qualified Education 
     Loan' under section 221(e)(1) of the Internal Revenue Code; 
     unless excepting such debt from discharge under this 
     paragraph will impose an undue hardship on the debtor and a 
     debtor's dependents;''.

         Modification to Amendment No. 5 Offered By Mr. Graham

  Mr. GRAHAM. Mr. Chairman, I ask unanimous consent to modify my 
amendment, that modification is at the desk.
  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Modification offered by Mr. Graham to Amendment No. 5:
       Page 119, after line 9, insert the following (and make such 
     technical and conforming changes as may be appropriate):
       

     SEC. 219. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS 
                   AND LOANS.

       Section 523(a)(8) of title 11, United States Code, is 
     amended to read as follows:
       ``(8) for--
       ``(A) an educational benefit overpayment or loan made, 
     insured or guaranteed by a governmental unit, or made under 
     any program funded in whole or in part by a governmental unit 
     or nonprofit institution, or for an obligation to repay funds 
     received as an educational benefit, scholarship or stipend; 
     or
       ``(B) any other education loan incurred by an individual 
     debtor that meets the definition of `Qualified Education 
     Loan' under section 221(e)(1) of the Internal Revenue Code;
     unless excepting such debt from discharge under this 
     paragraph will impose an undue hardship on the debtor and a 
     debtor's dependents;''.

  Mr. GRAHAM (during the reading). Mr. Chairman, I ask unanimous 
consent that the modification to Amendment No. 5 be considered read and 
printed in the Record. 
  The CHAIRMAN. Is there objection to the request of the gentleman from 
South Carolina?
  There was no objection.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
South Carolina that Amendment No. 5 be modified?
  There was no objection.
  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
South Carolina (Mr. Graham) and a Member opposed each will control 10 
minutes.

[[Page H2711]]

  The Chair recognizes the gentleman from South Carolina (Mr. Graham).
  (Mr. Graham asked and was given permission to revise and extend his 
remarks.).
  Mr. GRAHAM. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, very briefly, this amendment is designed to correct a, 
I think, flaw in the Bankruptcy Code regarding student loans.
  Under our current Bankruptcy Code, a Federal- guaranteed student loan 
is a nondischargeable loan. As many students graduate from college with 
a student debt, they are starting their lives, and we have protected 
the Federal-guaranteed student loans from discharge from bankruptcy 
because I think that is just a common-sense approach to a problem that 
existed in the past.
  In addition, nonprofit lending organizations are also protected under 
the Bankruptcy Code, that their student loans are nondischargeable.
  There is a growing industry in the private sector. There is a $1.25 
billion loan volume for where private lenders who will loan money to 
students for their college expenses as the federally guaranteed program 
does not in every occasion meet the needs of the student, and we are 
trying to give the private lender the same protection under bankruptcy 
that the federally guaranteed loan program has and nonprofit 
organizations have. We are trying to make sure they are available 
loans, loans are available to students to meet their financial needs, 
and this would have a beneficial effect, make sure that the loan volume 
necessary to take care of college expenses are available for students, 
and I would appreciate the cooperation from the gentleman from New York 
(Mr. Nadler) and the gentleman from Pennsylvania (Mr. Gekas) on this 
amendment.
  Mr. GEKAS. Mr. Chairman, will the gentleman yield?
  Mr. GRAHAM. I yield to the gentleman from Pennsylvania.
  Mr. GEKAS. Mr. Chairman, I want to indicate to the gentleman that the 
amendment is well thought out and is a necessary change to our original 
bill. It draws attention to our intent to treat everybody fairly, and 
the student loan quotient is one of the most important features in all 
of bankruptcy.
  We thank the gentleman for that, and I will agree to the amendment.
  Mr. GRAHAM. Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  The CHAIRMAN. Does the gentleman from Michigan claim the time in 
opposition to the amendment offered by the gentleman from South 
Carolina?
  Mr. CONYERS. Absolutely. Mr. Chairman, I claim time in opposition to 
the amendment.
  The CHAIRMAN. The gentleman from Michigan (Mr. Conyers) is recognized 
for 10 minutes.
  Mr. CONYERS. Mr. Chairman, I will not oppose the amendment. As a 
matter of fact, I think particularly with an inclusion for exceptions 
for undue hardships this amendment is an important one.
  The Bankruptcy Code prohibits the discharge of federally made 
guaranteed or insured education loans or education loans made by 
nonprofit institutions. What the gentleman from South Carolina would do 
now is extend the prohibition from discharge to all qualified education 
loans and include exceptions for undue hardships.
  That is the thrust of the amendment, and we have no objection to that 
whatsoever.
  Mr. Chairman, I yield back the balance of my time.
  Mr. GRAHAM. Mr. Chairman, I thank the gentleman from Michigan (Mr. 
Conyers), and I yield back the balance of my time.
  The CHAIRMAN. All time has expired.
  The question is on the amendment, as modified, offered by the 
gentleman from South Carolina (Mr. Graham).
  The amendment, as modified, was agreed to.
  The CHAIRMAN. It is now in order to consider Amendment No. 6 printed 
in House Report 106-126.


          Amendment No. 6 Offered by Mr. Dooley of California

  Mr. DOOLEY of California. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mr. Dooley of California:
       Page 124, strike lines 13 through 20, and insert the 
     following:
       ``(a) The clerk of each district shall maintain a publicly 
     available list of credit counseling agencies and of programs 
     described in section 109(h) and instructional courses offered 
     by such agencies currently approved by--
       ``(1) the United States Trustee; or
       ``(2) the bankruptcy administrator for the district.
       ``(b) The United States Trustee or bankruptcy administrator 
     shall only approve credit counseling agencies which satisfy 
     standards set in regulations promulgated by the Federal Trade 
     Commission and which are accredited by the Council on 
     Accreditation or an equivalent third party nonprofit 
     accrediting organization.
       ``(c) The United States Trustee or bankruptcy administrator 
     shall only approve programs or courses under subsection (a) 
     if they satisfy standards set in regulations promulgated by 
     the Executive Office of the United States Trustees. The 
     Executive Office of the United States Trustee is authorized 
     to promulgate regulations setting such standards.
       ``(d) The Federal Trade Commission shall have authority to 
     promulgate regulations setting standards for credit 
     counseling agencies for the purposes of subsection (b). Such 
     standards shall establish minimum requirements for such 
     agencies with respect to providing qualified counselors, 
     safekeeping and payment of client funds, disclosure to 
     clients, adequate counseling with respect to client credit 
     problems, and such other matters as relate to the quality and 
     financial security of such programs. Nothing in this 
     provision shall limit the authority of the Federal Trade 
     Commission pursuant to the Federal Trade Commission Act (15 
     U.S.C. 45 et seq.).
       ``(e) The United States Trustee or bankruptcy administrator 
     may notify the clerk that a credit counseling agency, or a 
     program or course, is no longer approved, in which case the 
     clerk shall remove it from the list maintained under 
     subsection (a).
       ``(2) Regulations.--The Federal Trade Commission and the 
     Executive Office of United States Trustees shall promulgate 
     regulations pursuant to the power delegated in this section 
     within 180 days of the date of the enactment of this Act.''.
       Page 124, line 21, strike ``(2)'' and insert ``(3)''.

  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
California (Mr. Dooley) and a Member opposed each will control 10 
minutes.
  The Chair recognizes the gentleman from California (Mr. Dooley).
  Mr. DOOLEY of California. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, my amendment is very simple and straightforward. Simply 
put, it would require consumer credit counselors to meet basic 
professional standards established by the Federal Trade Commission.
  One of the most progressive and debtor-friendly reforms made in H.R. 
833 is the requirement that debtors seek credit counseling prior to 
filing bankruptcy. Many consumers want assistance in dealing with their 
bills, not bankruptcy. Legitimate consumer credit counseling helped 
approximately 1 million debtors this past year. This bill provides the 
opportunity for many more to receive help.
  Done properly by a qualified professional, consumer credit counseling 
has proven highly successful in helping debtors regain control over 
their financial lives, a goal we all share. Many of my colleagues are 
familiar with the Federal Trade Commission's struggle to clean up 
abusive and fraudulent credit repair clinics that dupe debtors facing 
financial problems with promises to clean up their credit records.
  The FTC has worked to protect consumers through the provisions 
approved by Congress several years ago as a part of the Fair Credit 
Reporting Act. However, as the opportunities for credit counseling 
would be significantly increased under this bill, we need to ensure 
from the outset that fraudulent and abusive credit counseling 
operations do not spring up and meet this new demand for services.
  My amendment is designed to ensure that consumers have access to 
qualified, professional consumer credit counselors and to prevent the 
proliferation of substandard counseling practices. The amendment will 
provide that the U.S. trustee or bankruptcy administrator can only 
approve credit counseling agencies which satisfy standards set in 
regulations promulgated by the FTC and are credited by the Council of 
Accreditation or equivalent third-party nonprofit accrediting 
organization. The FTC is able and experienced in addressing issues of 
this nature.
  With this amendment we have an opportunity to ensure that the credit

[[Page H2712]]

counseling provisions of this legislation will function as intended 
from the outset and that consumers will have access to qualified credit 
counseling.
  I urge my colleagues to support this common-sense amendment.
  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN. Does any Member claim time in opposition to the 
amendment offered by the gentleman from California (Mr. Dooley)?
  Mr. CONYERS. For purposes of getting the floor I oppose the 
amendment, and I ask to be recognized.
  The CHAIRMAN. Without objection, the gentleman from Michigan may have 
the time otherwise reserved for those in opposition.
  There was no objection.
  The CHAIRMAN. The Chair recognizes the gentleman from Michigan (Mr. 
Conyers) for 10 minutes.
  Mr. CONYERS. Mr. Chairman, this is an amendment that we find 
absolutely acceptable, and I plan to support it, and we urge the 
Members to join in support of it.
  Mr. Chairman, I yield back the balance of my time.
  Mr. DOOLEY of California. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I urge the passage of this amendment.
  Mr. Chairman, I yield back the balance of my time.

                              {time}  1445

  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from California (Mr. Dooley).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 7 printed 
in House Report 106-126.


                 Amendment No. 7 Offered by Mr. Conyers

  Mr. CONYERS. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Mr. Conyers:
       Page 151, after line 24, insert the following (and make 
     such technical and conforming changes as may be appropriate):

     SEC. 416. APPLICABILITY OF CERTAIN PROVISIONS.

       The provisions of title 11 of the United States Code 
     relating to small business debtors or to single asset real 
     estate shall not apply in a case under such title if the 
     application of any of such provisions in such case could 
     result in the loss of 5 or more jobs.

  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
Michigan (Mr. Conyers), and the gentleman from Pennsylvania (Mr. Gekas) 
each will control 10 minutes.
  The Chair recognizes the gentleman from Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, as usual, there is a good deal of talk about preserving 
jobs and creating jobs in the House of Representatives. Accordingly, if 
we really want to protect jobs, there should be little problem in 
supporting my amendment which waives the harsh new small business and 
single asset real estate provisions of the bill where they could result 
in the loss of five jobs or more. We are now talking about small 
business and protecting the jobs therein under the bankruptcy bill.
  Now, the measure before us would completely alter the manner in which 
small business and real estate concerns may reorganize under the 
bankruptcy laws. For small businesses, H.R. 833 would mandate the 
operation of a whole host of burdensome new requirements, requiring 
them to provide balance sheets, for example, statements of operation, 
cash flow statements, income tax returns, within 3 days after filing a 
bankruptcy petition.
  The bill also shortens the time period the debtor has to file a plan 
of reorganization to a mere 90 days, making liquidations far more 
likely than they might have otherwise been.
  Now I have no problem with these new requirements, as long as the 
principal parties involved are the business owner and his creditor, but 
where the new deadlines will result in a loss of jobs, there I have a 
major concern.
  These provisions have drawn the strong opposition of organized labor 
and the Small Business Administration's Office of Advocacy. I think my 
amendment is a way out of this dilemma.
  The American Federation of Labor has warned that the small business 
provisions will threaten jobs by placing substantial procedural and 
substantive barriers in the way of small businesses and their ability 
to access the provisions of Chapter 11, threatening their overall 
ability to successfully reorganize and go on to succeed.
  Similarly, the Small Business Administration has written that under 
the bill H.R. 833, small business owners who are legitimately using 
Chapter 11 proceedings to reorganize their businesses may be forced 
into a premature dismissal or conversion or may have to expend vital 
resources to fend off challenges by any creditor for relatively minor 
procedural infractions.
  So we urge that this amendment be accepted and crafted into this 
bill. It would help at least in a small way those small businesses who 
might be in a position to lose five or more jobs as a result of 
bankruptcy proceedings.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the record should indicate right at the outset that the 
provisions that we have built into the current legislation having to do 
with small business have reached the highest possible approval by the 
advocate of the Small Business Administration, the Justice Department 
itself, and most importantly for this debate, of the Bankruptcy 
Commission on whom we relied for this extensive comprehensive review 
that they finished a few years back.
  So we start off with a creditable small business set of provisions 
which now the gentleman, if this amendment should be adopted, would 
absolutely wreck. Beyond that, one can imagine that every case that 
came under Title 11, as the gentleman proposes in his amendment, would 
first have to be scrutinized to see if five or more jobs would or could 
be lost, and we would never get to the first event in a bankruptcy 
situation before we had had time to litigate the number of jobs.
  What if someone contends there are only four affected or others say 
none would be affected? That entire set of circumstances would have to 
be litigated. It is a monstrous scenario of additional litigation 
proposed in a situation where we have already structured the provisions 
in such a way to have met the approval of everybody who looks at the 
small business provisions of our bill.
  Beyond that, the wording of the bill seems to indicate that not just 
the small business provisions of Chapter 11 would be affected but any 
and all provisions of the title known as 11 would be affected, and we 
would have to take this test of five jobs, which in itself is very 
murky, very cloudy. How many jobs would be included, part-time, full-
time? How many individuals? If somebody is carrying on two occupations 
in the same firm, would that apply? It is so nondescriptive of any real 
problem that we must reject it out of hand.
  I ask all the Members to vote ``no'' on this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself 1 minute.
  Mr. Chairman, I would like to remind the esteemed chairman of the 
subcommittee that the Bankruptcy Commission was the one that turned 
down means testing, which has now been put into the bill. So I am glad 
that he picks and chooses those that he likes.
  There are some people involved in labor that have a strong opposition 
to the bill without this amendment. They are called the AFL-CIO. That 
is the largest collective bargaining organization in the United States 
of America. They have examined it pretty carefully.
  Mr. Chairman, I yield such time as he may consume to the gentleman 
from New York (Mr. Nadler), the ranking member of the subcommittee.
  Mr. NADLER. Mr. Chairman, this amendment is really in the nature of 
the truth. We say that this bill imposes very onerous restrictions on 
small businesses. It imposes very sharp and restrictive time deadlines 
and terrible restrictions only on small businesses.
  We think this is going to result in a lot of businesses that 
otherwise would have the opportunity to reorganize in Chapter 11 to get 
protection from their debtors, reorganize, get back on their feet and 
survive and not lay off all their employees, it will require instead 
that a lot of these companies liquidate

[[Page H2713]]

and go out of business and lay off their employees because they will 
not be able to meet these new restrictions.
  Now, the gentleman from Pennsylvania (Mr. Gekas) and the people on 
the other side say, no, that will not happen. Well, all this amendment 
says is, well, maybe they are right, maybe they are wrong.
  In a given case, the judge is looking over the situation in this 
case, and if the judge finds that there is a likelihood that this 
company, which is now seeking Chapter 11 protection from its creditors, 
could reorganize, could get back on its feet, could avoid liquidating, 
could avoid laying off its employees, but he further finds that if 
these new onerous restrictions are imposed and timetables that that 
would probably force the company out of business and would cost at 
least five jobs, it lets the judge say, ``It really looks like this is 
going to cost five jobs, so I will not impose these new restrictions on 
this small business.'' If the judge makes the finding that these new 
restrictions will kill this business, force this job loss and force 
this business out of business, the judge would be given the discretion 
to say, use the old law, not these new restrictions.
  What could be fairer than to look at the individual case?
  Now, the gentleman from Pennsylvania (Mr. Gekas) will say this is 
extensive litigation. No, it is not. It is simply a company asking for 
Chapter 11 protection and saying, ``Judge, we think we need X time but 
this gives us less time, and here is why we think we need so much 
additional time as we could have gotten under the old law,'' and the 
judge says either yes or no. Why not let the judge have that 
discretion?
  I know that the gentleman from Pennsylvania (Mr. Gekas) and other 
proponents of this bill do not trust human beings; they do not trust 
judges at all. They say throughout this bill judges have no discretion; 
they are always wrong. Maybe they are always wrong, but give them a 
chance to save some jobs and save some small businesses. That is all 
this amendment does.
  I do not see how anybody who cares about small businesses or jobs 
could oppose this amendment. It just boggles the mind.
  Mr. GEKAS. Mr. Chairman, I yield 4 minutes to the gentleman from 
Michigan (Mr. Knollenberg).
  Mr. KNOLLENBERG. Mr. Chairman, I thank the gentleman from 
Pennsylvania (Mr. Gekas) for yielding me this time.
  Mr. Chairman, I rise in opposition to this amendment, in opposition 
to my good friend the gentleman from Michigan (Mr. Conyers).
  This bill, the Bankruptcy Reform Act of 1999, includes a provision 
that addresses an injustice that exists within Title 11 of the United 
States Code regarding single asset bankruptcies. That is a big long 
statement.
  This provision mirrors legislation that I introduced in H.R. 624, and 
I want to thank the gentleman from Pennsylvania (Chairman Gekas) for 
his instructive help on that matter. This was done in the previous 
Congress and I thank him for including this in H.R. 833.
  Let me say what, in addition to what we have heard, is wrong with 
this amendment. The injustice within Title 11 stems from a last-minute 
decision that was made in the 103rd Congress, which placed an arbitrary 
$4 million ceiling on the single asset provisions of the bankruptcy 
reform bill. The effect has been to render investors helpless in 
foreclosure on single assets valued at over $4 million.
  H.R. 833 provides relief to victims by eliminating this arbitrary 
ceiling. Under this law, Chapter 11 of the Bankruptcy Code serves as a 
legal shield for the debtor. Upon the investors filing to foreclose, 
the debtor preemptively files for Chapter 11 protection, which 
postpones indefinitely foreclosure, while in Chapter 11 the debtor will 
continue to collect the rents on the commercial asset.
  Now listen to this. However, the commercial property will typically 
be left to deteriorate and the property taxes go unpaid. When the 
investor finally recovers the property through the delayed foreclosure, 
they owe an enormous amount in back taxes; they receive a commercial 
property left in deterioration which has a lower rent value and resale 
value, and meanwhile the rent for all the months or years they were 
trying to retain the property went to an uncollectable debtor.
  H.R. 833 does not leave the debtor without protection, however. 
First, the investor brings a foreclosure against a debtor only as a 
last result. This usually comes after all other efforts to reconcile 
delinquent mortgage payments have failed.
  Second, the debtor has up to 90 days to reorganize under a Chapter 
11. It should be noted, however, that single asset reorganizations are 
typically a false hope, since the owner of a single asset does not 
normally have other properties from which he can recapitalize his 
business.
  Mr. Chairman, I urge my colleagues to defeat the amendment offered by 
the gentleman from Michigan (Mr. Conyers), which could prohibit the 
single asset real estate definition from being applied in such case, 
which could result in the loss of five or more jobs. This amendment, if 
adopted, would effectively nullify the single asset protection 
currently in the code and allow Chapter 11 debtors to continue gaming 
the system by hiring new employees just before the filing.
  Make no mistake about it, this amendment, if approved, would allow 
unscrupulous debtors to drag out single asset cases for years to avoid 
meeting their financial obligations.
  Mr. Chairman, H.R. 833 restores personal responsibility to our 
bankruptcy laws; closes the loopholes, in addition, that allow 
individuals to game the system. I urge my colleagues on both sides of 
the aisle to oppose the Conyers amendment and vote ``yes'' on final 
passage.

                              {time}  1500

  Mr. GEKAS. Mr. Chairman, I yield such time as she may consume to the 
gentlewoman from Ohio (Ms. Pryce).
  Ms. PRYCE of Ohio. Mr. Chairman, I thank the gentleman for yielding 
me the time.
  Mr. Chairman, I rise in opposition to the amendment offered by the 
gentleman from Michigan (Mr. Conyers). By way of background, the great 
majority of commercial properties within the United States are owned by 
corporations, partnerships, and limited liability companies that only 
own one property. These are known as single-asset real estate entities.
  The typical single-asset real estate entity has only one major 
creditor, the mortgage lender that provided the financing for the 
acquisition of the property. In most cases, the mortgage lender's only 
remedy in the case of default is to take possession of the property 
through foreclosure.
  The recession of the late eighties and early 1990s caused a flood of 
Chapter 11 filings by single-asset real estate entities. In the typical 
case, the single-asset entity merely sought to stave off foreclosure 
and to use the bankruptcy process to force concessions from its 
mortgage lender. As a result, properties deteriorated and lenders 
suffered large losses as cases dragged on and on, sometimes for months 
and years.
  In the Bankruptcy Reform Act of 1994, Congress recognized that 
single-asset entities should receive expedited treatment in bankruptcy 
proceedings in order to protect properties from otherwise deteriorating 
during these lengthy bankruptcy proceedings.
  At that time, Congress amended the automatic stay provision of the 
Bankruptcy Code to provide that mortgage lenders may have the stay 
lifted and proceed with foreclosure, unless the single-asset debtor 
files a feasible reorganization plan within 90 days, or commences 
monthly interest payments to the lender. However, these provisions 
currently apply only to single-asset debtors whose property are valued 
at $4 million or less.
  Typically, when the owner of a building is bankrupt and the lender is 
allowed to foreclose, there is usually a net economic benefit to the 
property, because it is the goal of the lender to maximize the value of 
the property. A weak owner is replaced by a strong owner who has 
resources to make the repairs, attract new tenants, and effect capital 
improvements. This benefits our communities as well, including the 
generation of tax revenues.
  Moreover, by helping to keep the property commercially viable, we 
help ensure that the workers who maintain the building, from the 
janitors to the

[[Page H2714]]

engineers, will remain employed. Clearly, everybody benefits from 
keeping the property from deteriorating.
  Significantly, H.R. 833 would eliminate the arbitrary $4 million cap 
with respect to expedited foreclosures on these entities, so that all 
commercial properties, regardless of value, can be protected from 
deterioration during bankruptcy proceedings.
  However, the Conyers amendment would prohibit expedited foreclosure 
in any case where five employees of the property could be lost. As 
such, the Conyers amendment would not only gut the provision in H.R. 
833 which lifts the $4 million cap, but it would also, in effect, 
nullify existing expedited foreclosure provisions in the Bankruptcy 
Code.
  The Conyers amendment would recreate the uncertainty that the current 
law seeks to remedy. Bankruptcy courts could hold endless hearings on 
the application of this amendment and whether certain employees may or 
may not lose their jobs. Chapter 11 debtors could continue to game the 
system, as they have sometimes in the past, by hiring employees before 
filing, or delaying the bankruptcy action unfairly.
  Moreover, the very employees that the gentleman from Michigan (Mr. 
Conyers) seeks to protect would be worse off because new entities would 
be hampered in their efforts to take over the troubled property and 
return it to a going concern, and keep them employed.
  Mr. Chairman, I urge my colleagues to defeat the Conyers amendment, 
in the very interest of those he purports to protect.
  Mr. CONYERS. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, this is puzzling. It is one thing to tighten the 
bankruptcy rules on only the parties that are involved that are 
borrowing from the lender, but where the changes will harm innocent 
third parties, the employees and their families, I believe we have an 
obligation to give the business a reasonable chance to reorganize.
  The single-asset real estate provision, connected with the five-job 
requirement that the judge would look at, suppose it was the 
gentleman's job, I say to the gentleman from Pennsylvania (Mr. Gekas), 
one of the five. It would not be hard for a referee in bankruptcy or a 
judge in bankruptcy to make the decision.
  But what we are doing is saying that every single real estate 
concern, no matter how large its operation or how many jobs are at 
stake, be subject to expedited liquidation and bankruptcy. That is, 
within 90 days after filing, they can be subject to foreclosure by 
their creditors. Give us a break. All we are doing is giving additional 
discretion to the judge.
  I urge the Members on both sides of the aisle to support this modest 
amendment.
  Mr. Chairman I yield the balance of my time to the gentleman from New 
York (Mr. Nadler).
  The CHAIRMAN. The gentleman from New York (Mr. Nadler) is recognized 
for 1 minute.
  Mr. NADLER. Mr. Chairman, this amendment does two things. The 
gentleman from Michigan (Mr. Conyers) described the impact on the 
single-asset realty. But it does something else, and we did not hear 
from the other side why it is so terrible, what it does, or why they 
rejected it in committee and reject it now, having nothing to do with 
single-asset real estate.
  What this does is say to the judge, is to give the judge discretion. 
When looking at a small business bankruptcy, the judge would have 
discretion to say, if he finds that imposition of these new onerous 
filing requirements and deadlines was likely to push that business into 
liquidation and cost more than five jobs, instead of enabling the 
business to reorganize, he is given the discretion to say, never mind 
these new restrictions, these new onerous requirements, better the 
business shall survive and not lay off the workers.
  Why not let judges have that discretion? Why insist that small 
businesses have to go out of existence and lay off these people? Let 
the judge have discretion, if he makes a finding that imposition of 
these new restrictions would likely cause the business to go out of 
existence instead of reorganizing, getting on its feet and saving the 
jobs.
  This is an anti-jobs bill. This is a pro-jobs amendment. I do not 
understand the opposition to it.
  Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I ask the Members to vote no on this amendment. I 
repeat, we have taken great pains to solidify in our bill, the bill 
that is before us, those provisions having to do with small business 
that have found broad favor across the commercial world, to include the 
Justice Department, to include the advocate for the SBA and other 
organizations. I ask for a no vote.
  The CHAIRMAN. All time has expired.
  The question is on the amendment offered by the gentleman from 
Michigan (Mr. Conyers).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. CONYERS. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 158, further proceedings 
on the amendment offered by the gentleman from Michigan (Mr. Conyers) 
will be postponed.
  It is now in order to consider amendment No. 8 printed in House 
report 106-126.


         Amendment No. 8 Offered by Mr. Watt of North Carolina

  Mr. WATT of North Carolina. Mr. Chairman, I offer amendment No. 8, 
which is made in order under the rule.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 8 offered by Mr. Watt of North Carolina:
       Beginning on page 160, strike line 23 and all that follows 
     through line 2 on page 161.
       Page 162, strike lines 1 through 15, and insert the 
     following (and make such technical and conforming changes as 
     may be appropriate):
       ``(f) An individual debtor in a case under chapter 7 or 13 
     of this title shall file with the court at the request of any 
     party in interest--
       ``(1) 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 of relief;
       ``(3) any amendments to any of the tax returns, including 
     schedules or attachments, described in paragraph (1) or (2); 
     and

  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
North Carolina (Mr. Watt) and a Member opposed each will control 10 
minutes.
  The Chair recognizes the gentleman from North Carolina (Mr. Watt).
  Mr. WATT of North Carolina. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, this is a simple amendment, and hopefully it will not 
take the entire allotted time. This is an amendment that was offered in 
the Committee on the Judiciary, and the Committee on the Judiciary 
split evenly, so I am sure the chairman of the subcommittee has a 
position on it, but the Committee on the Judiciary itself has failed to 
express an opinion one way or another because it failed on a split 
vote. I believe the vote was 13 to 13.
  Mr. Chairman, this bill currently requires that every bankruptcy 
filer, no matter whether his filing is or is not contested, file at 
least 3 years' worth of tax returns with the court. In our subcommittee 
we had hearings, and the bankruptcy judges, bankruptcy trustees, every 
single witness who came agreed that requiring all of these tax returns 
to be filed simply creates a massive paperwork burden and expense to 
the bankruptcy system, and that this was not a good idea. These burdens 
are unnecessary.
  Credit industry finance studies, consumer advocacy group finance 
studies, all indicate that the number of abusive Chapter 7 bankruptcy 
filings are approximately 10 percent, at most, of the bankruptcy 
filings. They also indicate that the vast majority of bankruptcy 
filings are what they categorize as uncontested filings.
  So why are we requiring tax returns for 3 years to be filed with the 
bankruptcy court, when in the great majority of these cases there will 
not be any contest about it, there will not be any need for the tax 
returns? They will

[[Page H2715]]

simply sit there in a corner in the bankruptcy court, clutter up space, 
take up needed time and energy to move around from place to place. They 
are simply unneeded.
  So my amendment simply says, look, you do not have to file these 
returns unless some party in interest says, I want you to file the 
returns. If some party in interest, any party in interest in the 
bankruptcy wants the tax returns, all they have to do is file one 
sentence which says, I want the tax returns filed. They do not have to 
give a reason, there has to be no hearing, there does not have to be 
anything but one sentence saying, I want the tax returns of this filer 
filed, and that person would have to file them. And for some reason the 
author of this bill thinks that is terrible.
  Mr. Chairman, I think he is overreacting. What he has decided is that 
every person who files a bankruptcy petition is a bad person, and we 
are going to impose all these burdens on him.
  But Mr. Chairman, listen to what the Congressional Budget Office says 
about this provision. I quote: ``This section would require the 
Administrative Office of the U.S. courts to receive and retain the tax 
returns for the three most recent years preceding the commencement of 
the bankruptcy case for all Chapter 7 and Chapter 13 debtors, about 8 
million debtors over the 2000 to 2004 period. CBO estimates that 
appropriations of $34 million over the next 5 years would be required 
to store and provide access to over 20 million tax returns.''
  That is the Congressional Budget Office, who is telling the sponsor 
of this bill that because he thinks every filer in America of a 
bankruptcy petition is a bad person and ought to be subjected to this, 
even though nobody is ever going to look at most of these tax returns, 
he is willing to cost the taxpayers of America $34 million because he 
has this personal agenda that, I do not know, even Republican Members 
on the committee said, this is a bad idea. Even members of the 
Committee on Rules said, this is a bad idea. We support your amendment. 
That is how this amendment got made in order.
  Yet, we are taking up valuable legislative time arguing about 
something that is completely inconsistent with what the professed 
philosophy is, to save taxpayers' money and to do something that is 
valuable to the system of bankruptcy. This is a provision in the bill 
which is not needed.
  Mr. Chairman, I reserve the balance of my time.

                              {time}  1515

  Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
  It is amazing to me that we can be criticized for trying to bring 
into the bankruptcy world a sense of accountability, of discipline. 
What is wrong with asking an individual who approaches the bankruptcy 
court and says, I am in terrible shape; I need to have bankruptcy 
relief, what is wrong with asking that individual to prove at the 
outset or to demonstrate at least prima facie what those financial 
circumstances are? That is a common sense requirement in most of the 
proceedings and most of the cases that we have of every conceivable 
kind in the court system of our country.
  So here we have an individual who says, my income cannot match, 
cannot meet the debts that have fallen upon me. So we tell that 
individual to come to the bankruptcy court, to file for discharge of 
their obligations, to bring their income tax returns so they can show 
right away, to the lawyer who is helping them or to the bankruptcy 
court which will ultimately receive them, what their stream of income 
has been and what can be perceived as forecasting what income they will 
have in the next year or so beyond the aegis of the bankruptcy court.
  That allows a couple of things to happen. Number one, it will allow 
many times, in our judgment, right at the outset, that the debtor and 
his counselor or bankruptcy adviser will come to the conclusion that he 
may not fare well in the bankruptcy court. The income stream that the 
individual has, together with the expenses that are matched against it, 
they might find that they would be rejected in bankruptcy. So maybe it 
would be better to wait a while, try to work out some of these debts 
and then decide later whether or not bankruptcy should be approached. 
That is a commonsense, valuable, preliminary finding for the debtor to 
make with his counselor.
  We believe that that is helpful. That brings accountability, personal 
responsibility, and a sense of stability to the system, and may prevent 
countless individuals from filing bankruptcy where before all they had 
to say was, as is the system now, I am bankrupt, I do not have any 
income, and so forth. And when asked how much they make; well, they do 
not want to be asked those questions. They may say, I think I am making 
$85 a week, or whatever calculation that the debtor asserts then 
becomes the basis of his asking for bankruptcy relief. Well, that is 
wrong.
  And furthermore, if we should rely on what the gentleman from North 
Carolina says, to ask someone or embed in the law the requirement that 
a tax return be requested and that that should be granted 
automatically, first of all, it would allow that system itself to be 
gamed by some.
  For instance, if I am a debtor, ready to approach the filing of 
bankruptcy, and my counselor tells me that I may or may not be asked 
for an income tax return once I file, if the amendment were carried, 
the debtor might say, well, I will take that chance. And if the request 
is not made for the tax return, he glides on his merry way towards a 
discharge in bankruptcy. If the trustee or the bankruptcy court asks 
for the tax return, he still has the option to drop out of the 
bankruptcy filing. So, in a way, we have an uncertain system at hand 
under the Watt amendment.
  I am not ready to vouch for the inevitability that mountains of paper 
will be piled on top of the paper that has already been filed. I 
believe that with the electronic systems that are at hand, that it may 
be after the first filing of the 3 years of income tax returns, that 
almost forthwith they would be returned to the bankrupt filer while the 
system goes on with an electronic recordation of the data in that 
income tax return. So I see some relief even in the paperwork that 
might not otherwise be seen. We all agree that the increased technology 
is helping these kinds of systems all along.
  The other important feature here is that I take it from the offering 
by the gentleman from North Carolina that the gentleman intends to vote 
against the Nadler substitute which is coming, because as one of the 
debtor's duties that even the gentleman from New York recognizes and 
applauds and includes in his version of bankruptcy reform is the filing 
of tax returns from the previous 3 years for anyone who dares to enter 
the bankruptcy courts asking for relief.
  The commonsense requirement that a person seeking the help of the 
court provide all the information necessary for the court to determine 
the real status of that individual is a commonsense precept of our law, 
and we should not have any court rely only on the word or the 
assertions of the person who wants relief without the evidence that 
will make it a more stable set of provisions.
  Mr. Chairman, I reserve the balance of my time.
  Mr. WATT of North Carolina. Mr. Chairman, how much time remains?
  The CHAIRMAN. Both Members have 3\1/2\ minutes remaining.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 1 minute to the 
gentleman from Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  I wish to say to the gentleman from Pennsylvania, Mr. Chairman, that 
apparently the Congressional Budget Office did not see the savings that 
the gentleman envisions in this, and the gentleman has been here long 
enough to remember the Paperwork Reduction Act. Whatever happened to 
that?
  Here, if the gentleman were to examine the proceedings in any 
bankruptcy court, he would quickly know that the court can demand an 
income tax return, and certainly any party in interest is not about to 
forget to bring that in to the proceeding if there is any slight notice 
that he needs it. So what the gentleman from North Carolina is doing is 
merely making this optional to anybody that wants it, and here the 
gentleman from Pennsylvania is resisting it.
  If a Federal agency tried to promulgate this rule, the gentleman from

[[Page H2716]]

Pennsylvania would be leading the Congress in demanding to know why 
they want such unnecessary authority. So, please, let us improve the 
bill to at least this minor amount.
  Mr. GEKAS. Mr. Chairman, I yield the balance of my time to the 
gentleman from Florida (Mr. Foley).
  Mr. FOLEY. Mr. Chairman, I want to thank the gentleman from 
Pennsylvania (Mr. Gekas) for his hard work on this vitally important 
bill and on the series of amendments we have been debating today. 
Clearly, we want to make certain that people pay their debts. Having 
been a commercial realtor and involved in the business of real estate 
and restaurants and different things, certainly I understand when 
people have trouble in society.
  The one provision sponsored by the gentleman from North Carolina that 
would make a tax return subject to the presentation of one of the 
parties interested in asking for it I think strikes at what we should 
be trying to accomplish in the bill. Having a tax form as a requirement 
of a bankruptcy petition will, in fact, give the courts and all 
interested parties a chance to review the assets of the individual, at 
least the income of the individual, and whether in fact they can make 
due their debts to society. I think it is an important and fundamental 
thing that occur at the very, very beginning of a bankruptcy hearing. I 
think the court should be able to review in fact that they have income 
to satisfy their debts.
  It seems time and time again I am reading about somebody who struck 
it rich and won the lottery, but somehow, because of the foolish 
management of their own money, they leave a lot of creditors out in the 
lurch. I would like to see some of those tax returns, and I would like 
to see the income from those lottery proceeds, and I think the court is 
entitled to them.
  I think then to go and require one of the aggrieved parties to step 
forward and say, judge, I would like to petition to have a tax return 
submitted for the record so we can at least look to see if the income 
is there to satisfy the debts, is only going to encumber the process. 
It will drag it out. The debtor may say, well, I do not know where my 
copies are; well, let me see if I can get them; well, I may have to 
acquire them through the IRS to get copies back to make a presentation 
to the court, simply looking to delay and obfuscate the problem.
  I want to speak for a moment on the amendment offered by the 
gentleman from Michigan (Mr. Conyers) on the job requirements.
  Mr. WATT of North Carolina. Mr. Chairman, will the gentleman yield?
  Mr. FOLEY. I yield to the gentleman from North Carolina.
  Mr. WATT of North Carolina. Mr. Chairman, the gentleman is aware, of 
course, that that possibility that he just mentioned exists under the 
underlying bill. If somebody does not have the tax returns, they can 
still come in, in an emergency situation, and have the same kind of 
argument.
  And there is no hearing required under my amendment. I do not know 
which amendment the gentleman is debating. All someone has to do is 
file one sentence saying, I would like to have the tax returns. This is 
not about not filing the tax returns.
  I agree with the gentleman. There are a lot of cases where the tax 
returns are needed, and I am not trying to impede that. I am just 
trying to keep mountains and mountains of paper from stacking up in the 
bankruptcy court.
  Mr. FOLEY. Reclaiming my time, Mr. Chairman, I think that is a 
mountain of paperwork we desperately need to see. We need to see the 
facts. We need to see the proof in the pudding of what the income of 
the gentleman or gentlewoman was as they are making their claims to the 
courts. I think absent that information the courts have very little to 
base whether in fact this is a viable bankruptcy petition filed.
  These are the types of things that will strengthen the law; so that 
all things that are material are filed accurately in the court and we 
are not waiting until we have delay after delay after delay.
  So I again strongly urge the Congress to reject the amendment and 
proceed to support the underlying bill to bring some semblance of 
reasonableness to the Bankruptcy Reform Act of 1999.
  Mr. GEKAS. Mr. Chairman, I yield back the balance of my time.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 1 minute to the 
gentleman from New York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, this is a simply silly provision and does 
not, frankly, deserve the attention it is being paid on the floor 
today.
  Why should we not waste $34 million of the taxpayers' money for no 
purpose at all, the gentleman from Pennsylvania asks? My answer is 
because it is $34 million of the taxpayers' money.
  There are no hearings here. Anyone who practices bankruptcy knows 
that in a vast number of cases it is open and shut. Everybody knows 
what is going on. There are no assets, very little income, no one has 
any desire to see the tax forms. Anyone, any creditor, the judge, 
anybody who wants to see the tax form, a one-sentence request suffices.
  All that not passing the amendment of the gentleman from North 
Carolina will do will be to waste $34 million of the taxpayers' money 
in order to pile up tax forms in court that no one will read.
  Sure, there are many cases where we may want to see what the assets 
are, what the income is, whether the bankruptcy makes sense or not, 
whether it meets the requirements of the law. All anyone has to do is 
ask, and someone will ask, and those are the complicated ones. But for 
those where there is no question, why require the court, as is not now 
required, to bury itself under a mountain of paper for no other purpose 
than to waste the taxpayers' money?
  Mr. WATT of North Carolina. Mr. Chairman, how much time remains?
  The CHAIRMAN. The gentleman from North Carolina (Mr. Watt) has 1\1/2\ 
minutes remaining.
  Mr. WATT of North Carolina. Mr. Chairman, I yield myself the balance 
of my time.
  Mr. Chairman, let me just very quietly and calmly explain to the 
gentleman from Pennsylvania (Mr. Gekas) and the gentleman from Florida 
(Mr. Foley) that I agree with them. There are a number of cases where 
tax returns are necessary in the bankruptcy court. But there are just 
as many cases where tax returns are unnecessary in the bankruptcy 
court; where no issue exists in the case, no argument about whether the 
person is bankrupt, nothing to be gained by having somebody bring in a 
stack of papers of 3 years' worth of tax returns other than that they 
will stack up in the corner and sit there and the taxpayers of America 
will have to pay the storage cost on that.
  This whole notion that the gentleman has put together, that every 
single person ought to come in with a tax return, is just the gentleman 
boxing with a shadow. This is not evidence unless somebody wants it to 
be evidence; unless it is relevant to a determination of the outcome of 
the case. And all that is required under my amendment to get that tax 
return is a one-sentence statement saying I need the tax return. No 
reasons, nothing.

                              {time}  1530

  Please save the taxpayers $34 million and vote for this amendment.
  The CHAIRMAN (Mr. Nethercutt). All time has expired.
  The question is on the amendment offered by the gentleman from North 
Carolina (Mr. Watt).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. WATT of North Carolina. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 158, further proceedings 
on the amendment offered by the gentleman from North Carolina (Mr. 
Watt) will be postponed.
  It is now in order to consider amendment No. 9 printed in House 
Report 106-126.


                Amendment No. 9 offered by Mr. Whitfield

  Mr. WHITFIELD. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 9 offered by Mr. Whitfield:
       Page 176, after line 24, insert the following:

     SEC. 614. COMPENSATING TRUSTEES.

       Title 11, United States Code, is amended--
       (1) in section 104(b)(1) in the material preceding 
     subparagraph (A)--
       (A) by striking ``and''; and
       (B) by inserting ``, 1326(b)(3)'' before ``immediately'';

[[Page H2717]]

       (2) in section 326, by inserting at the end the following:
       ``(e) Notwithstanding any other provision of this section, 
     the court shall allow reasonable compensation under section 
     330(a) of this title for the services and expenses of the 
     trustee in taking the actions described in paragraphs (1) and 
     (2) if--
       ``(1) a trustee in a chapter 7 case commences a motion to 
     dismiss or convert under section 707(b) and such motion is 
     granted; or
       ``(2) the trustee demonstrates by a preponderance of the 
     evidence that the case was converted or dismissed because of 
     the trustee's actions.''; and
       (3) in section 1326(b)--
       (A) in paragraph (1), by striking ``and'';
       (B) in paragraph (2), by striking the period at the end 
     thereof and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(3)(A) the amount of the compensation described in 
     subclauses (I) and (II) which is unpaid at the time of each 
     such payment, prorated over the remaining duration of the 
     plan--
       ``(i) and which has been allowed in a case--
       ``(I) converted to this chapter; or
       ``(II) dismissed from chapter 7 in which the debtor in this 
     case was a debtor, whether dismissed voluntarily by the 
     debtor or on motion of the trustee under section 707(b);
       ``(ii) but only to the extent such compensation has been 
     allowed to a chapter 7 trustee under section 326(e);
       ``(B) the compensation payable to the chapter 7 trustee in 
     the case under this chapter shall not exceed the greater of 
     the trustee fee allowed pursuant to section 330 of this title 
     plus--
       ``(i) $25 per month; or
       ``(ii) the amount payable to unsecured nonpriority 
     creditors as provided by the plan multiplied by 5 percent, 
     and the result divided by the number of months in the plan; 
     and
       ``(C) notwithstanding any other provision of this title, 
     any such compensation awarded to a chapter 7 trustee in a 
     converted or dismissed case shall be payable and may be 
     collected in a case under this chapter--
       ``(i) even if such amount has been discharged in a prior 
     proceeding under this title; and
       ``(ii) only to the extent permitted by this section.''.

  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
Kentucky (Mr. Whitfield) and a Member opposed each will control 10 
minutes.
  The Chair recognizes the gentleman from Kentucky (Mr. Whitfield).
  Mr. WHITFIELD. Mr. Chairman, I yield myself such time as I may 
consume.
  First of all, I would like to certainly thank and congratulate the 
leadership of the gentleman from Pennsylvania (Mr. Gekas) on this 
important legislation, as well as that of the gentlemen from Michigan 
and New York, for the hard work that they have put in on this 
legislation, as well as that of their staffs. It is very important 
legislation to reform the bankruptcy laws and to bring it up to date.
  This amendment that I have, Mr. Chairman, is an amendment really 
about basic fairness; and that is, this legislation requires trustees 
to do some additional tasks, some additional work, and to simply 
provide them an opportunity to be compensated for that work.
  Specifically, it provides the opportunity for the trustees to be 
compensated for the additional responsibilities they must perform 
pursuant to the terms of H.R. 833.
  Under this bill, trustees must comply with new duties, clarifying 
which debtors truly need the relief provided by Chapter 7 and whether 
those debtors should be converted to the Chapter 13 payment plan. 
However, despite those additional duties, there are no provisions 
compensating the trustees or even giving them the opportunity to be 
compensated for the additional functions.
  This amendment will allow the court or the bankruptcy judge to award 
a reasonable fee for trustees' actions resulting in a case being 
converted from Chapter 7 to Chapter 13.
  In addition, in order to avoid overburdening debtors and reducing the 
effect this fee would have on the distribution to any creditors, this 
fee will be paid monthly over the life of the Chapter 13 plan.
  It is only fair that individuals have the opportunity to be 
compensated for additional work performed. Therefore, Mr. Chairman, I 
would request that this amendment be accepted.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I rise in opposition to the amendment, and 
I yield myself such time as I may consume.
  Mr. Chairman, I think that we can accept this amendment. This is a 
provision that we think will be helpful. We want to make sure that, 
whatever fees, that that would come out of the debtor's assets so that 
that would not be something else he would have to confront.
  Mr. Chairman, I yield to the gentleman from Kentucky (Mr. Whitfield).
  Mr. WHITFIELD. Mr. Chairman, that is my understanding; that is the 
intent.
  Mr. CONYERS. Mr. Chairman, under those circumstances, we approve of 
the amendment; and I yield back the balance of my time.
  Mr. WHITFIELD. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I thank the gentleman from Michigan (Mr. Conyers) for 
his support on this amendment.
  Mr. Chairman, I yield the balance of my time to the gentleman from 
Pennsylvania (Mr. Gekas).
  Mr. GEKAS. Mr. Chairman, I thank the gentleman for yielding me the 
time.
  I want to indicate, for the record, and to urge the Members that we 
support this amendment and that it goes to some of the dependability 
and predictability that we are trying to build into the revised 
Bankruptcy Code. So the gentleman comes to the Chamber with an 
amendment that is worthy of the support of all the Members.
  Mr. WHITFIELD. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time has expired.
  The question is on the amendment offered by the gentleman from 
Kentucky (Mr. Whitfield).
  The amendment was agreed to.
  Mr. MANZULLO. Mr. Chairman, I ask unanimous consent to speak for 1 
minute on the Watt amendment.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Illinois?
  There was no objection.
  Mr. MANZULLO. Mr. Chairman, I was listening to the debate in my 
office on the Watt amendment, which would simply say that whenever the 
trustee or any party or any attorney requests a copy of the tax returns 
that that would be turned over, as opposed to having a mandatory 
provision requiring the filing of tax returns with a bankruptcy 
petition.
  When I practiced law, I probably had somewhere between 300 and 500 
bankruptcy petitions representing petitioners, debtors and also 
creditors. And if we are going to require, under the present main text 
of this bill, the filing of tax returns, we are going to have to pass 
an appropriation to increase the size of the Federal courthouses in 
order to hold all the paperwork.
  So I speak in favor of the Watt amendment, if the tax return is 
requested by any party, that it could be turned over, as opposed to 
putting additional paperwork into every single bankruptcy petition that 
is filed.
  The CHAIRMAN. It is now in order to consider amendment No. 10 printed 
in House Report 106-126.


                  Amendment No. 10 Offered by Mr. Hyde

  Mr. HYDE. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 10 offered by Mr. Hyde:
       Page 8, beginning on line 14, strike ``(which'' and all 
     that follows through ``104(b))'' on line 19.
       Beginning on page 8, strike line 23, and all that follows 
     through line 13 on page 9, and insert the following (and make 
     such technical and conforming changes as may be appropriate):
       ``(ii) The debtor's monthly expenses shall be the debtor's 
     monthly expenses reasonably necessary to be expended--
       ``(I) for the maintenance or support of the debtor, the 
     dependents of the debtor, and, in a joint case, the spouse of 
     the debtor if the spouse is not otherwise a dependent; and
       ``(II) if the debtor is engaged in business, for the 
     payment of expenditures necessary for the continuation, 
     preservation, and operation of such business.

     Notwithstanding any other provision of this clause, the 
     debtor's monthly expenses shall not include any payments for 
     debts described in clauses (iii) and (iv).
       
       Page 14, line 15, add close quotation marks and a period at 
     the end.
       Beginning on page 14, strike line 16 and all that follows 
     through line 3 on page 15.
       Page 101, after line 9, insert the following (and make such 
     technical and conforming changes as may be appropriate):

[[Page H2718]]

     SEC. 154. GUIDELINES FOR ASSESSING INCOME.

       Section 586 of title 28, United States Code, is amended by 
     adding at the end the following:
       ``(f) Not later than 1 year after the effective date of 
     this subsection, the Director of the Executive Office for 
     United States Trustees shall issue guidelines to assist in 
     making assessments of whether income is not reasonably 
     necessary to be expended by a debtor for the maintenance or 
     support of the debtor, the dependents of the debtor, and, in 
     a joint case, the spouse of the debtor if the spouse is not 
     otherwise a dependent.''.
       Page 153, line 23, insert ``as amended by section 154,'' 
     after ``Code,''.
       Page 154, line 3, strike ``(f)'' and insert ``(g)''.
       Page 154, line 5, strike ``(f)(1)(A)'' and insert 
     ``(g)(1)(A)''.
       Page 156, line 22, strike ``586(f)'' and insert ``586(g)''.
       Page 157, line 4, strike ``586(f)'' and insert ``586(g)''.

  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
Illinois (Mr. Hyde) and the gentleman from Pennsylvania (Mr. Gekas) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Illinois (Mr. Hyde).
  Mr. HYDE. Mr. Chairman, I yield half my time to the gentleman from 
Michigan (Mr. Conyers), and I ask unanimous consent that he may control 
that time.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Illinois?
  There was no objection.
  Mr. HYDE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I am pleased to speak in support of an amendment that I 
am offering, together with the gentleman from Michigan (Mr. Conyers), 
that relates to permissible living expenses of debtors and their 
families. It replaces the bill's reliance on Internal Revenue Service 
expense allowances and instead incorporates a test based on the 
disposable income standard of current law, namely, whether income is 
reasonably necessary for maintenance or support.
  To enhance predictability, the amendment requires the Director of the 
Executive Office for United States Trustees to issue guidelines that 
will be considered in the application of the ``reasonably necessary'' 
standard.
  Before discussing our proposed amendment relating to living expenses, 
I want to emphasize, and I mean ``emphasize,'' that various pro-
creditor enhancements in Section 102, the relevant section of the bill, 
are unaffected by this amendment. These enhancements greatly expand the 
potential for utilizing Bankruptcy Code Section 707(b) to remove cases 
from Chapter 7 of the Bankruptcy Code, where a debtor can receive a 
limited discharge of obligations in return for giving up nonexempt 
assets.
  By recent count, there are a dozen pro-creditor enhancements in 
Section 102 that my amendment leaves in place and 63 creditor-friendly 
reforms in other sections of the bill. Believe me, we can enact 
legislation that is highly favorable to creditors without depriving 
debtors and their families of ``reasonably necessary'' living expenses.
  This bill effectuates a major shift in bankruptcy policy, a change in 
direction that necessitates focusing on what portion of a debtor's 
future income will be available to meet the requirements of daily 
living. For the last century, individual debtors generally have been 
able to receive an immediate financial fresh start without having to 
encumber their future incomes. By greatly increasing the potential for 
dismissing Chapter 7 liquidation cases, this bill channels many debtors 
into 5-year Chapter 13 repayment plans.
  What will debtors, their spouses, and children be able to live on 
during long repayment periods? This bill says, in effect, that debtors 
and their families must adhere to a somewhat modified version of 
expense allowances formulated within the Internal Revenue Service to 
facilitate compromises with delinquent taxpayers. This model is 
inappropriate for imposition in bankruptcy because, firstly, the 
successful collection of taxes is a matter of national self-
preservation; and, secondly, the creditors can minimize the risk of 
losses by adhering to prudent creditor practices.
  I do not think it is a particularly Republican idea to advance the 
IRS living standards. Recently, Congress gave legislative expression to 
the need for flexibility in the application of IRS expense allowances 
with the IRS to determine the appropriateness of applying the schedules 
to individual taxpayers. It would be particularly anomalous for this 
body to disregard the IRS Restructuring Act of 1998 and mandate an 
application of IRS expense allowances in bankruptcy cases that is more 
rigid and inflexible than what IRS itself does in the context of 
accepting compromises of tax obligations.
  Professor Jack Williams of Georgia State University School of Law, 
who chaired the National Bankruptcy Review Commission's Tax Advisory 
Committee, pointed out to us that tying debtor eligibility to a formula 
that the IRS deviates from on a regular basis makes no sense. He 
described the IRS collections standards as too parsimonious and said 
the standards are unrealistic.
  The limited effort to modify the IRS expense allowances during our 
markup by including a potential add-on for food and clothing only of up 
to 5 percent and providing for continuation of private school expenses 
failed to solve major problems with the incorporation of IRS schedules 
into our bankruptcy law.
  Allowances for food are included in the IRS National Standards which 
apply throughout the contiguous 48 States and do not reflect differing 
costs from one region to another. In addition, allowable expenses for 
food under IRS schedules increase dramatically with increases in 
income.
  The broader problem, of course, is the bill does not even make an 
attempt to address problems with IRS allowances unrelated to food, 
clothing, and education.
  Leading national organizations with bankruptcy related expertise and 
credibility recognize the need to replace the IRS expense allowances in 
this bill. I am speaking of the Commercial Law League of America. They 
have written us favorably.
  Judge Randal Newsome, President of the National Conference of 
Bankruptcy Judges, has said that, ``On behalf of the 319 members of the 
National Conference of Bankruptcy Judges, I firmly believe your 
amendment would lead to a far less complex and far more workable needs-
based bankruptcy system than one which attempts to incorporate IRS 
expense standards.''
  An unfortunate consequence of applying IRS living allowances in 
bankruptcy cases is to penalize some family members because they live 
with the debtor and cannot benefit from a support order.
  The bill includes protections for the beneficiaries of support orders 
issued by family courts, courts that are not constrained by the living 
allowances the IRS seeks to impose on delinquent taxpayers.
  Mr. Chairman, this is simple. What are they going to live on while 
they are playing out the 5 years that they have to play out paying 
their bills, paying their debts under Chapter 13?
  The bill wants to use the IRS living standards. I want to replace 
them with the reasonably necessary standard, which is the current law. 
This bill has over 75 creditor enhancements. And to say if my amendment 
passes this is a deal breaker, that kills the bill, is ludicrous. There 
is so much in here for the creditors they ought to grab it and run.

                              {time}  1545

  It just seems to me a little humanity, a little flexibility, a little 
reasonableness in working out the living standards, the rules by which 
you are going to live on while you are working out your Chapter 13 
obligations, is appropriate.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GEKAS. Mr. Chairman, I yield such time as he may consume to the 
gentleman from Texas (Mr. Armey), the majority leader.
  Mr. ARMEY. I thank the gentleman for yielding me this time. I will be 
brief.
  Mr. Chairman, let me say, first of all, I do not think it is any 
secret around here the high esteem with which I hold the gentleman from 
Illinois (Mr. Hyde). The gentleman from Illinois is one of my heroes 
and a close personal friend. It pains me to find myself ever in 
disagreement with a gentleman I admire so much, but I could not be more 
in disagreement with the gentleman from Illinois on this point than I 
am.
  Mr. Chairman, for years we have labored here, watching bills come and 
bills go, markups come and markups

[[Page H2719]]

go, legislation pass through the floor. For all those years what I have 
looked to is for the Congress to act in such a way as to exercise the 
legislative discipline in the way the law is written, to write in an 
acceptable objective standard so that anybody that comes under the 
jurisdiction of the law will know in fact the rules of the game when 
they enter the courtroom.
  For too many years, what we have done is we have written law in this 
body to leave things at a subjective level and to the discretion of the 
court, that for too many times and too many pieces of legislation have 
resulted in excessively drawn out cases under the law where in fact the 
law was written on an ad hoc basis, in the courtroom, by the court. 
Many of us who believe so much in judicial constructionism have 
bemoaned that liberalism in the courts.
  This legislation as it comes to the floor has a good, acceptable, 
reasonable and I believe necessary objective standard. The Hyde-Conyers 
amendment would remove that and would leave us again to the vagaries of 
judgments in the courts and all that go with it.
  No, I think at this point we must practice legislative discipline. We 
must write the law as Congress intends the law. And we must give 
everybody who would enter the courtroom under the jurisdiction of the 
law a clear understanding of what the law is and what are the rules of 
the game and what are the compliances required going into it.
  I implore all of us to vote against this amendment, uphold clear, 
defined standards under the law. Let this legislation go forward as it 
does, as it is brought to the floor, as legislation that once again 
will connect freedom and responsibility in financial dealings as a 
message before all our families.
  We all teach these lessons to our children about accepting your 
responsibilities and fulfilling your responsibilities. Let the 
bankruptcy laws of this great land be a complement to the teachings we 
give our children and an encouragement to that, and let our children 
know the standards of compliance that are expected of them under the 
law. Let us not leave that to the whim of a judicial proceeding.
  Mr. CONYERS. Mr. Chairman, I yield myself 5 minutes.
  May I make it clear to my colleagues that there is no other amendment 
that I support stronger than this one with the gentleman from Illinois 
(Mr. Hyde), deleting provisions in the bill that would impose the sort 
of one-size-fits-all standard for the income and expense test based on 
IRS standards to determine who is eligible for bankruptcy relief and 
how much they are required to pay their creditors. I am appalled with 
the thought of using IRS expense standards.
  First, the IRS standards do not protect a debtor's ability to pay for 
health care, for elderly, care for the elderly, taxes, accounting or 
legal fees. Now, an IRS standard like this has the effect of requiring 
the payment of unsecured credit card debt before allowing for payment 
of these important family-friendly items.
  In the second place, where the IRS does allow specific expense items, 
the permitted amounts are often inhumanely inadequate. For example, the 
permitted automobile expense in the San Francisco Bay area for two cars 
is $373 per month, even though most families could barely cover the 
cost of automobile insurance, let alone car payments, gasoline, tolls 
and other items of expense.
  Question: How can we expect people to keep their jobs if we do not 
provide them with enough money for transportation to get to work?
  Number three, the IRS standards have a severe bias against renters 
and other debtors without secured debts. This is because the bill 
allows all secured debt payments to be deducted from monthly income but 
limits rental and lease payments to the amount permitted by the IRS 
standards. This means that the person renting apartments or leasing 
cars may not be able to deduct the full amount of their housing and 
transportation cost in bankruptcy, while persons with mortgages and 
automobile debt would be able to do so. There is no legitimate policy 
rationale for this discrepancy which punishes persons who try to live 
within their means.
  I have just a few letters that I will shortly put in the Record. From 
the American Federation of State, County and Municipal Employees we 
have a strong letter arguing against the means test. From the American 
Federation of Labor, we have a legislative alert that says imposing an 
unworkable and unfair means test on families seeking to obtain a fresh 
start under Chapter 7 is to be avoided. We also have a letter from the 
United Automobile Workers of America, who are particularly disturbed by 
the up-front arbitrary means test that would unfairly bar many working 
families from being able to obtain a fresh start under Chapter 7.
  Mr. Chairman, this is probably the touchstone of this whole bill. If 
we could move to this agreement to accept this joint amendment, we may 
be able to save this bill from being turned down in the administration. 
I am urging the Members to give this their consideration and ultimately 
their support.
  Mr. Chairman, I include the following material for the Record:
         American Federation of State, County and Municipal 
           Employees, AFL-CIO,
                                   Washington, DC, April 19, 1999.
       Dear Representative: On behalf of 1.3 million members of 
     the American Federation of State, County and Municipal 
     Employees (AFSCME), I am writing concerning the scheduled 
     mark up of the Bankruptcy Reform Act of 1999 (H.R. 833). We 
     urge you to oppose H.R. 833 because it represents one-sided 
     legislation that elevates the interests of banks and credit 
     card companies above the interests of working men and women.
       Many hard-working American families find themselves in 
     unfortunate financial positions due to circumstances beyond 
     their control. These families typically struggle with their 
     debts for substantial periods of time. They work extra hours 
     at multiple jobs, or borrow money from their relatives and 
     friends. They try to avoid bankruptcy to protect their homes 
     and save their credit ratings. But these efforts often fail, 
     especially when the creditors refuse to give them a second 
     chance that they desperately need.
       H.R. 833 contains numerous provisions that will allow 
     creditors, particularly the credit card industry, to unfairly 
     burden or harass working families. Of particular concern is 
     the ``means test'' that would unfairly bar many working 
     families from being able to obtain a fresh start under 
     Chapter 7.
       There is no economic evidence to suggest that the profiles 
     of families in Chapter 7 have improved since last year's 
     Conference Report was published. During the debate over the 
     bankruptcy legislation last year, much evidence was presented 
     to the contrary; families in Chapter 7, on average, are worse 
     off today than in the past. There is also no evidence that 
     these families are abusing the system.
       AFSCME supports balanced bankruptcy reform, but this bill 
     departs from the bipartisan version of reform which cleared 
     the Senate floor last fall. We again urge you to vote against 
     H.R. 833.
           Sincerely,
                                              Charles M. Loveless,
     Director of Legislation.
                                  ____

         American Federation of Labor and Congress of Industrial 
           Organizations,
                                   Washington, DC, April 20, 1999.
     Hon. Henry J. Hyde,
     Chairman, House Committee on the Judiciary, Washington, DC.
       Dear Mr. Chairman: This week the House is scheduled to take 
     up H.R. 833, the Bankruptcy Reform Act of 1999. The AFL-CIO 
     is opposed to this radical legislation. It will harm working 
     families and weaken a vital safety net protecting small 
     businesses and jobs in times of economic downturn.
       Specifically, the AFL-CIO opposes provisions in the bill 
     that:
       Threaten jobs by placing substantial procedural and 
     substantive barriers in the way of small businesses' access 
     to the protections of Chapter 11;
       Threaten jobs by broadening the scope of signal asset real 
     estate debtors subject to rules which increase the threat of 
     disruptive summary foreclosures of commercial property;
       Threaten jobs by requiring commercial debtors to assume or 
     reject commercial leases within a rigid timetable, which 
     would force debtors to favor one class of creditors over 
     others, and threaten their overall ability to successfully 
     reorganize.
       Impose an unworkable and unfair ``means'' test on families 
     seeking to obtain a fresh start under Chapter 7;
       Impose burdensome, bureaucratic requirements on consumer 
     debtors that could result in the arbitrary dismissal of many 
     bankruptcy petitions, even when there is no abuse and working 
     families genuinely need relief; and
       Place severe, punitive restrictions on repeat consumer 
     filings.
       The current bankruptcy system is the result of decades of 
     thoughtful, careful bi-partisan legislative efforts, designed 
     to balance the interests of creditors, debots and the nation 
     as a whole. Working families and their unions participate in 
     this system as debtors, creditors and employees of both 
     debtors and creditors. We have much to lose if this system 
     becomes unbalanced or damaged by hasty and poorly thought-out 
     changes.

[[Page H2720]]

       But the real danger posed by H.R. 833 is the threat it 
     poses to our economy's ability to weather downturns. The bill 
     aims to make access to the bankruptcy process more difficult 
     for our economy's most vulnerable links--small businesses and 
     consumers. This will likely result in increased business 
     closures, job loss and home foreclosure, increasing the 
     severity and length of any future economic downturn. It does 
     so in the face of academic data showing that consumers filing 
     bankruptcy are overwhelmingly working families who have 
     experienced a catastrophic event--families whose median 
     income is less than $18,000.
       H.R. 833 threatens jobs and tilts the playing field against 
     working families and small businesses. We urge the Senate to 
     reject the harsh and ill-considered proposals embodied in the 
     current text of H.R. 833.
           Sincerely,
                                                     Peggy Taylor,
     Director, Department of Legislation.
                                  ____

         International Union, United Automobile, Aerospace & 
           Agricultural Implement Workers of America--UAW
                                   Washington, DC, April 28, 1999.
       Dear Representative: This week the House is scheduled to 
     vote on H.R. 833, the Bankruptcy Reform Act of 1999. This 
     bill incorporates the Conference Report on the bankruptcy 
     legislation in the last Congress. The UAW opposed that 
     Conference Report, and we urge you to oppose H.R. 833, 
     because they represent one sided legislation that elevates 
     the interests of banks and credit card companies above the 
     interests of working men and women.
       Many hard-working American families find themselves in 
     unfortunate financial positions due to circumstances beyond 
     their control. Layoffs, divorce and medical crisis can 
     quickly introduce financial instability into the lives of 
     workers and their families. These families typically struggle 
     with their debts for substantial periods of time. They work 
     extra hours and multiple jobs, or borrow money from their 
     relatives and friends. They try to avoid bankruptcy to 
     protect their homes and save their credit rating. But these 
     efforts often fail, especially when creditors refuse to give 
     them a second chance that they desperately need.
       Like last year's Conference Report, H.R. 833 contains 
     numerous provisions that will allow creditors, particularly 
     the credit card industry, to unfairly burden or harass 
     working families. We are particularly disturbed with its up-
     front, arbitrary ``means test'' that would unfairly bar many 
     working families from being able to obtain a fresh start 
     under Chapter 7. This concern is shared by Judiciary Chairman 
     Hyde, as demonstrated by the series of amendments he offered 
     to overcome the arbitrary and unfair effects of using IRS 
     standards in the means test and to allow bankruptcy judges 
     more discretion over the outcome. Unfortunately, these 
     amendments were rejected by the Committee.
       There is no economic evidence to suggest that the profiles 
     of families in Chapter 7 have improved since the Conference 
     Report was published. Indeed, during the course of the debate 
     over the bankruptcy legislation last year, much evidence was 
     presented to the contrary; families in Chapter 7, on average, 
     are worse off today than the past. There is also no objective 
     evidence that these families are abusing the system. Despite 
     credit industry claims to the contrary, a recent study 
     commissioned by the American Bankruptcy Institute found that 
     only 3 percent of Chapter 7 filers could afford to repay some 
     portion of their debt--a finding that was also confirmed by 
     the U.S. Trustee's office.
       The UAW is also deeply concerned that H.R. 833 contains 
     only watered-down consumer ``protections''. For example, it 
     would not provide for meaningful disclosure about the 
     consequences of making low credit card payments. It also 
     fails to adequately protect debtors against strong-arm 
     tactics used by creditors to re-affirm debt, abuses that have 
     been recently well-documented in the Sears case and others.
       The UAW also is troubled that H.R. 833 places substantial 
     procedural and substantive barriers in the way of small 
     business seeking to re-organize under Chapter 11. This could 
     result in the loss of thousands of jobs for American workers.
       The UAW supports balanced bankruptcy reform. But that is 
     not what H.R. 833 is about. Instead, it would favor the 
     interests of credit card companies and banks over the 
     interests of hard working families that are experiencing 
     financial difficulties. We therefore urge you to oppose H.R. 
     833.
           Sincerely,
                                                     Alan Reuther,
                                             Legislative Director.

  Mr. Chairman, I reserve the balance of my time.
  Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, we share, all of us, the reverence for the gentleman 
from Illinois (Mr. Hyde) and the gentleman from Michigan (Mr. Conyers), 
two of the statesmen of our organization and to whom we look for 
decision-making on a broad spate of subject matters. But here I think 
they themselves may not realize what they are espousing.
  I say that with all kindness, because there are many times when I do 
not realize what I am doing, but this may be an example of good 
intentions that result in unintended consequences. We have heard that 
phraseology many times.
  What the gentlemen do, these two stalwarts of our Chamber, is shower 
additional benefits upon the higher income people in our society. How 
do they do that? All of us will agree that this whole process begins 
with the median income. Those people at the median income or less are 
protected by legislation that the gentleman from Illinois himself has 
put into this bill, the safe harbor. Those people are beyond the 
accountability that we seek from others because they are in such bad 
shape that they must be given almost automatically a fresh start.
  But now we are going to the higher income, over $50,000, 60, 70, 80, 
90. Now, those people under our bill, we have a set of standards to 
make sure that when we scrutinize their financial circumstances, we can 
find, if at all, the possibility that they could repay some of the 
debt. By putting these objective standards in it that we have, the IRS 
standards, we are putting a standard into play which allows a 
reasonable, objective scrutiny of these financial circumstances.
  Look what the gentleman from Illinois and what the gentleman from 
Michigan do. They say that for the $90,000 or $100,000 earner, we do 
not have to use these objective standards, let us use subjective 
standards, reasonable and necessary expenses. That means that before 
some fact finder a debtor can plead a Rolls Royce and really make a 
case or try to make a case that that is reasonable and necessary--I am 
exaggerating, of course, to make a point--for the conduct of that 
person's enterprise.
  For a variety of things from Oregon to Georgia, there would be 20 
different types of decisions made by 25 different courts on 25 
different items in a bankruptcy proceeding. Disparity will return. We 
are trying to get rid of disparity. Flexibility of outcome will return 
where we are trying to contract that, to bring predictability and 
stability into the system.
  I do not believe that, in looking at it very closely, that the 
gentleman from Michigan and the gentleman from Illinois would want to 
shower additional benefits on the higher income people, because that is 
what the result is. They are loosening those standards, returning them 
to the status quo now where so many of the high earners are escaping 
scrutiny in the bankruptcy system. That is what their unintended 
consequences might be.
  Furthermore, all the worry that the gentleman from Illinois 
articulates about the lack of discretion and flexibility is taken care 
of by one flat phraseology that we employ in our bill, and that is 
extraordinary circumstances. When we have a situation, even when we 
apply the objective standards which we think are absolutely necessary 
for stability of the system, but we also allow a variance from that 
when extraordinary circumstances can be demonstrated, then we have 
covered all the concerns that the gentleman from Illinois and the 
gentleman from Michigan express and still retain that stalwart set of 
objective standards that brings predictability and stability to the 
system.
  We must reject it, while applauding the gentlemen for their 
intentions, but the intentions of the proponents and sponsors of this 
bill is to make sanity out of a system that has gone awry. What they do 
is retain the status quo. We resist that temptation by saying to the 
Members, vote ``no'' on the Hyde-Conyers amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield 4 minutes to the gentleman from 
New York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, the picture painted by the gentleman from 
Pennsylvania (Mr. Gekas) would be funny if it were not serious. The 
gentleman from Illinois (Mr. Hyde), that paragon, supporter and 
champion of the raging liberal judiciary. Who believes that?
  The fact of the matter is that I must commend the gentleman from 
Illinois and the gentleman from Michigan for this amendment, for trying 
to retain some humanity in the bankruptcy courts.

                              {time}  1600

  The objective standards of which the gentleman from Pennsylvania (Mr.

[[Page H2721]]

Gekas) speaks are rigid and inhumane standards, inhumane standards that 
this Congress told the IRS to junk last year because we found they were 
inhumane. They are also standards that ignore the facts.
  In addition to what the gentleman from Michigan said before about the 
things they ignore, the fact is these standards are rigid and are 
averages. If you are a bankrupt and you are going to bankruptcy and 
they want to figure out how much you can afford to pay, the proper 
question is, what is your rent? What is your mortgage? Not what is the 
average mortgage payment in the northeast United States. If the IRS 
says the average mortgage payment in the United States is $400 a month, 
but your mortgage payment is $500, try to tell the bank that you can 
only pay $400. See how far you get.
  The fact is, a means test ought to be based on the reality, on the 
facts. What is your real income? That is a problem with this test that 
this amendment does not deal with, but what is your real income? What 
are your real expenses? Not what the IRS thinks the expenses of the 
average person in New York or California might be.
  The gentleman from Pennsylvania (Mr. Gekas) says that you have the 
safe harbor, that people under the median income are excluded from this 
means test. He forgets his own bill, because this means test is used in 
Chapter 13 without the safe harbor. In Chapter 13 this means test says 
how much you can afford to repay in a repayment plan, even if you are 
making $10,000 or $20,000 and you are under the median. But, again, how 
much can you afford to repay? Who cares what your real expenses are? 
All we care about is what the IRS says. That is simply unjust. It 
simply will produce injustice.
  This amendment would have the executive office of the United States 
trustee set up standards and the judge could look at the real facts. 
That is what a just system is. The gentleman from Pennsylvania (Mr. 
Gekas) says, well, you can go in and plead extraordinary circumstances. 
Sure you can, if you can spend $7,000 or $8,000 to do that with a 
lawyer. And you are bankrupt. Good luck.
  The gentleman from Pennsylvania (Mr. Gekas) says the gentleman from 
Illinois (Mr. Hyde) and the gentleman from Michigan (Mr. Conyers) do 
not understand what they are doing. They certainly do understand what 
they are doing, and because they understand what they are doing, that 
is why the National Bankruptcy Conference approves of this amendment, 
and why the Commercial Law League and the National Association of 
Consumer Bankruptcy Attorneys, the National Association of Bankruptcy 
Trustees, the National Association of Chapter 13 Trustees, the Consumer 
Federation of America, the Consumers Union, Public Citizen, and 
everybody who knows anything about bankruptcy, except the creditors who 
are buying and paying for this bill, support this amendment.
  Mr. GEKAS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Tennessee (Mr. Bryant), a member of the committee.
  (Mr. BRYANT asked and was given permission to revise and extend his 
remarks.)
  Mr. BRYANT. Mr. Chairman, I thank the gentleman for yielding me time.
  Mr. Chairman, I too stand in opposition to this amendment. In order 
to have effective bankruptcy reform, we need to have in this bill a set 
of uniform standards as to whether or not someone should be allowed to 
file in Chapter 7 or in Chapter 13 bankruptcy. The reason I oppose this 
amendment is that it would effectively damage the means test, using an 
open-ended subjective standards test. We have talked about that a 
little bit. You have heard about that already.
  In effect what that does in the real courtroom, it allows the 
debtor's expenses, rather than being determined in a uniform fashion, 
to be determined on a case-by-case, jurisdiction-by-jurisdiction, 
court-by-court basis, bound only by the limits of the debtor's 
imagination or the discretion of the judge.
  The debtor may deduct any expense, if they can show that it is 
reasonably necessary. If there is ever a word that is litigated to the 
``Nth'' degree, it is the word ``reasonable.'' That is what you are 
inviting in this situation. It invites an open door for litigation 
every time there is a dispute over what is meant by ``reasonably 
necessary.'' By having more litigation, you increase the administrative 
burdens on the bankruptcy system and already add to a costly situation.
  The ability to consider in this case that our chairman has spoken 
about the extraordinary circumstances I think does give the requisite 
flexibility that is needed, while at the same time maintaining some 
uniformity to this situation. Allowing bankruptcy judges to create 
their own test is an invitation, as has been said before, to disparate 
treatment of claims and confusion among creditors and all those who 
work within the bankruptcy system.
  Mr. Chairman, in conclusion, I would say that my understanding of 
H.R. 833 is that it does not actually incorporate the repayment test by 
the IRS. Instead, it merely incorporates the categories identified by 
the IRS as necessary expenses. So I urge my colleagues to oppose this 
amendment and vote no.
  Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from 
California (Mr. Royce).
  Mr. ROYCE. Mr. Chairman, I rise in strong opposition to the Hyde-
Conyers amendment.
  Mr. Chairman, this legislation, H.R. 833, is about personal 
responsibility. It is about clear standards. It is about correcting a 
system that was designed to help those who have fallen on hard times, 
but which is now used to protect those who can afford to pay to repay 
some of their debt, but they choose not to.
  H.R. 833 imposes clear objective standards to give debtors, 
creditors, judges and trustees guidance in applying a means test used 
to determine who has the ability to repay some of their debt. How is 
this test based? On the median expenditure levels as determined by the 
Bureau of Labor Standards and Statistics. This represents what the 
average American family spends each month and what someone in 
bankruptcy can afford to repay.
  This amendment that we are discussing removes this standard and 
replaces it with an entirely undefined standard of reasonably necessary 
expenses. Essentially this amendment would put us right back where we 
started.
  Yesterday's Washington Post included an article which, in my view, 
exemplifies what is wrong with the current bankruptcy code. This 
article reports on a family with an annual income of $180,000. The 
family apparently fell on hard times and filed for bankruptcy seeking 
to discharge $140,000 in unsecured debt, but, upon filing, they listed 
as among their monthly expenses projected $600 for entertainment, $270 
for cell phone expenses and so forth.
  Under H.R. 833, this family would receive the same allowances for 
mortgage, food, clothing and utilities as they do under current law. 
However, they would be denied the cell phone and the entertainment 
allowances that most Americans who pay their bills on time do not 
enjoy.
  Under the Conyers-Hyde amendment there would be no clear standard 
giving the judges the same discretion they have now, and this family 
and thousands in a similar situation could very well continue with the 
$600 entertainment and the $270 cell phone calls per month, all at the 
expense of the consumers who will ultimately pick up the tab.
  Again, H.R. 833 imposes the clear, consistent national standards that 
will ensure that those that have the ability to repay their debts are 
in fact required to do so. This amendment eviscerates those standards, 
and I urge my colleagues to oppose it.
  Mr. CONYERS. Mr. Chairman, I yield myself 2 minutes.
  Mr. Chairman, first I would point out to the gentleman that the court 
would merely disallow those claims that the gentleman rattled off from 
the newspaper. Just because someone files them does not mean they are 
going to get them. I cannot think of a Federal bankruptcy court that 
would allow that sort of thing.
  Mr. Chairman, it is no answer to assert that ``glitches'', so-called, 
can be resolved through the bill's allowance for extraordinary 
circumstances, that has been raised more than once here, because 
establishing that a particular expense is extraordinary is neither 
simple nor cost free. These circumstances can only be established on

[[Page H2722]]

a motion to the court prepared by legal counsel.
  We are talking about bankrupts. The motion must be detailed, 
documented and subject to creditor challenge. Moreover, the burden of 
proof lies with the debtor in establishing extraordinary circumstances. 
So if the debtor's motion fails, he is then subject to paying the 
creditor's fees and costs. Collectively, these risks provide a 
tremendous disincentive for debtors to claim extraordinary 
circumstances. To add insult to injury, the bill does not even provide 
for the deduction of the legal expenses needed to establish 
extraordinary circumstances.
  The IRS standards should offend us all, every Member of this body. 
They have been rejected by us, abandoned by the IRS, and, yet, the 
credit card companies would have us apply them in bankruptcy. We, who 
are so strongly opposed to abusive IRS collection tactics in the income 
tax context, cannot be supportive of incorporating these same standards 
into bankruptcy law.
  Mr. Chairman, this amendment goes to the heart of my concerns about 
the bill. If it is adopted, we may have a chance. I urge Members to 
give it their unfettered support.
  Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from 
Virginia (Mr. Boucher).
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman from Pennsylvania 
for yielding me time.
  Mr. Chairman, I rise in opposition to the amendment offered by the 
gentleman from Illinois and the gentleman from Michigan. If adopted, 
the amendment would seriously undermine the needs-based test for the 
entry into Chapter 7 that is at the very core of this bankruptcy 
reform.
  Our major goal in proposing bankruptcy reform is to assure that 
people who need bankruptcy protection, but who can afford to repay a 
substantial part of what they owe, receive their protection in Chapter 
13 plans in which the court will supervise the repayment.
  In the process of determining who can afford to repay a substantial 
part of their debt, the bill subtracts from the debtor's monthly income 
a number of items: All secured debt is subtracted; all priority debts, 
including child support and back taxes are subtracted; certain school 
tuition costs are subtracted; and living expenses based upon standards 
determined by the Internal Revenue Service are also subtracted.
  The amendment that is now being considered would replace the 
certainty of the IRS standard with a discretionary standard for 
bankruptcy judges to determine what expenses are reasonably necessary. 
The certainty of the IRS standard should be retained, and, in support 
of that position, I would cite these arguments.
  First, the Internal Revenue Service standards are generous. In a 
review of 2,100 bankruptcy filings in 1997 conducted by a major 
accounting firm, it was found that the living expenses under the IRS 
standard are, on average, 8 percent higher than the actual expenses 
reported by Chapter 7 filers. The expenses allowed under the standard 
are clearly more than adequate.
  Secondly, discretion already exists for bankruptcy judges and 
trustees to move filers from Chapter 7 to Chapter 13 by the filing of a 
motion alleging that petitioners are substantially abusing Chapter 7 
because they can repay a large part of the debt and really belong in 
Chapter 13. But, as a practical matter, these motions are rarely filed 
today by trustees or by bankruptcy judges.

                              {time}  1615

  The amendment now under consideration would simply move this complete 
discretion over whether to bring a substantial abuse motion to the 
living expense portion of the process.
  Since judges and trustees have been reluctant to use their existing 
discretion to require a greater use of Chapter 13 and the lesser use of 
Chapter 7, there is little reason to have confidence that essentially 
the same discretion will be any better used under the Hyde-Conyers 
amendment than it is under the current process. If it is not, the core 
reform that we are seeking to achieve will not be achieved.
  The better course is to reject this amendment and to retain the 
certainty of the IRS standard in determining reasonable living 
expenses.
  Mr. GEKAS. Mr. Chairman, I yield 1 minute to the gentleman from 
Michigan (Mr. Smith).
  Mr. SMITH of Michigan. Mr. Chairman, the reason I am supporting this 
bill is because it has the tendency of making loans more available and 
it has the tendency of bringing interest rates down.
  This amendment throws open the door for litigation every time there 
is a dispute as to whether a debtor's particular expenses are 
reasonably necessary. This will dramatically increase administrative 
burdens on the bankruptcy system.
  It also leaves the door open to indecision based on individual judge 
interpretation. Passing this amendment and doing away with the bill's 
more definite guidelines means those interest rates will not come down; 
it means that the increased availability of those loans will not be 
forthcoming until the lenders have decided what judges are going to do 
with the discretion that is added by the Hyde amendment.
  H.R. 833 does not incorporate the actual repayment test used by the 
IRS. Instead, it incorporates the categories identified by the IRS as 
necessary expenses. This is an important distinction because the means 
test of H.R. 833 is more flexible than anything used by the IRS.
  The ability to consider ``extraordinary circumstances'' provided for 
under the bill is a better mechanism to establish fair and equitable 
reform than the amendment giving bankruptcy judges discretion to create 
their own tests of ``reasonableness''.
  Allowing bankruptcy judges to create their own test is an invitation 
not only to the different treatment of debtors but also to confusion 
among creditors and those who work within the bankruptcy system.
  I urge defeat of the Hyde amendment.
  Mr. GEKAS. Mr. Chairman, I yield 1 minute to the gentlewoman from 
California (Mrs. Tauscher).
  Mrs. TAUSCHER. Mr. Chairman, I rise in opposition to this amendment. 
The Bankruptcy Reform Act would ensure that Americans who can 
reasonably repay some of their debt will do so. It is based on the 
principle of personal responsibility and intended to stem the tide of 
American bankruptcy filings.
  The Hyde-Conyers amendment flies in the face of that fundamental 
principle. Instead of establishing a reasonable standard of living 
expenses, as the bill does, this amendment would give judges broad 
authority to determine, quote/unquote, reasonably necessary expenses.
  This definition is ambiguous. It provides a loophole for bankruptcy 
filers to avoid repayment and maintains one of the deficiencies of the 
current system.
  This legislation recognizes not everyone who files for bankruptcy is 
able to repay their debts but it employs a reasonable standard to make 
that determination. The Hyde-Conyers amendment would remove that 
reasonableness from the bill. I urge my colleagues to oppose the Hyde-
Conyers amendment and support the Bankruptcy Reform Act.
  Mr. HYDE. Mr. Chairman, I yield myself the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield 30 seconds to the gentleman from 
Illinois.
  The CHAIRMAN. The gentleman from Illinois (Mr. Hyde) is recognized 
for 3 minutes.
  (Mr. HYDE asked and was given permission to revise and extend his 
remarks.)
  Mr. HYDE. Mr. Chairman, my colleagues are making a virtue out of what 
is a vice, and that is the inflexibility of the IRS standards. The cost 
of food in Omaha, Nebraska or Boise, Idaho, is different than in 
downtown Manhattan. So what is realistic about an inflexible standard? 
Why not give some wiggle room so that humanity can play out?
  This could be a good bill. It is a great bill for the creditors, I 
can say. I have 75 enhancements here for the creditors. Why not throw a 
little small bone to the debtor?
  Do not talk about ``reasonably necessary'' as too vague. Are my 
colleagues aware, those who have said that, that there is 15 years of 
litigation and decisional authority interpreting that? Of course. 
``Reasonable'' is a word used in negligence law, in the exercise of 
reasonable care and caution. To hear some of my colleagues talk, I 
would think this was from outer space. That is nonsense.

[[Page H2723]]

  We have to allow for regional differences, for family differences. A 
reasonably necessary standard is ascertainable.
  I am as capitalist as anybody, I am as conservative as anybody, but 
it does not seem to me when there is a bill that is truly tilted 
towards the creditors, that giving a little flexibility for living 
standards for people who are bankrupt is a violation of one's 
credentials as a conservative.
  The median income that the gentleman from Pennsylvania (Mr. Gekas) 
mentioned of $51,000 sounds like a lot of money, but that is for a 
family of four, a family of four. That may be a lot of money in Boise, 
Idaho. It may be very little in New York.
  Give some flexibility. The current law is what ought to obtain. My 
colleagues are trying to change it by putting the IRS standards in. It 
is the first time, and I dare say the last time, so much kind 
approbation will be showered on the IRS by this side of the aisle. I 
certainly do not join in that showering.
  So this litigation, there will be litigation on the IRS standards, 
there will be as much litigation as anyone wants.
  This could be a good bill. I support this bill, but for goodness sake 
give some humanity in the establishment of living standards while 
paying out Chapter 13.
  Lastly, let me pay my respects to the creditor lobby. They are 
awesome.
  Mr. GEKAS. Mr. Chairman, I yield myself 2 minutes.
  Mr. Chairman, we return to the recurring issue. The current state of 
bankruptcy is in a chaotic mess. One of the reasons is that an 
individual who wishes to file bankruptcy finds it very easy to do so. 
Very few standards are applied.
  The system needed tightening up. Everybody in the world knows that. 
Creditors, and the credit lobby, really understand that; there is no 
question about it. We understand how they understand it. On the other 
hand, an objective onlooker, the lawmakers that we are, who are eager 
to tighten up the bankruptcy laws because it is good for our society, 
it is good for our economy, it saves money for consumers to prevent 
bankruptcies, it saves money for taxpayers to prevent bankruptcies, it 
helps the tax collecting authorities like State governments, school 
boards, municipal governments to be able to regain some of their lost 
taxes by reason of unwarranted bankruptcies, all of these societal 
needs are met in our bill.
  What really is something that must be made clear to first the Members 
of Congress and then to the public is that the current system, that 
chaotic system, has too much flexibility. What the Hyde-Conyers 
amendment does is return too much flexibility to a system where we are 
trying to create standards and to tighten up on every corner of the 
bankruptcy field.
  How ironic it is that on the one hand they remove the IRS standards 
because they are odious to many and then they reinsert standards to be 
set by a trustee panel. So all of a sudden we are back to establishing 
standards anyway.
  What we have found throughout the test of the time that has been 
engulfed in bankruptcy reform, that the IRS standards provide the 
starting point and from there we have a better system at hand.
  Mr. DeLAY. Mr. Chairman, I rise today to urge my colleagues to vote 
no on this amendment. Bankruptcy reform must be allowed a chance to 
work.
  The bankruptcy reform bill that is before us today is simply trying 
to jump-start a sense of personal responsibility in the area of 
consumer financial transactions.
  Today's bankruptcy system has made it too easy for irresponsible 
people to pass on the burden of their financial debt to responsible 
people.
  The greatness of this country is based on freedom. But with this 
freedom comes responsibility for your actions.
  Because the stigma that was once associated with bankruptcy has 
disappeared, we see too many people using bankruptcy as a financial 
planning tool.
  And, too many lawyers are getting rich selling that tool.
  Gone is the notion that bankruptcy is to be a last-resort solution to 
a personal financial crisis.
  Gone is the chance of receiving a fresh start only after agreeing to 
a repayment plan.
  Instead, we see debtors routinely expecting others to pick up their 
tab.
  That in fact is what happens when the creditor passes on his or her 
losses to other borrowers--everyone pays a portion of that debtor's 
bill.
  Mr. Chairman, the bankruptcy bill under consideration today is based 
on the premise that those debtors who can afford to repay their debt 
should do so, rather that have it forgiven.
  To accomplish this seemingly simple goal, an income-based means test 
is employed to determine if a debtor could do one of three things: have 
debt forgiven; reorganize and enter into a repayment plan; or refrain 
from filing for bankruptcy at all.
  In order to differentiate amongst debtors and to end the abuses of 
the bankruptcy system, objective standards are needed to replace 
today's vague and ambiguous subjective guidelines in use by the 
bankruptcy courts.
  Mr. Chairman, the amendment before us will undercut the basic 
objective of reforming the bankruptcy system by allowing judges to 
continue to make the same subjective decisions about repayment--the 
very same decisions that have not prevented recent abuse of the system.
  The decision before us is clear: Vote ``yes'' only if you feel that 
the majority of your constituents should continue to pay the costs of 
these abuses.
  But better yet, vote ``no'' to give bankruptcy reform a chance to 
instill a sense of personal responsibility in consumer financial 
transactions.
  I urge my colleagues to vote ``no'' on this amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Illinois (Mr. Hyde).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.


                             Recorded Vote

  Mr. GEKAS. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The CHAIRMAN. Pursuant to House Resolution 158, after this 15-minute 
vote on the Hyde amendment the Chair will resume proceedings on the 
three questions postponed earlier on which demands for recorded votes 
are pending. Any electronic vote after the first vote in this series 
will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 184, 
noes 238, not voting 11, as follows:

                             [Roll No. 110]

                               AYES--184

     Abercrombie
     Ackerman
     Allen
     Bachus
     Baird
     Baldacci
     Baldwin
     Barrett (NE)
     Barrett (WI)
     Bentsen
     Berkley
     Bishop
     Blagojevich
     Blumenauer
     Boehlert
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Camp
     Capps
     Capuano
     Cardin
     Carson
     Chambliss
     Clay
     Clayton
     Clement
     Clyburn
     Conyers
     Costello
     Coyne
     Cummings
     Danner
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Doyle
     Edwards
     Engel
     Eshoo
     Evans
     Farr
     Fattah
     Filner
     Forbes
     Ford
     Fossella
     Frank (MA)
     Ganske
     Gejdenson
     Gilchrest
     Gilman
     Gonzalez
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Houghton
     Hoyer
     Hyde
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Kucinich
     LaFalce
     LaHood
     Lampson
     Lantos
     Larson
     LaTourette
     Leach
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McHugh
     McIntosh
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Miller, George
     Minge
     Mink
     Moakley
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ros-Lehtinen
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Snyder
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Udall (CO)
     Udall (NM)
     Vento
     Visclosky
     Wamp
     Waters
     Watt (NC)
     Waxman
     Weiner
     Weldon (PA)
     Wexler
     Wilson
     Wise
     Woolsey
     Wu

                               NOES--238

     Aderholt
     Andrews
     Archer
     Armey
     Baker
     Ballenger
     Barcia
     Barr
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehner
     Bonilla

[[Page H2724]]


     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chenoweth
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Crowley
     Cubin
     Cunningham
     Davis (FL)
     Davis (VA)
     Deal
     DeLay
     DeMint
     Dooley
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Etheridge
     Everett
     Ewing
     Fletcher
     Foley
     Fowler
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Gekas
     Gibbons
     Gillmor
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Hooley
     Horn
     Hostettler
     Hulshof
     Hunter
     Hutchinson
     Isakson
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kennedy
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     Largent
     Latham
     Lazio
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     McCollum
     McCrery
     McInnis
     McIntyre
     McKeon
     Menendez
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pascrell
     Pastor
     Paul
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rivers
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Rothman
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sandlin
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Toomey
     Turner
     Upton
     Velazquez
     Walden
     Walsh
     Watkins
     Weldon (FL)
     Weller
     Weygand
     Whitfield
     Wicker
     Wolf
     Young (AK)

                             NOT VOTING--11

     Becerra
     Berman
     Brown (CA)
     Gephardt
     Luther
     Millender-McDonald
     Simpson
     Slaughter
     Watts (OK)
     Wynn
     Young (FL)

                              {time}  1645

  Messrs. PAUL, QUINN, LEWIS of California, BASS, PETERSON of 
Pennsylvania, and MOLLOHAN changed their vote from ``aye'' to ``no.''
  Ms. McCARTHY of Missouri and Mr. EVANS changed their vote from ``no'' 
to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. BERMAN. Mr. Speaker, I was unable to cast a vote on the Hyde-
Conyers amendment due to a family emergency. However, had I been 
present, I would have voted ``aye.''
  Stated against:
  Mr. DICKEY. Mr. Chairman, I inadvertently voted incorrectly on the 
Hyde-Conyers amendment. I would like the Record to reflect that my vote 
of ``yes'' should have been a vote of ``no.'' That was my intention.


          Sequential Votes Postponed In Committee Of The Whole

  The CHAIRMAN. Pursuant to House Resolution 158, proceedings will now 
resume on those amendments on which further proceedings were postponed 
in the following order: Amendment No. 3 offered by the gentleman from 
Virginia (Mr. Moran); amendment No. 7 offered by the gentleman from 
Michigan (Mr. Conyers); and amendment No. 8 offered by the gentleman 
from North Carolina (Mr. Watt).
  The Chair will reduce to 5 minutes the time for any electronic vote 
in this series.


            Amendment No. 3 Offered by Mr. Moran of Virginia

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment offered by the gentleman from Virginia (Mr. Moran) on 
which further proceedings were postponed and on which the ayes 
prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 373, 
noes 47, not voting 13, as follows:

                             [Roll No. 111]

                               AYES--373

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Bachus
     Baird
     Baker
     Baldacci
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Bentsen
     Bereuter
     Berkley
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Bryant
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Costello
     Coyne
     Cramer
     Crane
     Crowley
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeGette
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehrlich
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Ewing
     Farr
     Filner
     Fletcher
     Foley
     Forbes
     Ford
     Fossella
     Fowler
     Frank (MA)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Green (TX)
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hilliard
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kennedy
     Kildee
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kucinich
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     Latham
     LaTourette
     Lazio
     Leach
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Markey
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McGovern
     McHugh
     McIntosh
     McIntyre
     McKeon
     McKinney
     McNulty
     Meek (FL)
     Menendez
     Metcalf
     Mica
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Napolitano
     Neal
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Ose
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Pease
     Pelosi
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Riley
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryun (KS)
     Sabo
     Salmon
     Sanchez
     Sanders
     Sanford
     Sawyer
     Scarborough
     Schakowsky
     Scott
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Spence
     Stabenow
     Stark
     Stearns
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Toomey
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Vento
     Walden
     Walsh
     Wamp
     Watkins
     Waxman
     Weiner
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     Whitfield
     Wicker
     Wise
     Wolf
     Woolsey
     Wu
     Young (AK)

                                NOES--47

     Baldwin
     Bonior
     Bono
     Borski
     Brady (PA)
     Burr
     Canady
     Cannon
     Chenoweth
     Conyers
     DeFazio
     Delahunt
     DeLauro
     Ehlers
     Evans
     Everett
     Fattah
     Goodling
     Hefley
     Hinchey
     Jackson-Lee (TX)
     Kilpatrick
     Lee
     Lipinski
     Lofgren
     Lowey
     Martinez
     McDermott
     McInnis
     Meehan
     Meeks (NY)
     Nadler
     Owens
     Paul
     Payne

[[Page H2725]]


     Peterson (MN)
     Pombo
     Ryan (WI)
     Sandlin
     Schaffer
     Souder
     Spratt
     Taylor (NC)
     Visclosky
     Waters
     Watt (NC)
     Wilson

                             NOT VOTING--13

     Becerra
     Berman
     Brown (CA)
     Cox
     Franks (NJ)
     Gephardt
     Luther
     Saxton
     Simpson
     Slaughter
     Watts (OK)
     Wynn
     Young (FL)

                              {time}  1654

  Ms. JACKSON-LEE of Texas, Mr. MEEKS of New York, and Mr. PAYNE 
changed their vote from ``aye'' to ``no.''
  So the amendment was agreed to.
  The result of the vote was announced as above recorded.


                 Amendment No. 7 Offered by Mr. Conyers

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment offered by the gentleman from Michigan (Mr. Conyers) 
on which further proceedings were postponed and on which the noes 
prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 143, 
noes 278, not voting 12, as follows:

                             [Roll No. 112]

                               AYES--143

     Abercrombie
     Ackerman
     Allen
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett (WI)
     Berkley
     Bishop
     Blagojevich
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capuano
     Carson
     Clay
     Clayton
     Clyburn
     Conyers
     Coyne
     Crowley
     Cummings
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dingell
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gejdenson
     Gonzalez
     Green (TX)
     Gutierrez
     Hastings (FL)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Houghton
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Lewis (GA)
     Linder
     Lowey
     Maloney (NY)
     Markey
     Martinez
     Mascara
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Moakley
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Payne
     Pelosi
     Phelps
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Saxton
     Schakowsky
     Scott
     Serrano
     Shows
     Stark
     Strickland
     Stupak
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Udall (CO)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu

                               NOES--278

     Aderholt
     Andrews
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bentsen
     Bereuter
     Berry
     Biggert
     Bilbray
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Cardin
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Costello
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dixon
     Doggett
     Dooley
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Hooley
     Horn
     Hostettler
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kennedy
     Kind (WI)
     King (NY)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Levin
     Lewis (CA)
     Lewis (KY)
     Lipinski
     LoBiondo
     Lofgren
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Manzullo
     Matsui
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Mink
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pastor
     Paul
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanchez
     Sandlin
     Sanford
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shuster
     Sisisky
     Skeen
     Skelton
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Toomey
     Turner
     Udall (NM)
     Upton
     Walden
     Walsh
     Wamp
     Watkins
     Weldon (FL)
     Weldon (PA)
     Weller
     Weygand
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Young (AK)

                             NOT VOTING--12

     Becerra
     Berman
     Bilirakis
     Brown (CA)
     Gephardt
     Luther
     Simpson
     Slaughter
     Smith (MI)
     Watts (OK)
     Wynn
     Young (FL)

                              {time}  1704

  Mr. DIXON changed his vote from ``aye'' to ``no.''
  Mr. MINGE changed his vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated for
  Mr. BERMAN. Mr. Speaker, I was unable to cast a vote on the Conyers 
amendment due to a family emergency. However, had I been present, I 
would have voted ``aye.''
  Stated against
  Mr. BILIRAKIS. Mr. Chairman, I missed rollcall Vote 112 because I was 
unfortunately detained and unable to make it to the floor. Had I been 
present, I would have voted ``no.''


            Amendment Offered by Mr. Watt of North Carolina

  The CHAIRMAN (Mr. Nethercutt). The pending business is the demand for 
a recorded vote on the amendment offered by the gentleman from North 
Carolina (Mr. Watt) on which further proceedings were postponed and on 
which the noes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 192, 
noes 230, not voting 11, as follows:

                             [Roll No. 113]

                               AYES--192

     Abercrombie
     Ackerman
     Allen
     Bachus
     Baird
     Baldwin
     Barcia
     Barrett (WI)
     Bentsen
     Bereuter
     Berkley
     Bishop
     Blagojevich
     Blumenauer
     Boehlert
     Bonior
     Borski
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Campbell
     Canady
     Capps
     Capuano
     Cardin
     Carson
     Chenoweth
     Clay
     Clayton
     Clyburn
     Coble
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Edwards
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Fossella
     Gejdenson
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hooley
     Hyde
     Inslee
     Jackson (IL)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     King (NY)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Linder
     Lipinski
     Lofgren
     Lowey
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCrery
     McDermott
     McGovern
     McHugh
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald

[[Page H2726]]


     Miller (FL)
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moran (VA)
     Murtha
     Myrick
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pastor
     Payne
     Pease
     Pelosi
     Petri
     Phelps
     Price (NC)
     Rahall
     Rangel
     Reyes
     Reynolds
     Rivers
     Rodriguez
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherwood
     Smith (NJ)
     Snyder
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Tancredo
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Whitfield
     Wise
     Wolf
     Woolsey
     Wu

                               NOES--230

     Aderholt
     Andrews
     Archer
     Armey
     Baker
     Baldacci
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Brady (TX)
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Castle
     Chabot
     Chambliss
     Clement
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeLay
     DeMint
     Deutsch
     Dickey
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Ford
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Isakson
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kennedy
     Kind (WI)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     McCollum
     McInnis
     McIntosh
     McIntyre
     McKeon
     Metcalf
     Mica
     Miller, Gary
     Moore
     Moran (KS)
     Morella
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pascrell
     Paul
     Peterson (MN)
     Peterson (PA)
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Riley
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Shimkus
     Shows
     Shuster
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (TX)
     Smith (WA)
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Toomey
     Udall (NM)
     Upton
     Walden
     Walsh
     Wamp
     Watkins
     Weldon (FL)
     Weldon (PA)
     Weller
     Weygand
     Wicker
     Wilson
     Young (AK)

                             NOT VOTING--11

     Becerra
     Berman
     Brown (CA)
     Gephardt
     Jackson-Lee (TX)
     Luther
     Simpson
     Slaughter
     Watts (OK)
     Wynn
     Young (FL)

                              {time}  1715

  Mr. PALLONE changed his vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. BERMAN. Mr. Speaker, I was unable to cast a vote on the Watt 
amendment due to a family emergency. However, had I been present, I 
would have voted ``aye.''
  Ms. JACKSON-LEE of Texas. Madam Speaker, during Rollcall Vote No. 
113, the Watt amendment under bill H.R. 833 on May 5, 1999, I was 
unavoidably detained. Had I been present, I would have voted ``aye.''
  The CHAIRMAN. It is now in order to consider amendment No. 11 printed 
in House Report 106-126.


  Amendment in the Nature of a Substitute No. 11 Offered by Mr. Nadler

  Mr. NADLER. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment in the nature of a substitute No. 11 offered by 
     Mr. Nadler:
       Strike all after the enacting clause and insert the 
     following:
       

     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--CONSUMER BANKRUPTCY PROVISIONS

                   Subtitle A--Needs based bankruptcy

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

              Subtitle B--Consumer Bankruptcy Protections

Sec. 105. Definitions.
Sec. 106. Enforcement.
Sec. 107. Sense of the congress.
Sec. 108. Discouraging abusive reaffirmation practices.
Sec. 109. Promotion of alternative dispute resolution.
Sec. 110. Enhanced disclosure for credit extensions secured by a 
              dwelling.
Sec. 111. Dual use debit card.
Sec. 112. Discouraging reckless lending practices.
Sec. 113. Protection of savings earmarked for the postsecondary 
              education of children.
Sec. 114. Effect of discharge.
Sec. 115. Limiting trustee liability.
Sec. 116. Reinforce the fresh start.
Sec. 117. Discouraging bad faith repeat filings.
Sec. 118. Curbing abusive filings.
Sec. 119. Debtor retention of personal property security.
Sec. 120. Relief from the automatic stay when the debtor does not 
              complete intended surrender of consumer debt collateral.
Sec. 121. Giving secured creditors fair treatment in chapter 13.
Sec. 123. Fair valuation of collateral.
Sec. 124. Domiciliary requirements for exemptions.
Sec. 125. Restrictions on certain exempt property obtained through 
              fraud.
Sec. 126. Rolling stock equipment.
Sec. 127. Discharge under chapter 13.
Sec. 128. Bankruptcy judgeships.
Sec. 129. Additional amendments to title 11, United States Code.
Sec. 131. Application of the codebtor stay only when the stay protects 
              the debtor.
Sec. 132. Adequate protection for investors.
Sec. 134. Giving debtors the ability to keep leased personal property 
              by assumption.
Sec. 135. Adequate protection of lessors and purchase money secured 
              creditors.
Sec. 136. Automatic stay.
Sec. 137. Extend period between bankruptcy discharges.
Sec. 139. Priorities for claims for domestic support obligations.
Sec. 142. Nondischargeability of certain debts for alimony, 
              maintenance, and support.
Sec. 143. Continued liability of property.
Sec. 144. Protection of domestic support claims against preferential 
              transfer motions.
Sec. 145. Clarification of meaning of household goods.
Sec. 147. Monetary limitation on certain exempt property.
Sec. 148. Bankruptcy fees.
Sec. 149. Collection of child support.
Sec. 150. Excluding employee benefit plan participant contributions and 
              other property from the estate.
Sec. 151. Clarification of postpetition wages and benefits.
Sec. 152. Exceptions to automatic stay in domestic support obligation 
              proceedings.
Sec. 153. Automatic stay inapplicable to certain proceedings against 
              the debtor.
Sec. 154. Definition of domestic support obligation.
Sec. 155. Requirements to obtain confirmation and discharge in cases 
              involving domestic support obligations.
Sec. 156. Exceptions to automatic stay in domestic support obligation 
              proceedings.
Sec. 157. Exemption for right to receive certain alimony, maintenance, 
              or support.
Sec. 158. Automatic stay inapplicable to certain proceedings against 
              the debtor.

                TITLE II--DISCOURAGING BANKRUPTCY ABUSE

Sec. 201. Reenactment of chapter 12.
Sec. 202. Meetings of creditors and equity security holders.
Sec. 203. Protection of retirement savings in bankruptcy.
Sec. 204. Protection of refinance of security interest.
Sec. 205. Executory contracts and unexpired leases.
Sec. 206. Creditors and equity security holders committees.

[[Page H2727]]

Sec. 207. Amendment to section 546 of title 11, United States Code.
Sec. 208. Limitation.
Sec. 209. Amendment to section 330(a) of title 11, United States Code.
Sec. 210. Postpetition disclosure and solicitation.
Sec. 211. Preferences.
Sec. 212. Venue of certain proceedings.
Sec. 213. Period for filing plan under chapter 11.
Sec. 214. Fees arising from certain ownership interests.
Sec. 215. Claims relating to insurance deposits in cases ancillary to 
              foreign proceedings.
Sec. 216. Defaults based on nonmonetary obligations.
Sec. 217. Sharing of compensation.
Sec. 218. Priority for administrative expenses.

           TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS

Sec. 301. Definition of disinterested person.
Sec. 302. Miscellaneous improvements.
Sec. 303. Extensions.
Sec. 304. Local filing of bankruptcy cases.
Sec. 305. Permitting assumption of contracts.

             TITLE IV--SMALL BUSINESS BANKRUPTCY PROVISIONS

Sec. 401. Flexible rules for disclosure Statement and plan.
Sec. 402. Definitions.
Sec. 403. Standard form disclosure Statement and plan.
Sec. 404. Uniform national reporting requirements.
Sec. 405. Uniform reporting rules and forms for small business cases.
Sec. 406. Duties in small business cases.
Sec. 407. Plan filing and confirmation deadlines.
Sec. 408. Plan confirmation deadline.
Sec. 409. Prohibition against extension of time.
Sec. 410. Duties of the United States trustee.
Sec. 411. Scheduling conferences.
Sec. 412. Serial filer provisions.
Sec. 413. Expanded grounds for dismissal or conversion and appointment 
              of trustee or examiner.
Sec. 414. Study of operation of title 11 of the United States Code with 
              respect to small businesses.
Sec. 415. Payment of interest.
Sec. 416. Protection of jobs.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

              TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM

Sec. 601. Creditor representation at first meeting of creditors.
Sec. 602. Audit procedures.
Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 604. Dismissal for failure to timely file schedules or provide 
              required information.
Sec. 605. Adequate time to prepare for hearing on confirmation of the 
              plan.
Sec. 606. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the 
              Federal Rules of Bankruptcy Procedure.
Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy 
              cases.
Sec. 609. Study of bankruptcy impact of credit extended to dependent 
              students.
Sec. 610. Prompt relief from stay in individual cases.
Sec. 611. Stopping abusive conversions from chapter 13.
Sec. 612. Bankruptcy appeals.
Sec. 613. GAO study.

                       TITLE VII--BANKRUPTCY DATA

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

                 TITLE VIII--BANKRUPTCY TAX PROVISIONS

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

            TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES

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

                 TITLE X--FINANCIAL CONTRACT PROVISIONS

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

                    TITLE XI--TECHNICAL CORRECTIONS

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

      TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1201. Effective date; application of amendments.

                TITLE I--CONSUMER BANKRUPTCY PROVISIONS

                   Subtitle A--Needs based bankruptcy

     SEC. 101. CONVERSION.

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

     SEC. 102. DISMISSAL OR CONVERSION.

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

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

       (2) by amending subsection (b) to read as follows:
       ``(b)(1) After notice and a hearing, a court, on its own 
     motion or on a motion by the United States trustee, the 
     trustee, or any part in interest who is eligible to bring a 
     motion, may dismiss a case filed by an individual debtor 
     under this chapter, or with the debtor's consent, convert 
     such a case to a case under chapter 11 or 13 of this title if 
     it finds that the granting of relief would be an abuse of the 
     provisions of this chapter, the court shall consider 
     whether--
       ``(A) the debtor has the ability to repay some portion of 
     the debtor's unsecured nonpriority debt as determined under 
     paragraphs (2) and (3);
       ``(B) the debtor has filed the petition in bad faith; or
       ``(C) 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.
       ``(2) In considering under paragraph (1)(A) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter, the court shall conclusively presume abuse does 
     not exist if the debtor's current monthly income, when 
     multiplied by 12, is less than or equal to 100 percent of the 
     highest national or applicable State or Statistical Area 
     median family income reported for a family of equal size, 
     whichever is greater, or in the case of a household of 1 
     person, less than or

[[Page H2728]]

     equal to 100 percent of the highest national or State or 
     Metropolitan Statistical Area median household income for 1 
     earner, whichever is greater, as adjusted, if applicable, as 
     provided in paragraph (6).
       ``(3) In considering under paragraph (1)(A) whether the 
     granting of relief would be an abuse of the provision of this 
     chapter, the court shall presume abuse exists if--
       ``(A) the debtor's current monthly income, when multiplied 
     by 12, is less than or equal to 100 percent of the highest 
     national or applicable State or Metropolitan Statistical Area 
     median family income reported for a family of equal size, 
     whichever is greater, or in the case of a household of 1 
     person, less than or equal to 100 percent of the highest 
     national or State or Metropolitan Statistical Area median 
     household income for 1 yearner, whichever is greater, as 
     adjusted, if applicable, as provided in paragraph (6); and
       ``(B) the product of--
       ``(i) the debtor's current monthly income, reduced by 
     allowable monthly expenses specified in paragraph (4) (which 
     shall include, if applicable the continuation of actual 
     expenses of a dependent child under the age of 18 for 
     tuition, books, and required fees at a private elementary or 
     secondary school, or comparable expenses stemming from the 
     home education of such child, or the attendance of such child 
     at a public elementary or secondary school, not exceeding 
     $10,000) and monthly debt payments specified in paragraph 
     (5), and
       ``(ii) multiplied by 36,

     less estimated administrative expenses and reasonable 
     attorneys' fees, is not less than $6,000 of the debtor's 
     nonpriority unsecured claims in the case.
       ``(4) For the purposes of this subsection, the debtor's 
     allowable monthly expenses shall be the expenses reasonably 
     necessary--
       ``(A) for the maintenance or support of the debtor, the 
     dependents of the debtor, and in a joint case, the spouse of 
     the debtor if the spouse is not otherwise a dependent; and
       ``(B) if the debtor is engaged in business, for the payment 
     of expenditures necessary for the continuation, preservation, 
     and operation of such business.

     Notwithstanding any other provision of this clause, the 
     debtor's monthly expenses shall not include payments for 
     debts described in paragraph (5).
       ``(5) For purposes of this subsection, the debtor's monthly 
     debt payments shall include--
       ``(A) the total amount scheduled as contractually due on 
     all secured debts in each month of the 36 months following 
     the date of the petition and divided by 36; and
       ``(B) the debtor's expenses for payment of all priority 
     claims, including priority domestic support obligations, 
     calculated as the total amount of debts entitled to priority 
     in each month of the 36 months following the date of the 
     petition and divided by 36.
       ``(6) For the purposes of this subsection--
       ``(A) national or applicable State or Metropolitan 
     Statistical Area median family income reported for a 
     household of more than 4 individuals shall be that of a 
     household of 4 individuals plus $583 per month for each 
     additional member of that household;
       ``(B) a family or household shall consist of the debtor, 
     the debtor's spouse, and the debtor's dependents, but not a 
     legally separated spouse unless the spouse files a joint case 
     with the debtor.
       ``(7) In any proceeding brought under this subsection, the 
     presumption of abuse may be rebutted by demonstrating special 
     circumstances that justify additional reasonable expenses or 
     adjustments of current monthly total income. In order to 
     establish such circumstances, the debtor shall be required 
     to--
       ``(A) itemize each additional expense or adjustment of 
     income; and
       ``(B) provide documentation of such expenses and a detailed 
     explanation of the circumstances that warrant such expenses.
       ``(8)(A) As part of the schedule of current income and 
     expenditures required under section 521, the debtor shall 
     include--
       ``(i) a statement of the debtor's current monthly income 
     and calculations that show whether a presumption arises under 
     paragraph (1)(A) of this subsection; or
       ``(ii) a statement of the debtor's current monthly income 
     showing that the debtor is a debtor described in paragraph 
     (14) of this subsection.
       ``(B) The Supreme Court shall promulgate rules under 
     section 2075 of title 28, United States Code, that prescribe 
     a form for a statement under subparagraph (A) and may provide 
     general rules on the content of such statement.
       ``(9) If a trustee brings a motion for dismissal or 
     conversion under this subsection, and the court grants that 
     motion and finds that the action of the counsel for the 
     debtor in filing under this chapter violated Rule 9011, the 
     courts hall assess damages, which may include ordering--
       ``(A) the counsel for the debtor to reimburse the trustee 
     for all reasonable costs in prosecuting a motion brought 
     under section 707(b), including reasonable attorneys' fees;
       ``(B) the assessment of an appropriate civil penalty 
     against the counsel for the debtor; and
       ``(C) the payment of the civil penalty to the trustee or 
     the United States trustee.
       ``(10) The court may award a debtor all reasonable costs 
     and other appropriate damages in contesting a motion brought 
     by a party in interest (other than a trustee, bankruptcy 
     administrator, or United States trustee) under this 
     subsection (including reasonable attorneys' fees) if the 
     court does not grant the motion and the court finds that--
       ``(A) the position of the party that brought the motion was 
     not substantially justified; or
       ``(B) the party brought the motion solely for the purpose 
     of coercing the debtor into waiving a right guaranteed to the 
     debtor under this title.
       ``(11) A party in interest may not bring a motion under 
     this section until the United States trustee has either filed 
     a statement under section 704(b)(2)(A) or filed a motion 
     under section 704(b)(2)(B).
       ``(12) If an attorney for a party in interest (other than a 
     trustee, bankruptcy administrator, or United States trustee) 
     brings a motion for dismissal or conversion under this 
     subsection, and the court does not grant that motion and 
     finds that the action of the counsel for the moving party in 
     filing such motion under this chapter violated Rule 9011, the 
     court shall assess damages, which may include ordering--
       ``(A) the counsel for the moving party to reimburse the 
     debtor for all reasonable costs in defending a motion brought 
     under section 707(b), including reasonable attorneys' fees;
       ``(B) the assessment of an appropriate civil penalty 
     against the counsel for the moving party.
       ``(13) In making a determination whether to dismiss a case 
     under this section, the court may not take into consideration 
     whether a debtor has made, or continues to make, charitable 
     contributions (that meet the definition of `charitable 
     contribution' under section 548(d)(3) and as described by 
     section 548(a)(2)of this title to any qualified religious or 
     charitable entity or organization (as that term is defined in 
     section 548(d)(4)) of this title.
       ``(14) No court, United States trustee, bankruptcy 
     administrator, or other party in interest shall bring a 
     motion under subsection (b)(1)(A) if, as of the date of the 
     order for relief, the debtor's current monthly income, when 
     multiplied by 12, is less than or equal to 100 percent of the 
     highest national or applicable State or Metropolitan 
     Statistical Area median family income reported for a family 
     of equal size, whichever is greater, or in the case of a 
     household of 1 person, less than or equal to 100 percent of 
     the highest national or State or Metropolitan Statistical 
     Area median household income for 1 earner, whichever is 
     greater, as adjusted, if applicable, as provided in 
     paragraph(6);''.
       (b) Definition.--Section 101 of title 11, United States 
     Code, is amended--
       (1) 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;
       ``(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), but excludes--
       ``(i) payments to victims of war crimes or crimes against 
     humanity;
       ``(ii) benefits received from the Department of Veterans 
     Affairs in connection with service in the armed forces of the 
     United States;
       ``(iii) income received on account of disability;and
       ``(iv) benefits received under the Social Security Act.'';
       (2) by inserting after paragraph (17) the following:
       ``(17A) `estimated administrative expenses' means 10 
     percent of projected payments under a chapter 13 plan;''.
       (c) Duties of Chapter 7 Trustee.--Section 704 of title 11, 
     United States Code, is amended--
       (1) by inserting ``(a)'' before ``The trustee shall--''; 
     and
       (2) by adding at the end the following:
       ``(b)(1) With respect to an individual debtor under this 
     chapter, the trustee shall review all materials filed by the 
     debtor and, not later than 10 days after the first meeting of 
     creditors, file with the court and the United States trustee 
     a statement as to whether the debtor's case could be presumed 
     to be an abuse under section 707(b).
       ``(2) Not later than 60 days after receiving a statement 
     filed under paragraph (1), the United States trustee or 
     bankruptcy administrator shall--
       ``(A) file a statement setting forth the reasons why the 
     bankruptcy administrator does not believe that such a motion 
     would be appropriate or would be prohibited because the 
     debtor is a debtor of the kind described in section 
     707(b)(14) of this title; or
       ``(B) file a motion to dismiss or convert under section 
     707(b) if, based on the filing of such statement with the 
     court, the United States trustee or bankruptcy administrator 
     determines that the case should be presumed to be an abuse 
     under section 707(b) and the debtor's current monthly income, 
     when multiplied by 12, is less than or equal to 100 percent 
     of the highest national or applicable State or State 
     Metropolitan Statistical Area median family income reported 
     for a family of equal size, whichever is greater, or in the 
     case of a household of 1 person, less than or equal to 100 
     percent of the highest national or State or Metropolitan 
     Statistical Area median household income for 1 earner,

[[Page H2729]]

     whichever is greater. For the purposes of determining whether 
     a motion would be appropriate to be filed, the United States 
     trustee shall consider adjustments to current monthly income 
     for income items received over the most recent 180 days that 
     are not reasonably expected to be reflected in future income, 
     or expenses likely to be due under a chapter 13 plan which 
     are not included in the required statement of the debtor's 
     expense. The debtor shall, at the request of the United 
     States trustee, provide documentation for any current income 
     items that are not reasonably expected to be reelected in 
     future income, and a detailed explanation of the 
     circumstances that warrant making such adjustments. If the 
     United States trustee determines that, after accounting for 
     these adjustments, the debtor's current monthly income, which 
     multiplied by 12, is less than or equal to 100 percent of the 
     higher of the national, State, or Metropolitan Statistical 
     Area median family income reported for a family of equal or 
     lesser size, or in the case of a household of 1 person, the 
     national median household income for 1 earner, then the case 
     shall be presumed not be an abuse of the previous of this 
     chapter.

     For the purpose of this subsection, the national or 
     applicable State or Metropolitan Statistical Area median 
     family income reported for a household of more than 4 
     individuals shall be that of a household of 4 individuals 
     plus $583 per month for each additional member of that 
     household.
       ``(3) Paragraph (2) shall not be construed to preclude the 
     court or any other party who is eligible to file a motion 
     under section 707(b) from bringing such a motion.''.
       (d) Meeting of Creditors and Equity Security Holders.--
     Section 341 of title 11, United States Code, is amended by 
     adding the following new subsection:
       ``(e) The initial notice of the meeting of creditors shall 
     indicate whether the debtor's current monthly income is 
     reported to be equal or greater than the applicable median 
     income for purposes of subsection 707(b) of this title.''.
       (e) Guidelines for Assessing Income.--Section 586 of title 
     28, United States Code, is amended by adding the following 
     new subsection:
       ``(f) Not later than 1 year after the effective date of 
     this subsection, the Director of the Executive Office for the 
     United States Trustees shall issue guidelines to assist in 
     making assessment of whether income is not reasonably 
     necessary to be expended by a debtor for the maintenance or 
     support of the debtor, the dependents of the debtor, and in a 
     joint case, the spouse of the debtor if the spouse is not 
     otherwise a dependent. The director shall consult with the 
     Department of the Treasury, and others as needed in 
     developing the guidelines.''.
       (f) Section 104, title 11, United States Code, as amended 
     by subsection ____ of this Act, is amended by striking out 
     ``523(a)(2)(C), and 707(b)(3)'' each place it appears and 
     inserting ``523(a)(2)(C), and 707(b)'' in lieu thereof.
       (g) Clerical Amendment.--The table of sections at the 
     beginning of chapter 7 of title 11, United States Code, is 
     amended by striking the item relating to section 707 and 
     inserting the following:

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

     SEC. 103. NOTICE OF ALTERNATIVES.

       Section 342(b) of title 11, United States Code, is amended 
     to read as follows:
       ``(b) Before the commencement of a case under this title by 
     an individual whose debts are primarily consumer debts, the 
     clerk shall give to such individual written notice 
     containing--
       ``(1) a brief description of--
       ``(A) chapters 7, 11, 12, and 13 and the general purpose, 
     benefits, and costs of proceeding under each of those 
     chapters; and
       ``(B) the types of services available from credit 
     counseling agencies; and
       ``(2) statements specifying that--
       ``(A) a person who knowingly and fraudulently conceals 
     assets or makes a false oath or statement under penalty of 
     perjury in connection with a bankruptcy case shall be subject 
     to fine, imprisonment, or both; and
       ``(B) all information supplied by a debtor in connection 
     with a bankruptcy case is subject to examination by the 
     Attorney General.''.

     SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

       (a) Development of Financial Management and Training 
     Curriculum and Materials.--The Director of the Executive 
     Office for United States Trustees (in this section referred 
     to as the ``Director'') shall consult with a wide range of 
     individuals who are experts in the field of debtor education, 
     including trustees who are appointed under chapter 13 of 
     title 11 of the United States Code and who operate financial 
     management education programs for debtors, and shall develop 
     a financial management training curriculum and materials that 
     can be used to educate individual debtors on how to better 
     manage their finances.
       (b) Test--(1) The Director shall select 6 judicial 
     districts of the United States in which to test the 
     effectiveness of the financial management training curriculum 
     and materials developed under subsection (a).
       (2) For a 18-month period beginning not later than 270 days 
     after the date of the enactment of this Act, such curriculum 
     and materials shall be, for the 6 judicial districts selected 
     under paragraph (1), used as the instructional course 
     concerning personal financial management for purposes of 
     section 111 of this title.
       (c) Evaluation.--(1) During the 1-year period referred to 
     in subsection (b), the Director shall evaluate the 
     effectiveness of--
       (A) the financial management training curriculum and 
     materials developed under subsection (a); and
       (B) a sample of existing consumer education programs such 
     as those described in the Report of the National Bankruptcy 
     Review Commission (October 20, 1997) that are representative 
     of consumer education programs carried out by the credit 
     industry, by trustees serving under chapter 13 of title 11 of 
     the United States Code, and by consumer counselling groups.
       (2) Not later than 3 months after concluding such 
     evaluation, the Director shall submit a report to the Speaker 
     of the House of Representatives and the President pro tempore 
     of the Senate, for referral to the appropriate committees of 
     the Congress, containing the findings of the Director 
     regarding the effectiveness of such curriculum, such 
     materials, and such programs and their costs.

              Subtitle B--Consumer Bankruptcy Protections

     SEC. 105. DEFINITIONS.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (2) the following:
       ``(3) `assisted person' means any person whose debts 
     consist primarily of consumer debts and whose non-exempt 
     assets are less than $150,000;'';
       (2) by inserting after paragraph (4) the following:
       ``(4A) `bankruptcy assistance' means any goods or services 
     sold or otherwise provided to an assisted person with the 
     express or implied purpose of providing information, advice, 
     counsel, document preparation or filing, or attendance at a 
     creditors' meeting or appearing in a proceeding on behalf of 
     another or providing legal representation with respect to a 
     proceeding under this title;''; and
       (3) by inserting after paragraph (12A) the following:
       ``(12B) `debt relief agency' means any person who provides 
     any bankruptcy assistance to an assisted person in return for 
     the payment of money or other valuable consideration, or who 
     is a bankruptcy petition preparer pursuant to section 110 of 
     this title, but does not include any person that is any of 
     the following or an officer, director, employee or agent 
     thereof--
       ``(A) any nonprofit organization which is exempt from 
     taxation under section 501(c)(3) of the Internal Revenue Code 
     of 1986;
       ``(B) any creditor of the person to the extent the creditor 
     is assisting the person to restructure any debt owed by the 
     person to the creditor; or
       ``(C) any depository institution (as defined in section 3 
     of the Federal Deposit Insurance Act) or any Federal credit 
     union or State credit union (as those terms are defined in 
     section 101 of the Federal Credit Union Act), or any 
     affiliate or subsidiary of such a depository institution or 
     credit union;''.
       (b) Conforming Amendment.--In section 104(b)(1) by 
     inserting ``101(3),'' after ``sections''.

     SEC. 106. ENFORCEMENT.

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

     ``Sec. 526. Debt relief agency enforcement

       ``(a) A debt relief agency shall not--
       ``(1) fail to perform any service which the debt relief 
     agency has told the assisted person or prospective assisted 
     person the agency would provide that person in connection 
     with the preparation for or activities during a proceeding 
     under this title;
       ``(2) make any statement, or counsel or advise any assisted 
     person to make any statement in any document filed in a 
     proceeding under this title, which is untrue and misleading 
     or which upon the exercise of reasonable care, should be 
     known by the debt relief agency to be untrue or misleading;
       ``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission, what services the debt relief agency can 
     reasonably expect to provide that person, or the benefits an 
     assisted person may obtain or the difficulties the person may 
     experience if the person seeks relief in a proceeding 
     pursuant to this title; or
       ``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of that person 
     filing a proceeding under this title or in order to pay an 
     attorney or bankruptcy petition preparer fee or charge for 
     services performed as part of preparing for or representing a 
     debtor in a proceeding under this title.''.
       ``(b) Assisted Person Waivers Invalid.--Any waiver by any 
     assisted person of any protection or right provided by or 
     under this section shall not be enforceable against the 
     debtor by any Federal or State court or any other person, but 
     may be enforced against a debt relief agency.
       ``(c) Noncompliance.--
       ``(1) Any contract between a debt relief agency and an 
     assisted person for bankruptcy assistance which does not 
     comply with the material requirements of this section 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 shall be liable to an assisted 
     person in the amount of any

[[Page H2730]]

     fees or charges in connection with providing bankruptcy 
     assistance to such person which the debt relief agency has 
     received, for actual damages, and for reasonable attorneys' 
     fees and costs if the debt relief agency is found, after 
     notice and hearing, to have--
       ``(A) intentionally or negligently failed to comply with 
     any provision of this section with respect to a bankruptcy 
     case or related proceeding of the assisted person;
       ``(B) provided bankruptcy assistance to an assisted person 
     in a case or related proceeding which is dismissed or 
     converted because of the debt relief agency's intentional or 
     negligent failure to file bankruptcy papers, including papers 
     specified in section 521 of this title; or
       ``(C) intentionally or negligently disregarded the material 
     requirements of this title or the Federal Rules of Bankruptcy 
     Procedure applicable to such debt relief agency.
       ``(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 this section, 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 
     and in addition to any other remedy provided under Federal or 
     State law, if the court, on its own motion or on the motion 
     of the United States trustee or the debtor, finds that a 
     person intentionally violated this section, or engaged in a 
     clear and consistent pattern or practice of violating this 
     section, the court may--
       ``(A) enjoin the violation of such section; or
       ``(B) impose an appropriate civil penalty against such 
     person.
       ``(c) Relation to State Law.--This section 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, is amended by 
     inserting after the item relating to section 527, the 
     following:

``526. Debt relief agency enforcement.''.

     SEC. 107. SENSE OF THE CONGRESS.

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

     SEC. 108. DISCOURAGING ABUSIVE REAFFIRMATION PRACTICES.

       (a) Section 524 of title 11, United States Code, is 
     amended--
       (1) in subsection (c)(2)(B) by adding at the end the 
     following:
       ``(C)(i) such agreement contains a clear and conspicuous 
     statement advising the debtor of the amount of the monthly 
     payments, the total amount payable and number of payments if 
     the payments are made according to schedule, the amount of 
     the total payment attributable to principal, interest, late 
     fees, and creditor's attorneys fees, the interest rate, and 
     the ways in which terms differ from the original agreement; 
     and
       ``(ii) if the debt is secured, the agreement is accompanied 
     by a copy of the instrument creating the debt and any 
     security interest or lien and the documents necessary to show 
     perfection of the interest, and the agreement contains a 
     clear and conspicuous statement that advises the debtor of 
     the value of the collateral and the date on which the lien 
     will be released if payments are made according to 
     schedule;'';
       (2) in subsection (c)(6)(B), by inserting after ``real 
     property'' the following: ``or is a debt described in 
     subsection (c)(7)''; and
       (3) by adding at the end of subsection (c) the following:
       ``(7) in a case concerning an individual, if the 
     consideration for such agreement is based on whole or in part 
     on an unsecured consumer debt, or is based on whole or in 
     part upon a debt for an item of personalty, the value of 
     which at point of purchase was $500 or less, and in which the 
     creditor asserts a security interest, the court approves such 
     agreement as--
       ``(A) in the best interest of the debtor in light of the 
     debtor's income and expenses;
       ``(B) not imposing an undue hardship on the debtor's future 
     ability of the debtor to pay for the needs of children and 
     other dependents (including court ordered support);
       ``(C) not requiring the debtor to pay the creditor's 
     attorney's fees, expenses, or other costs relating to the 
     collection of the debt;
       ``(D) not agreed upon by the debtor to protect property 
     necessary for the care and maintenance of children or other 
     dependents that would have nominal value on repossession;
       ``(E) not the product of coercive threats or actions by the 
     creditor in the creditor's course of dealings with the 
     debtor; and
       ``(F) not unfair because excessive in amount as compared to 
     the value of the collateral;
       (4) in subsection (d)(2) by striking ``subsections (c)(6)'' 
     and inserting ``subsections (c)(6) and (c)(7)'', and after 
     ``of this section,'' by striking ``if the consideration for 
     such agreement is based in whole or in part on a consumer 
     debt that is not secured by real property of the debtor'' and 
     adding at the end ``as applicable''.
       (b) Section 104 of title 11, United States Code, as amended 
     by subsection ____ of this Act, is amended by striking out 
     ``523(a)(2)(C), and 707(b)(3)'' each place it appears and 
     inserting ``523(a)(2)(C), 524(c)(7), and 707(b)(3)'' in lieu 
     thereof.

     SEC. 109. 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 
     wholly on unsecured consumer debts by not more than 20 
     percent, if the debtor can prove by clear and convincing 
     evidence that the claim was filed by a creditor who 
     unreasonably refused to negotiate a reasonable alternative 
     repayment schedule proposed by an approved credit counseling 
     agency acting on behalf of the debtor, and if--
       ``(A) such offer was made within the period beginning 60 
     days before the filing of the petition;
       ``(B) such offer 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, is entitled to priority under 
     section 507 of this title, or would be paid a greater 
     percentage in a chapter 13 proceeding than offered by the 
     debtor.
       ``(2) The debtor shall have the burden of proving that the 
     proposed alternative repayment schedule was made in the 60-
     day period specified in subparagraph (A) and that the 
     creditor unreasonably refused to consider the debtor's 
     proposal.''.
       (b) Limitation on Avoidability.--Section 547 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(h) The trustee may not avoid a transfer if such transfer 
     was made as a part of an alternative repayment plan between 
     the debtor and any creditor of the debtor created by an 
     approved credit counseling agency.''.

     SEC. 110. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED 
                   BY A DWELLING.

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

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

     SEC. 111. DUAL USE DEBIT CARD.

       (a) Study Required.--The Board of Governors of the Federal 
     Reserve System (in this section referred to as the ``Board'') 
     shall conduct a study of existing protections provided to 
     consumers to limit their liability for unauthorized use of a 
     debit card or similar access device.
       (b) Specific Considerations.--In conducting the study 
     required by subsection (a), the Board shall specifically 
     consider the following--
       (1) the extent to which existing provisions of section 909 
     of the Electronic Fund Transfer Act and the Board's 
     implementing regulations provide adequate unauthorized use 
     liability protection for consumers;
       (2) the extent to which any voluntary industry rules have 
     enhanced the level of protection afforded consumers in 
     connection with such unauthorized use liability; and
       (3) whether amendments to the Electronic Funds Transfer Act 
     or the Board's implementing regulations thereto are necessary 
     to

[[Page H2731]]

     provide adequate protection for consumers in this area.
       (c) Report and Regulations.--Not later than 2 years after 
     the date of the enactment of this Act, the Board shall make 
     public a report on its findings with respect to the adequacy 
     of existing protections afforded consumers with respect to 
     unauthorized-use liability for debit cards and similar access 
     devices. If the Board determines that such protections are 
     inadequate, the Board, pursuant to its authority under the 
     Electronic Funds Transfer Act, may issue regulations to 
     address such inadequacy. Any regulations issued by the Board 
     shall not be effective before 36 months after the date of the 
     enactment of this Act.

     SEC. 112. DISCOURAGING RECKLESS LENDING PRACTICES.

       (a) Limiting Claims Arising From Irresponsible Lending 
     Practices.--Section 502(b) of title 11, United States Code, 
     is amended--
       (1) in paragraph (8) by striking ``or'' at the end,
       (2) in paragraph (9) by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(10) the claim is for a consumer debt under an open end 
     credit plan (as defined in section 103 of the Truth in 
     Lending Act) and before incurring such debt under such plan 
     the debtor was not informed in writing in a clear and 
     conspicuous manner (or in the case of a worldwide web-based 
     solicitation to open a credit card account under such plan, 
     at the time of solicitation by the person making the 
     solicitation to open such account)--
       ``(A) of the method of determining the required minimum 
     payment amount, if a minimum payment is required that is 
     different from the amount of any finance charge, and the 
     charges or penalties, if any, which may be imposed for 
     failure by the obligor to pay the required finance charge or 
     minimum payment amount;
       ``(B) of repayment information that would apply to the 
     outstanding balance of the consumer under the credit plan, 
     including--
       ``(i) the required minimum monthly payment on that balance, 
     represented as both a dollar figure and a percentage of that 
     balance;
       ``(ii) the number of months (rounded to the nearest month) 
     that it would take to pay the entire amount of that current 
     balance if the consumer pays only the required minimum 
     monthly payments and if no further advances are made;
       ``(iii) the total cost to the consumer, including interest 
     and principal payments, of paying that balance in full if the 
     consumer pays only the required minimum monthly payments and 
     if no further advances are made; and
       (iv) the following statement: `If your current rate is a 
     temporary introductory rate, your total costs may be higher.' 
     ;
       ``(C) of the method for determining the required minimum 
     payment amount to be paid for each billing cycle, and the 
     charge or penalty, if any, to be imposed for any failure by 
     the obligor to pay the required minimum payment amount;
       ``(D) of any charge that may be imposed due to the failure 
     of the obligor to make payment on or before a required 
     payment due date, the date that payment is due or, if 
     different, the date on which a late payment fee will be 
     charged, and that the terms and conditions of such charge 
     will be stated prominently in a conspicuous location on each 
     billing statement, together with the amount of the charge to 
     be imposed if payment is made after such date; and
       ``(E) in any application or solicitation for a credit card 
     issued under such plan that offers, during an introductory 
     period of less than 1 year, an annual percentage rate of 
     interest that--
       ``(i) is less than the annual percentage rate of interest 
     which will apply after the end of such introductory period, 
     of such rate in a statement that includes the following: `The 
     annual percentage rate of interest applicable during the 
     introductory period is not the annual percentage rate which 
     will apply after the end of the introductory period. The 
     permanent annual percentage rate will apply after [insert 
     applicable date] and will be [insert applicable percentage 
     rate].'  ; or
       ``(ii) varies in accordance with an index, which is less 
     than the current annual percentage rate under the index which 
     will apply after the end of such period, of such rate in a 
     statement that includes the following: `The annual percentage 
     rate of interest applicable during the introductory period is 
     not the annual percentage rate which will apply after the end 
     of the introductory period. The permanent annual percentage 
     rate will be determined by an index and will apply after 
     [insert date]. If the index which will apply after such date 
     were applied to your account today, the annual percentage 
     rate would be [insert applicable percentage rate].' ;
       ``(11) such claim is for a debt that arose from a credit 
     card account under an open end credit plan (as defined in 
     section 103 of the Truth in Lending Act, for which account a 
     creditor imposed a fee based on inactivity for the account 
     during any period in which no advances were made if the 
     obligor maintains any outstanding balance and is charged a 
     finance charge applicable to such balance;
       ``(12) such claim is for a debt that arose from a credit 
     card account for which a credit card that was issued to or on 
     behalf of, any individual who has not attained 21 years of 
     age except in response to a written request or application to 
     the card issuer to open a credit card account containing--
       ``(A) the signature of the parent or guardian of such 
     individual indicating joint liability for debts incurred by 
     such individual in connection with the account before such 
     individual reaches the age of 21; or
       ``(B) a submission by such individual of financial 
     information indicating an independent means of repaying any 
     obligation arising from the proposed extension of credit in 
     connection with the account;
       ``(13) such claim is for a debt that arose on an account 
     that a creditor cancelled, imposed a minimum finance charge 
     for any period (including any annual period), imposed any fee 
     in lieu of a minimum finance charge, or imposed any other 
     charge or penalty with regard to such account or credit 
     extended under such account solely on the basis that any 
     credit extended has been repaid in full before the end of any 
     grace period applicable with respect to the extension of 
     credit, excluding a flat annual fee imposed on the consumer 
     in advance of any annual period to cover the cost of 
     maintaining a credit card account during such annual period 
     without regard to whether any credit is actually extended 
     under such account during such period, or the actual finance 
     charge applicable with respect to any credit extended under 
     such account during such annual period at the annual 
     percentage rate disclosed to the consumer in accordance with 
     this title for the period of time any such credit is 
     outstanding;
       ``(14) such claim is for a debt that arose from an increase 
     in any annual percentage rate of interest (other than an 
     increase due to the expiration of any introductory percentage 
     rate of interest or due solely to a change in another rate of 
     interest to which such rate is indexed) applicable to any 
     outstanding balance of credit under such plan may take effect 
     before the beginning of the billing cycle which begins not 
     less than 15 days after the obligor receives notice of such 
     increase; and
       ``(15) that if an obligor referred to in paragraph (14) 
     cancels the credit card account before the beginning of the 
     billing cycle referred to in such paragraph--
       ``(A) if the an annual percentage rate of interest 
     applicable after the cancellation with respect to such 
     outstanding balance on such account as of the date of 
     cancellation exceeds any annual percentage rate of interest 
     applicable with respect to such balance under the terms and 
     conditions in effect before the increase referred to in 
     paragraph (14); and
       ``(B) the repayment of such outstanding balance after the 
     cancellation is not subject to all other terms and conditions 
     applicable with respect to such account before the increase 
     referred to in such paragraph;
       (b) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (9) the 
     following:
       ``(9A) `credit card' includes any dual purpose or 
     multifunction card, including a stored-value card, debit 
     card, check card, check guarantee card, or purchase-price 
     discount card, that is connected with an open end credit plan 
     (as defined in section 103 of the Truth in Lending Act) and 
     can be used, either on issuance or upon later activation, to 
     obtain credit directly or indirectly.''.

     SEC. 113. PROTECTION OF SAVINGS EARMARKED FOR THE 
                   POSTSECONDARY EDUCATION OF CHILDREN.

       Section 522 of title 11, United States Code, is amended--
       (1) in subsection (b)(2)--
       (A) in subparagraph (A) by striking ``and'' at the end;
       (B) in subparagraph (B) by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(C) except as provided in paragraph (n), funds placed in 
     an education individual retirement account (as defined in 
     section 530(b)(1) of the Internal Revenue Code of 1986) not 
     less than 365 days before the date of entry of the order of 
     relief but only to the extent such funds--
       ``(i) are not pledged or promised to any entity in 
     connection with any extension of credit; and
       ``(ii) are not excess contributions (as described in 
     section 4973(e) of the Internal Revenue Code of 1986).''; and
       (2) by adding at the end the following:
       ``(n) For purposes of subsection (b)(3)(C), funds placed in 
     an education individual retirement account shall not be 
     exempt under this subsection--
       ``(1) unless the designated beneficiary of such account was 
     a dependent child of the debtor for the taxable year for 
     which the funds were placed in such account; and
       ``(2) to the extent such funds exceed--
       ``(A) $50,000 in the aggregate in all such accounts having 
     the same designated beneficiary; or
       ``(B) $100,000 in the aggregate in all such accounts 
     attributable to all such dependent children of the debtor.''.

     SEC. 114. 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 any injunction under subsection 
     (a)(2) which has arisen at the time of the failure.

[[Page H2732]]

       ``(j) An individual who is injured by the willful failure 
     of a creditor to comply with the requirements for a 
     reaffirmation agreement under subsections (c) and (d), or by 
     any willful violation of the injunction under subsection 
     (a)(2), shall be entitled to recover--
       ``(1) the greater of--
       ``(A) the amount of actual damages; or
       ``(B) $1,000; and
       ``(2) costs and attorneys' fees.''.

     SEC. 115. LIMITING TRUSTEE LIABILITY.

       (a) Qualification of Trustee.--Section 322 of title 11, 
     United States Code, is amended--
       (1) in subsection (a) by adding at the end the following:

     ``The trustee in a case under this title is not liable 
     personally or on such trustee's bond for acts taken within 
     the scope of the trustee's duties or authority as delineated 
     by other sections of this title or by order of the court, 
     except to the extent that the trustee acted with gross 
     negligence. Gross negligence shall be defined as reckless 
     indifference or deliberate disregard of the trustee's 
     fiduciary duty.''; and
       (2) in subsection (c) by inserting ``for any acts within 
     the scope of the trustee's authority defined in subsection 
     (a)'' before the period at the end.
       (b) Role and Capacity of Trustee.--Section 323 of title 11, 
     United States Code, is amended--
       (1) in subsection (b) by inserting at the end the 
     following: ``in the trustee's official capacity as 
     representative of the estate'' before the period at the end; 
     and
       (2) by adding at the end the following:
       ``(c) The trustee in a case under this title may not be 
     sued, either personally, in a representative capacity, or 
     against the trustee's bond in favor of the United States--
       ``(1) for acts taken in furtherance of the trustee's duties 
     or authority in a case in which the debtor is subsequently 
     determined to be ineligible for relief under the chapter in 
     which the trustee was appointed; or
       ``(2) for the dissemination of statistics and other 
     information regarding a case or cases, unless the trustee has 
     actual knowledge that the information is false.
       ``(d) The trustee in a case under this title may not be 
     sued in a personal capacity without leave of the bankruptcy 
     court in which the case is pending.''.

     SEC. 116. REINFORCE THE FRESH START.

       (a) Restoration of an Effective Discharge.--Section 
     523(a)(17) of title 11, United States Code, is amended--
       (1) by striking ``by a court'' and inserting ``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. 117. DISCOURAGING BAD FAITH REPEAT FILINGS.

       Section 362(c) of title 11, United States Code, is 
     amended--
       (1) in paragraph (1) by striking ``and'' at the end;
       (2) in paragraph (2) by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(3) If a single or joint case is filed by or against an 
     individual debtor under chapter 7, 11, or 13 (other than a 
     case refiled under a chapter other than chapter 7 after 
     dismissal under section 707(b) of this title), and if a 
     single or joint case of the debtor was pending within the 
     previous 1-year period but was dismissed, the stay under 
     subsection (a) with respect to any action taken with respect 
     to a debt or property securing such debt or with respect to 
     any lease will terminate with respect to the debtor on the 
     30th day after the filing of the later case. Upon motion by a 
     party in interest for continuation of the automatic stay and 
     upon notice and a hearing, the court may extend the stay in 
     particular cases as to any or all creditors (subject to such 
     conditions or limitations as the court may then impose) after 
     notice and a hearing completed before the expiration of the 
     30-day period only if the party in interest demonstrates that 
     the filing of the later case is in good faith as to the 
     creditors to be stayed. A case is presumptively filed not in 
     good faith (but such presumption may be rebutted by clear and 
     convincing evidence to the contrary)--
       ``(A) as to all creditors if--
       ``(i) more than 1 previous case under any of chapter 7, 11, 
     or 13 in which the individual was a debtor was pending within 
     such 1-year period;
       ``(ii) a previous case under any of chapters 7, 11, or 13 
     in which the individual was a debtor was dismissed within 
     such 1-year period, after the debtor failed to file or amend 
     the petition or other documents as required by this title or 
     the court without substantial excuse (but mere inadvertence 
     or negligence shall not be substantial excuse unless the 
     dismissal was caused by the negligence of the debtor's 
     attorney), failed to provide adequate protection as ordered 
     by the court, or failed to perform the terms of a plan 
     confirmed by the court; or
       ``(iii) there has not been a substantial change in the 
     financial or personal affairs of the debtor since the 
     dismissal of the next most previous case under any of 
     chapters 7, 11, or 13 of this title, or there is not any 
     other reason to conclude that the later case will be 
     concluded, if a case under chapter 7 of this title, with a 
     discharge, and if a chapter 11 or 13 case, a confirmed plan 
     which will be fully performed;
       ``(B) as to any creditor that commenced an action under 
     subsection (d) in a previous case in which the individual was 
     a debtor if, as of the date of dismissal of such case, that 
     action was still pending or had been resolved by terminating, 
     conditioning, or limiting the stay as to actions of such 
     creditor.
       ``(4) If a single or joint case is filed by or against an 
     individual debtor under this title (other than a case refiled 
     under a chapter other than chapter 7 after a dismissal under 
     section 707(b) of this title), and if 2 or more single or 
     joint cases of the debtor were pending within the previous 
     year but were dismissed, the stay under subsection (a) will 
     not go into effect upon the filing of the later case. On 
     request of a party in interest, the court shall promptly 
     enter an order confirming that no stay is in effect. If a 
     party in interest requests within 30 days of the filing of 
     the later case, the court may order the stay to take 
     effect in the case as to any or all creditors (subject to 
     such conditions or limitations as the court may impose), 
     after notice and hearing, only if the party in interest 
     demonstrates that the filing of the later case is in good 
     faith as to the creditors to be stayed. A stay imposed 
     pursuant to the preceding sentence will be effective on 
     the date of entry of the order allowing the stay to go 
     into effect. A case is presumptively not filed in good 
     faith (but such presumption may be rebutted by clear and 
     convincing evidence to the contrary)--
       ``(A) as to all creditors if--
       ``(i) 2 or more previous cases under this title in which 
     the individual was a debtor were pending within the 1-year 
     period;
       ``(ii) a previous case under this title in which the 
     individual was a debtor was dismissed within the time period 
     stated in this paragraph after the debtor failed to file or 
     amend the petition or other documents as required by this 
     title or the court without substantial excuse (but mere 
     inadvertence or negligence shall not be substantial excuse 
     unless the dismissal was caused by the negligence of the 
     debtor's attorney), failed to provide adequate protection as 
     ordered by the court, or failed to perform the terms of a 
     plan confirmed by the court; or
       ``(iii) there has not been a substantial change in the 
     financial or personal affairs of the debtor since the 
     dismissal of the next most previous case under this title, or 
     there is not any other reason to conclude that the later case 
     will be concluded, if a case under chapter 7, with a 
     discharge, and if a case under chapter 11 or 13, with a 
     confirmed plan that will be fully performed; or
       ``(B) as to any creditor that commenced an action under 
     subsection (d) in a previous case in which the individual was 
     a debtor if, as of the date of dismissal of such case, such 
     action was still pending or had been resolved by terminating, 
     conditioning, or limiting the stay as to action of such 
     creditor.''.

     SEC. 118. CURBING ABUSIVE FILINGS.

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

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

[[Page H2733]]

     prior bankruptcy case prohibiting the debtor from being a 
     debtor in another bankruptcy case.''.

     SEC. 119. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

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

     ``If the debtor fails to so act within the 45-day period, the 
     stay under section 362(a) of this title is terminated with 
     respect to the personal property of the estate or of the 
     debtor which is affected, such property 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 brought before the expiration of such 45-day 
     period, and after notice and a hearing, that such property is 
     of consequential value or benefit to the estate, orders 
     appropriate adequate protection of the creditor's interest, 
     and orders the debtor to deliver any collateral in the 
     debtor's possession to the trustee.''; and
       (2) in section 722 by inserting ``in full at the time of 
     redemption'' before the period at the end.

     SEC. 120. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES 
                   NOT COMPLETE INTENDED SURRENDER OF CONSUMER 
                   DEBT COLLATERAL.

       Title 11, United States Code, is amended as follows--
       (1) in section 362--
       (A) by striking ``(e), and (f)'' in subsection (c) and 
     inserting in lieu thereof ``(e), (f), and (h)''; and
       (B) by redesignating subsection (h) as subsection (i) and 
     by inserting after subsection (g) the following:
       ``(h) In an individual case pursuant to chapter 7, 11, or 
     13 the stay provided by subsection (a) is terminated with 
     respect to personal property of the estate or of the debtor 
     securing in whole or in part a claim, or subject to an 
     unexpired lease, and such personal property shall no longer 
     be property of the estate if the debtor fails within the 
     applicable time set by section 521(a)(2) of this title--
       ``(1) to file timely any statement of intention required 
     under section 521(a)(2) of this title with respect to that 
     property or to indicate therein that the debtor will either 
     surrender the property or retain it and, if retaining it, 
     either redeem the property pursuant to section 722 of this 
     title, reaffirm the debt it secures pursuant to section 
     524(c) of this title, or assume the unexpired lease pursuant 
     to section 365(p) of this title if the trustee does not do 
     so, as applicable; or
       ``(2) to take timely the action specified in that statement 
     of intention, as it may be amended before expiration of the 
     period for taking action, unless the statement of intention 
     specifies reaffirmation and the creditor refuses to reaffirm 
     on the original contract terms;

     unless the court determines on the motion of the trustee 
     filed before the expiration of the applicable time set by 
     section 521(a)(2), and after notice and a hearing, that such 
     property is of consequential value or benefit to the estate, 
     orders appropriate adequate protection of the creditor's 
     interest, and orders the debtor to deliver any collateral in 
     the debtor's possession to the trustee. If the court does not 
     so determine an order, the stay shall terminate upon the 
     conclusion of the proceeding on the motion.''; and
       (2) in section 521, as amended by sections 603 and 604--
       (A) in paragraph (2) by striking ``consumer'';
       (B) in paragraph (2)(B)--
       (i) by striking ``forty-five days after the filing of a 
     notice of intent under this section'' and inserting ``30 days 
     after the first date set for the meeting of creditors under 
     section 341(a) of this title''; and
       (ii) by striking ``forty-five day'' the second place it 
     appears and inserting ``30-day'';
       (C) in paragraph (2)(C) by inserting ``except as provided 
     in section 362(h) of this title'' before the semicolon; and
       (D) by inserting after subsection (b) the following:
       ``(c) If the debtor fails timely to take the action 
     specified in subsection (a)(6) of this section, or in 
     paragraphs (1) and (2) of section 362(h) of this title, with 
     respect to property which a lessor or bailor owns and has 
     leased, rented, or bailed to the debtor or as to which a 
     creditor holds a security interest not otherwise voidable 
     under section 522(f), 544, 545, 547, 548, or 549 of this 
     title, nothing in this title shall prevent or limit the 
     operation of a provision in the underlying lease or agreement 
     which has the effect of placing the debtor in default under 
     such lease or agreement by reason of the occurrence, 
     pendency, or existence of a proceeding under this title or 
     the insolvency of the debtor. Nothing in this subsection 
     shall be deemed to justify limiting such a provision in any 
     other circumstance.''.

     SEC. 121. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 
                   13.

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

     SEC. 123. FAIR VALUATION OF COLLATERAL.

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

     SEC. 124. DOMICILIARY REQUIREMENTS FOR 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'' and inserting ``or if the 
     debtor's domicile has not been located at a single State for 
     such 730-day period, the place in which the debtor's domicile 
     was located for 180 days immediately preceding the 730-day 
     period or for a longer portion of such 180-day period than in 
     any other place''.

     SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT PROPERTY OBTAINED 
                   THROUGH FRAUD.

       Section 522 of title 11, United States Code, as amended by 
     section 113, is amended--
       (1) in subsection (b)(2)(A) by inserting ``subject to 
     subsection (o),'' before ``any property''; and
       (2) by adding at the end the following:
       ``(o) For purposes of subsection (b)(3)(A) and 
     notwithstanding subsection (a), the value of an interest in--
       ``(1) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(2) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(3) a burial plot for the debtor or a dependent of the 
     debtor;

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

     SEC. 126. ROLLING STOCK EQUIPMENT.

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

     ``Sec. 1168. Rolling stock equipment

       ``(a)(1) The right of a secured party with a security 
     interest in or of a lessor or conditional vendor of equipment 
     described in paragraph (2) to take possession of such 
     equipment in compliance with an equipment security agreement, 
     lease, or conditional sale contract, and to enforce any of 
     its other rights or remedies under such security agreement, 
     lease, or conditional sale contract, to sell, lease, or 
     otherwise retain or dispose of such equipment, is not limited 
     or otherwise affected by any other provision of this title or 
     by any power of the court, except that the right to take 
     possession and enforce those other rights and remedies shall 
     be subject to section 362 of this title, if--
       ``(A) before the date that is 60 days after the date of 
     commencement of a case under this chapter, the trustee, 
     subject to the court's approval, agrees to perform all 
     obligations of the debtor under such security agreement, 
     lease, or conditional sale contract; and
       ``(B) any default, other than a default of a kind described 
     in section 365(b)(2) of this title, under such security 
     agreement, lease, or conditional sale contract--
       ``(i) that occurs before the date of commencement of the 
     case and is an event of default therewith is cured before the 
     expiration of such 60-day period;
       ``(ii) that occurs or becomes an event of default after the 
     date of commencement of the case and before the expiration of 
     such 60-day period is cured before the later of--
       ``(I) the date that is 30 days after the date of the 
     default or event of the default; or
       ``(II) the expiration of such 60-day period; and
       ``(iii) that occurs on or after the expiration of such 60-
     day period is cured in accordance with the terms of such 
     security agreement, lease, or conditional sale contract, if 
     cure is permitted under that agreement, lease, or conditional 
     sale contract.

[[Page H2734]]

       ``(2) The equipment described in this paragraph--
       ``(A) is rolling stock equipment or accessories used on 
     rolling stock equipment, including superstructures or racks, 
     that is subject to a security interest granted by, leased to, 
     or conditionally sold to a debtor; and
       ``(B) includes all records and documents relating to such 
     equipment that are required, under the terms of the security 
     agreement, lease, or conditional sale contract, that is to be 
     surrendered or returned by the debtor in connection with the 
     surrender or return of such equipment.
       ``(3) Paragraph (1) applies to a secured party, lessor, or 
     conditional vendor acting in its own behalf or acting as 
     trustee or otherwise in behalf of another party.
       ``(b) The trustee and the secured party, lessor, or 
     conditional vendor whose right to take possession is 
     protected under subsection (a) may agree, subject to the 
     court's approval, to extend the 60-day period specified in 
     subsection (a)(1).
       ``(c)(1) In any case under this chapter, the trustee shall 
     immediately surrender and return to a secured party, lessor, 
     or conditional vendor, described in subsection (a)(1), 
     equipment described in subsection (a)(2), if at any time 
     after the date of commencement of the case under this chapter 
     such secured party, lessor, or conditional vendor is entitled 
     pursuant to subsection (a)(1) to take possession of such 
     equipment and makes a written demand for such possession of 
     the trustee.
       ``(2) At such time as the trustee is required under 
     paragraph (1) to surrender and return equipment described in 
     subsection (a)(2), any lease of such equipment, and any 
     security agreement or conditional sale contract relating to 
     such equipment, if such security agreement or conditional 
     sale contract is an executory contract, shall be deemed 
     rejected.
       ``(d) With respect to equipment first placed in service on 
     or prior to October 22, 1994, for purposes of this section--
       ``(1) the term `lease' includes any written agreement with 
     respect to which the lessor and the debtor, as lessee, have 
     expressed in the agreement or in a substantially 
     contemporaneous writing that the agreement is to be treated 
     as a lease for Federal income tax purposes; and
       ``(2) the term `security interest' means a purchase-money 
     equipment security interest.
       ``(e) With respect to equipment first placed in service 
     after October 22, 1994, for purposes of this section, the 
     term `rolling stock equipment' includes rolling stock 
     equipment that is substantially rebuilt and accessories used 
     on such equipment.''.
       (b) Aircraft Equipment and Vessels.--Section 1110 of title 
     11, United States Code, is amended to read as follows:

     ``Sec. 1110. Aircraft equipment and vessels

       ``(a)(1) Except as provided in paragraph (2) and subject to 
     subsection (b), the right of a secured party with a security 
     interest in equipment described in paragraph (3), or of a 
     lessor or conditional vendor of such equipment, to take 
     possession of such equipment in compliance with a security 
     agreement, lease, or conditional sale contract, and to 
     enforce any of its other rights or remedies, under such 
     security agreement, lease, or conditional sale contract, to 
     sell, lease, or otherwise retain or dispose of such 
     equipment, is not limited or otherwise affected by any other 
     provision of this title or by any power of the court.
       ``(2) The right to take possession and to enforce the other 
     rights and remedies described in paragraph (1) shall be 
     subject to section 362 of this title if--
       ``(A) before the date that is 60 days after the date of the 
     order for relief under this chapter, the trustee, subject to 
     the approval of the court, agrees to perform all obligations 
     of the debtor under such security agreement, lease, or 
     conditional sale contract; and
       ``(B) any default, other than a default of a kind specified 
     in section 365(b)(2) of this title, under such security 
     agreement, lease, or conditional sale contract--
       ``(i) that occurs before the date of the order is cured 
     before the expiration of such 60-day period;
       ``(ii) that occurs after the date of the order and before 
     the expiration of such 60-day period is cured before the 
     later of--
       ``(I) the date that is 30 days after the date of the 
     default; or
       ``(II) the expiration of such 60-day period; and
       ``(iii) that occurs on or after the expiration of such 60-
     day period is cured in compliance with the terms of such 
     security agreement, lease, or conditional sale contract, if a 
     cure is permitted under that agreement, lease, or contract.
       ``(3) The equipment described in this paragraph--
       ``(A) is--
       ``(i) an aircraft, aircraft engine, propeller, appliance, 
     or spare part (as defined in section 40102 of title 49) that 
     is subject to a security interest granted by, leased to, or 
     conditionally sold to a debtor that, at the time such 
     transaction is entered into, holds an air carrier operating 
     certificate issued pursuant to chapter 447 of title 49 for 
     aircraft capable of carrying 10 or more individuals or 6,000 
     pounds or more of cargo; or
       ``(ii) a documented vessel (as defined in section 30101(1) 
     of title 46) that is subject to a security interest granted 
     by, leased to, or conditionally sold to a debtor that is a 
     water carrier that, at the time such transaction is entered 
     into, holds a certificate of public convenience and necessity 
     or permit issued by the Department of Transportation; and
       ``(B) includes all records and documents relating to such 
     equipment that are required, under the terms of the security 
     agreement, lease, or conditional sale contract, to be 
     surrendered or returned by the debtor in connection with the 
     surrender or return of such equipment.
       ``(4) Paragraph (1) applies to a secured party, lessor, or 
     conditional vendor acting in its own behalf or acting as 
     trustee or otherwise in behalf of another party.
       ``(b) The trustee and the secured party, lessor, or 
     conditional vendor whose right to take possession is 
     protected under subsection (a) may agree, subject to the 
     approval of the court, to extend the 60-day period specified 
     in subsection (a)(1).
       ``(c)(1) In any case under this chapter, the trustee shall 
     immediately surrender and return to a secured party, lessor, 
     or conditional vendor, described in subsection (a)(1), 
     equipment described in subsection (a)(3), if at any time 
     after the date of the order for relief under this chapter 
     such secured party, lessor, or conditional vendor is entitled 
     pursuant to subsection (a)(1) to take possession of such 
     equipment and makes a written demand for such possession to 
     the trustee.
       ``(2) At such time as the trustee is required under 
     paragraph (1) to surrender and return equipment described in 
     subsection (a)(3), any lease of such equipment, and any 
     security agreement or conditional sale contract relating to 
     such equipment, if such security agreement or conditional 
     sale contract is an executory contract, shall be deemed 
     rejected.
       ``(d) With respect to equipment first placed in service on 
     or before October 22, 1994, for purposes of this section--
       ``(1) the term `lease' includes any written agreement with 
     respect to which the lessor and the debtor, as lessee, have 
     expressed in the agreement or in a substantially 
     contemporaneous writing that the agreement is to be treated 
     as a lease for Federal income tax purposes; and
       ``(2) the term `security interest' means a purchase-money 
     equipment security interest.''.

     SEC. 127. DISCHARGE UNDER CHAPTER 13.

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

     SEC. 128. 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 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

[[Page H2735]]

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

     SEC. 129. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES 
                   CODE.

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

     SEC. 131. APPLICATION OF THE CODEBTOR STAY ONLY WHEN THE STAY 
                   PROTECTS THE DEBTOR.

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

     SEC. 132. ADEQUATE PROTECTION FOR INVESTORS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (48) the 
     following:
       ``(48A) `securities self regulatory organization' means 
     either a securities association registered with the 
     Securities and Exchange Commission pursuant to section 15A of 
     the Securities Exchange Act of 1934 or a national securities 
     exchange registered with the Securities and Exchange 
     Commission pursuant to section 6 of the Securities Exchange 
     Act of 1934;''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by section 118, is amended--
       (1) in paragraph (19) by striking ``or'' at the end;
       (2) in paragraph (20) by striking the period at the end and 
     a inserting ``; or''; and
       (3) by inserting after paragraph (20) the following:
       ``(21) under subsection (a), of the commencement or 
     continuation of an investigation or action by a securities 
     self regulatory organization to enforce such organization's 
     regulatory power; of the enforcement of an order or decision, 
     other than for monetary sanctions, obtained in an action by 
     the securities self regulatory organization to enforce such 
     organization's regulatory power; or of any act taken by the 
     securities self regulatory organization to delist, delete, or 
     refuse to permit quotation of any stock that does not meet 
     applicable regulatory requirements.''.

     SEC. 134. GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL 
                   PROPERTY BY ASSUMPTION.

       Section 365 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(p)(1) If a lease of personal property is rejected or not 
     timely assumed by the trustee under subsection (d), the 
     leased property is no longer property of the estate and the 
     stay under section 362(a) of this title is automatically 
     terminated.
       ``(2) In the case of an individual under chapter 7, the 
     debtor may notify the creditor in writing that the debtor 
     desires to assume the lease. Upon being so notified, the 
     creditor may, at its option, notify the debtor that it is 
     willing to have the lease assumed by the debtor and may, at 
     its option, condition such assumption on cure of any 
     outstanding default on terms set by the contract. If within 
     30 days of the notice from the creditor the debtor notifies 
     the lessor in writing that the lease is assumed, the 
     liability under the lease will be assumed by the debtor and 
     not by the estate. The stay under section 362 of this title 
     and the injunction under section 524(a) of this title shall 
     not be violated by notification of the debtor and negotiation 
     of cure under this subsection. Nothing in this paragraph 
     shall require a debtor to assume a lease, or a creditor to 
     permit assumption.
       ``(3) In a case under chapter 11 of this title in which the 
     debtor is an individual and in a case under chapter 13 of 
     this title, if the debtor is the lessee with respect to 
     personal property and the lease is not assumed in the plan 
     confirmed by the court, the lease is deemed rejected as of 
     the conclusion of the hearing on confirmation. If the lease 
     is rejected, the stay under section 362 of this title and any 
     stay under section 1301 is automatically terminated with 
     respect to the property subject to the lease.''.

     SEC. 135. ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY 
                   SECURED CREDITORS.

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

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

       ``(a)(1)(A) On or before the date that is 30 days after the 
     filing of a case under this chapter, the debtor shall make 
     cash payments in an amount determined under paragraph (2), 
     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 required under subparagraph (A) 
     until the earlier of the date on which--
       ``(i) the creditor begins to receive actual payments under 
     the plan; or
       ``(ii) the debtor relinquishes possession of the property 
     referred to in subparagraph (A) to--
       ``(I) the lessor or creditor; or
       ``(II) any third party acting under claim of right, as 
     applicable.
       ``(2) The payments referred to in paragraph (1)(A) shall be 
     the contract amount and shall reduce any amount payable under 
     section 1326(a) of the title.
       ``(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).

[[Page H2736]]

       ``(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 scheduled as payable under 
     the contract between the debtor and creditor.
       ``(c) Notwithstanding section 1326(b), the payments 
     referred to in subsection (a)(1)(A) shall be continued in 
     addition to plan payments under a confirmed plan until actual 
     payments to the creditor begin under that plan, if the 
     confirmed plan provides--
       ``(1) for payments to a creditor or lessor described in 
     subsection (a)(1); and
       ``(2) for the deferral of payments to such creditor or 
     lessor under the plan until the payment of amounts described 
     in section 1326(b).
       ``(d) Notwithstanding sections 362, 542, and 543, a lessor 
     or creditor described in subsection (a) may retain possession 
     of property described in that subsection that was obtained in 
     accordance with applicable law before the date of filing of 
     the petition until the first payment under subsection 
     (a)(1)(A) is received by the lessor or creditor.
       ``(e) On or before 60 days after the filling of a case 
     under this chapter, a debtor retaining possession of personal 
     property subject to a lease or securing a claim attributable 
     in whole or in part to the purchase price of such property 
     shall provide each creditor or lessor reasonable evidence of 
     the maintenance of any required insurance coverage with 
     respect to the use or ownership of such property and continue 
     to do so for so long as the debtor retains possession of such 
     property.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 13 of title 11, United States Code, is 
     amended by inserting after the item relating to section 1307 
     the following:

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

     SEC. 136. AUTOMATIC STAY.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 118 and 132, is amended--
       (1) in paragraph (20), by striking ``or'' at the end;
       (2) in paragraph (21), by striking the period at the end 
     and inserting a semicolon; and
       (3) by inserting after paragraph (21) the following:
       ``(22) under subsection (a) of any transfer that is not 
     avoidable under section 544 of this title and that is not 
     avoidable under section 549 of this title; or
       ``(23) under subsection (a)(3), of eviction actions based 
     on endangerment to property or person or the use of illegal 
     drugs.''.

     SEC. 137. EXTEND PERIOD BETWEEN BANKRUPTCY DISCHARGES.

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

     SEC. 139. 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:
       ``(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. 142. 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 (a)(15)--
       (A) by inserting ``or'' after ``court of record,'';
       (B) by striking ``unless--'' and all that follows through 
     ``debtor'' the last place it appears; and
       (3) in subsection (c), by striking ``(6), or (15)'' each 
     place it appears and inserting ``or (6)''.

     SEC. 143. 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. 144. 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. 145. CLARIFICATION OF MEANING OF HOUSEHOLD GOODS.

       Section 101 of title 11, United States Code, is amended by 
     inserting after paragraph (27) the following:
       ``(27A) `household goods' includes tangible personal 
     property normally found in or around a residence, but does 
     not include motorized vehicles used for transportation 
     purposes;''.

     SEC. 147. MONETARY LIMITATION ON CERTAIN EXEMPT PROPERTY.

       Section 522 of title 11, United States Code, as amended by 
     section 125, is amended--
       (1) in subsection (b)(2)(A) by striking ``subsection (o)'' 
     and inserting ``subsections (o) and (p)'' before ``any 
     property''; and
       (2) by adding at the end the following:
       ``(p)(1) Except as provided in paragraphs (2) and (3), as a 
     result of electing under subsection (b)(3)(A) to exempt 
     property under State or local law, a debtor may not exempt 
     any interest that exceeds $250,000 in value, in the 
     aggregate, in--
       ``(A) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(B) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(C) a burial plot for the debtor or a dependent of the 
     debtor.
       ``(2) The limitation under paragraph (1) shall not apply to 
     an exemption claimed under subsection (b)(3)(A) by a family 
     farmer for the principal residence of that farmer.
       ``(3) Paragraph (1) shall not apply to debtors if 
     applicable State law expressly provides by a statute enacted 
     after the effective date of this paragraph that such 
     paragraph shall not apply to debtors.''.

     SEC. 148. BANKRUPTCY FEES.

       Section 1930 of title 28, United States Code, is amended--
       (1) in subsection (a) by striking ``Notwithstanding section 
     1915 of this title, the'' and inserting ``The''; and
       (2) by adding at the end the following:
       ``(f)(1) Pursuant to procedures prescribed by the Judicial 
     Conference of the United States, the district court or the 
     bankruptcy court may waive the filing fee in a case under 
     chapter 7 of title 11 for an individual debtor who is unable 
     to pay such fee in installments. For purposes of this 
     paragraph, the term `filing fee' means the filing fee 
     required by subsection (a), or any other fee prescribed by 
     the Judicial Conference under subsections (b) and (c) that is 
     payable to the clerk upon the commencement of a case under 
     chapter 7 of title 11.
       ``(2) The district court or the bankruptcy court may also 
     waive for such debtors other fees prescribed pursuant to 
     subsections (b) and (c).
       ``(3) This subsection does not restrict the district court 
     or the bankruptcy court from waiving, in accordance with 
     Judicial Conference policy, fees prescribed pursuant to such 
     subsections for other debtors and creditors.''.

     SEC. 149. COLLECTION OF CHILD SUPPORT.

       (a) Duties of Trustee Under Chapter 7.--Section 704 of 
     title 11, United States Code, as amended by section 102, is 
     amended--
       (1) by inserting ``(a)'' before ``The trustee'',
       (2) in paragraph (9) by striking ``and'' at the end,
       (3) in paragraph (10) by striking the period and inserting 
     ``; and'', and
       (4) by adding at the end the following:
       ``(11) 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) of this title, provide the applicable 
     notification specified in subsection (b).
       ``(b)(1) In any case described in subsection (a)(11), the 
     trustee shall--
       ``(A)(i) notify in writing the holder of the claim of the 
     right of such holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act 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;

[[Page H2737]]

       ``(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 of this title, notify the holder of such 
     claim and the State child support agency of the State in 
     which such 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 that is not discharged under 
     paragraph (2), (4), or (14A) of section 523(a) of this title 
     or that was reaffirmed by the debtor under section 524(c) of 
     this title.
       ``(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, such holder or such agency may request from a 
     creditor described in paragraph (1)(B)(iii)(III) 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 such disclosure.''.
       (b) Duties of Trustee Under Chapter 13.--Section 1302 of 
     title 11, United States Code, 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 507(a)(1) of this title, provide the applicable 
     notification specified in subsection (d).'', and
       (2) 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 such holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act 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 of this title, notify the holder of the 
     claim and the State child support agency of the State in 
     which such 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 that is not discharged under 
     paragraph (2), (4), or (14A) of section 523(a) of this title 
     or that was reaffirmed by the debtor under section 524(c) of 
     this title.
       ``(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, such holder or such agency may request from a 
     creditor described in paragraph (1)(B)(iii) 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 such disclosure.''.

     SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT 
                   CONTRIBUTIONS AND OTHER PROPERTY FROM THE 
                   ESTATE.

       (a) In General.--Section 541(b) of title 11 of the United 
     States Code is amended--
       (1) by striking ``or'' at the end of paragraph (4)(B)(ii);
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``; or''; and
       (3) by inserting after paragraph (5) the following:
       ``(7) any amount or interest in property to the extent that 
     an employer has withheld amounts from the wages of employees 
     for contribution to an employee benefit plan subject to title 
     I of the Employee Retirement Income Security Act of 1974, or 
     to the extent that the employer has received amounts as a 
     result of payments by participants or beneficiaries to an 
     employer for contribution to an employee benefit plan subject 
     to title I of the Employee Retirement Income Security Act of 
     1974.''.
       (b) Application of Amendment.--The amendment made by this 
     section shall not apply to cases commenced under title 11 of 
     the United States Code before the expiration of the 180-day 
     period beginning on the date of the enactment of this Act.

     SEC. 151. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.

       Section 503(b)(1)(A) of title 11, United States Code, is 
     amended to read as follows:
       ``(A) the actual, necessary costs and expenses of 
     preserving the estate, including wages, salaries, or 
     commissions for services rendered after the commencement of 
     the case, and wages and benefits attributable to any period 
     of time after commencement of the case as a result of the 
     debtor's violation of Federal law, without regard to when the 
     original unlawful act occurred or to whether any services 
     were rendered;''.

     SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT 
                   OBLIGATION PROCEEDINGS.

       Section 362(b)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A) by striking ``or'' at the end;
       (2) in subparagraph (B) by adding ``or'' at the end; and
       (3) by adding at the end the following:
       ``(C) under subsection (a) of--
       ``(i) the withholding of income for payment of a domestic 
     support obligation pursuant to a judicial or administrative 
     order or statute for such obligation that first becomes 
     payable after the date on which the petition is filed; or
       ``(ii) the withholding of income for payment of a domestic 
     support obligation owed directly to the spouse, former spouse 
     or child of the debtor or the parent of such child, pursuant 
     to a judicial or administrative order or statute for such 
     obligation that becomes payable before the date on which the 
     petition is filed unless the court finds, after notice and 
     hearing, that such withholding would render the plan 
     infeasible;''.

     SEC. 153. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS 
                   AGAINST THE DEBTOR.

       Section 362(b)(2) of title 11, United States Code, as 
     amended by section 153, is amended--
       (1) in subparagraph (B) by striking ``or'' at the end;
       (2) by inserting after subparagraph (C) the following:
       ``(D) the commencement or continuation of a proceeding 
     concerning a child custody or visitation;
       ``(E) the commencement or continuation of a proceeding 
     alleging domestic violence; or
       ``(F) the commencement or continuation of a proceeding 
     seeking a dissolution of marriage, except to the extent the 
     proceeding concerns property of the estate;''.

     SEC. 154. 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. 155. 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 first 
     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 ``, after 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 that are due on or after the date the petition was 
     filed have been paid, and after 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 that are due before the date on which the petition was 
     filed if such amounts are due solely to a spouse, former 
     spouse or child of the debtor or the parent of such child 
     pursuant to a judicial or administrative order, unless the 
     holder of such claim agrees to a different treatment of such 
     claim'' after ``completion by the debtor of all payments 
     under the plan''.

[[Page H2738]]

     SEC. 156. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT 
                   OBLIGATION PROCEEDINGS.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 104 and 606, is amended--
       (1) amending paragraph (2) to read as follows:
       ``(2) under subsection (a)--
       ``(A) of the commencement or continuation of an action or 
     proceeding for--
       ``(i) the establishment of paternity as a part of an effort 
     to collect domestic support obligations; or
       ``(ii) the establishment or modification of an order for 
     domestic support obligations; or
       ``(B) the collection of a domestic support obligation from 
     property that is not property of the estate; or
       ``(C) under subsection (a) of--
       ``(i) the withholding of income for payment of a domestic 
     support obligation pursuant to a judicial or administrative 
     order or statute for such obligation that first becomes 
     payable after the date on which the petition is filed; or
       ``(ii) the withholding of income for payment of a domestic 
     support obligation owed directly to the spouse, former spouse 
     or child of the debtor or the parent of such child, pursuant 
     to a judicial or administrative order or statute for such 
     obligation that becomes payable before the date on which the 
     petition is filed unless the court finds, after notice and 
     hearing, that such withholding would render the plan 
     infeasible;'';
       (2) in paragraph (19), by striking ``or'' at the end;
       (3) in paragraph (20), by striking the period at the end 
     and inserting a semicolon; and
       (4) by inserting after paragraph (20) the following:
       ``(21) under subsection (a) with respect to--
       ``(A) the withholding, suspension, or restriction of 
     drivers' licenses, professional and occupational licenses, 
     and recreational licenses pursuant to State law, as specified 
     in section 466(a)(16) of the Social Security Act (42 U.S.C. 
     666(a)(16)) or with respect to the reporting of overdue 
     support owed by an absent parent to any consumer reporting 
     agency as specified in section 466(a)(7) of the Social 
     Security Act (42 U.S.C. 666(a)(7)) if such debt is payable 
     solely to a spouse, former spouse or child of the debtor or 
     the parent of such child pursuant to a judicial or 
     administrative order or statute, unless the holder of such 
     claim agrees to waive such withholding, suspension or 
     restriction;
       ``(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)) if such tax refund is payable 
     solely to a spouse, former spouse or child of the debtor or 
     the parent of such child pursuant to a judicial or 
     administrative order or statute; 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. 157. EXEMPTION FOR RIGHT TO RECEIVE CERTAIN ALIMONY, 
                   MAINTENANCE, OR SUPPORT.

       Section 522(b)(3) of title 11, United States Code, as so 
     redesignated and amended by sections 115 and 203, is 
     amended--
       (1) in subparagraph (C) by striking ``and'' at the end,
       (2) in subparagraph (D) by striking the period at the end 
     and inserting ``; and'', and
       (3) by inserting after subparagraph (D) the following:
       ``(E) the right to receive--
       ``(i) alimony, maintenance , support, or property traceable 
     to alimony, maintenance , support; or
       ``(ii) amounts payable as a result of a property settlement 
     agreement with the debtor's spouse or former spouse; or of an 
     interlocutory or final divorce decree;

     to the extent reasonably necessary for the support of the 
     debtor or a dependent of the debtor.''.

     SEC. 158. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS 
                   AGAINST THE DEBTOR.

       Section 362(b)(2) of title 11, United States Code, as 
     amended by section 156, is amended--
       (1) in subparagraph (A) by striking ``or'' at the end;
       (2) by inserting after subparagraph (B) the following:
       ``(C) the commencement or continuation of a proceeding 
     concerning a child custody or visitation;
       ``(D) the commencement or continuation of a proceeding 
     alleging domestic violence; or
       ``(E) the commencement or continuation of a proceeding 
     seeking a dissolution of marriage, except to the extent the 
     proceeding concerns property of the estate;''.

                TITLE II--DISCOURAGING BANKRUPTCY ABUSE

     SEC. 201. REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--(1) Chapter 12 of title 11 of the United 
     States Code, as in effect on September 30, 1999, is hereby 
     reenacted.
       (2) Paragraph (1) shall take effect on September 30, 1999.
       (b) Contents of Chapter 12 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''.
       (c) 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''.
       (d) Expanded definition of family farmer.--Section 101(18) 
     of title 11, United States Code, is amended--
       (1) in subparagraph (A)--
       (A) by striking ``$1,500,000'' and inserting 
     ``$3,000,000'';
       (B) by striking ``80'' and inserting ``50''; and
       (C) by striking ``the taxable year preceding the taxable 
     year'' and inserting ``at least 1 of the 3 taxable years 
     preceding the taxable year''; and
       (2) in subparagraph (B)--
       (A) in clause (i), by striking ``80'' and inserting ``50''; 
     and
       (B) in clause (ii), by striking ``$1,500,000'' and 
     inserting ``$3,000,000''.
       (e) 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. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.

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

     SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

       (a) In General.--Section 522 of title 11, United States 
     Code, as amended by sections 113, 125, and 147 is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)--
       (i) by striking ``(2)(A)'' and inserting:
       ``(3) Property listed in this paragraph is--
       ``(A) subject to subsections (o) and (p),'';
       (ii) in subparagraph (B), by striking ``and'' at the end;
       (iii) in subparagraph (C), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(D) retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.'';
       (B) by striking paragraph (1) and inserting:
       ``(2) Property listed in this paragraph is property that is 
     specified under subsection (d), unless the State law that is 
     applicable to the debtor under paragraph (3)(A) specifically 
     does not so authorize.'';
       (C) in the matter preceding paragraph (2)--
       (i) by striking ``(b)'' and inserting ``(b)(1)'';
       (ii) by striking ``paragraph (2)'' both places it appears 
     and inserting ``paragraph (3)'';
       (iii) by striking ``paragraph (1)'' each place it appears 
     and inserting ``paragraph (2)''; and
       (iv) by striking ``Such property is--''; and
       (D) by adding at the end of the subsection the following:
       ``(4) For purposes of paragraph (3)(D) and subsection 
     (d)(12), the following shall apply:
       ``(A) If the retirement funds are in a retirement fund that 
     has received a favorable determination pursuant to section 
     7805 of the Internal Revenue Code of 1986, and that 
     determination is in effect as of the date of the commencement 
     of the case under section 301, 302, or 303 of this title, 
     those funds shall be presumed to be exempt from the estate.
       ``(B) If the retirement funds are in a retirement fund that 
     has not received a favorable determination pursuant to such 
     section 7805, those funds are exempt from the estate if the 
     debtor demonstrates that--
       ``(i) no prior determination to the contrary has been made 
     by a court or the Internal Revenue Service; and
       ``(ii) the retirement fund is in substantial compliance 
     with the applicable requirements of the Internal Revenue Code 
     of 1986.
       ``(C) A direct transfer of retirement funds from 1 fund or 
     account that is exempt from taxation under section 401, 403, 
     408, 408A, 414, 457, or 501(a) of the Internal Revenue Code 
     of 1986, pursuant to section 401(a)(31) of the Internal 
     Revenue Code of 1986, or otherwise, shall not cease to 
     qualify for exemption under paragraph (3)(D) or subsection 
     (d)(12) by reason of that direct transfer.
       ``(D)(i) Any distribution that qualifies as an eligible 
     rollover distribution within the meaning of section 402(c) of 
     the Internal Revenue Code of 1986 or that is described in 
     clause (ii) shall not cease to qualify for exemption under 
     paragraph (3)(D) or subsection (d)(12) by reason of that 
     distribution.
       ``(ii) A distribution described in this clause is an amount 
     that--

[[Page H2739]]

       ``(I) has been distributed from a fund or account that is 
     exempt from taxation under section 401, 403, 408, 408A, 414, 
     457, or 501(a) of the Internal Revenue Code of 1986; and
       ``(II) to the extent allowed by law, is deposited in such a 
     fund or account not later than 60 days after the distribution 
     of that amount.''; and
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``subsection (b)(1)'' and inserting ``subsection (b)(2)''; 
     and
       (B) by adding at the end the following:
       ``(12) Retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by sections 118, 132, 136, and 141 is 
     amended--
       (1) in paragraph (27), by striking ``or'' at the end;
       (2) in paragraph (28), by striking the period and inserting 
     ``; or'';
       (3) by inserting after paragraph (28) the following:
       ``(29) under subsection (a), of withholding of income from 
     a debtor's wages and collection of amounts withheld, pursuant 
     to the debtor's agreement authorizing that withholding and 
     collection for the benefit of a pension, profit-sharing, 
     stock bonus, or other plan established under section 401, 
     403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue 
     Code of 1986 that is sponsored by the employer of the debtor, 
     or an affiliate, successor, or predecessor of such employer--
       ``(A) to the extent that the amounts withheld and collected 
     are used solely for payments relating to a loan from a plan 
     that satisfies the requirements of section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974 or is subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) in the case of a loan from a thrift savings plan 
     described in subchapter III of title 5, that satisfies the 
     requirements of section 8433(g) of such title.''; and
       (4) by adding at the end of the flush material following 
     paragraph (29) the following: ``Paragraph (29) does not apply 
     to any amount owed to a plan referred to in that paragraph 
     that is incurred under a loan made during the 1-year period 
     preceding the filing of a petition. Nothing in paragraph (29) 
     may be construed to provide that any loan made under a 
     governmental plan under section 414(d), or a contract or 
     account under section 403(b), of the Internal Revenue Code of 
     1986 constitutes a claim or a debt under this title.''.
       (c) Exceptions to Discharge.--Section 523(a) of title 11, 
     United States Code, is amended--
       (1) by striking ``or'' at the end of paragraph (17);
       (2) by striking the period at the end of paragraph (18) and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(19) owed to a pension, profit-sharing, stock bonus, or 
     other plan established under section 401, 403, 408, 408A, 
     414, 457, or 501(c) of the Internal Revenue Code of 1986, 
     pursuant to--
       ``(A) a loan permitted under section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974) or subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) a loan from the thrift savings plan described in 
     subchapter III of title 5, that satisfies the requirements of 
     section 8433(g) of such title.

     Paragraph (19) does not apply to any amount owed to a plan 
     referred to in that paragraph that is incurred under a loan 
     made during the 1-year period preceding the filing of a 
     petition. Nothing in paragraph (19) may be construed to 
     provide that any loan made under a governmental plan under 
     section 414(d), or a contract or account under section 
     403(b), of the Internal Revenue Code of 1986 constitutes a 
     claim or a debt under this title.''.
       (d) Plan Contents.--Section 1322 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(f) A plan may not materially alter the terms of a loan 
     described in section 362(b)(29) of this title.''.

     SEC. 204. PROTECTION OF REFINANCE OF SECURITY INTEREST.

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

     SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

       Section 365(d)(4) of title 11, United States Code, is 
     amended to read as follows:
       ``(4)(A) Subject to subparagraph (B), in any case under any 
     chapter in 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 
     such 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)(i) The court may extend the period determined under 
     subparagraph (A) for 120 days upon motion of the trustee or 
     the lessor for cause.
       ``(ii) If the court grants an extension under clause (i), 
     the court may grant a subsequent extension only upon prior 
     written consent of the lessor.''.

     SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

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

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

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

     SEC. 208. LIMITATION.

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

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

       Section 330(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (3)--
       (A) in subparagraph (A) after ``awarded'', by inserting 
     ``to an examiner, chapter 11 trustee, or professional 
     person''; and
       (B) by redesignating subdivisions (A) through (E) as 
     clauses (i) through (iv), respectively; and
       (2) 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. 210. POSTPETITION DISCLOSURE AND SOLICITATION.

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

     SEC. 211. PREFERENCES.

       Section 547(c) of title 11, United States Code, is 
     amended--
       (1) by amending paragraph (2) to read as follows:
       ``(2) to the extent that such transfer was in payment of a 
     debt incurred by the debtor in the ordinary course of 
     business or financial affairs of the debtor and the 
     transferee, and such transfer was--
       ``(A) made in the ordinary course of business or financial 
     affairs of the debtor and the transferee; or
       ``(B) made according to ordinary business terms;'';
       (2) in paragraph (7) by striking ``or'' at the end;
       (3) in paragraph (8) by striking the period at the end and 
     inserting ``; or''; and
       (4) by adding at the end the following:
       ``(9) if, in a case filed by a debtor whose debts are not 
     primarily consumer debts, the aggregate value of all property 
     that constitutes or is affected by such transfer is less than 
     $5,000.''.

     SEC. 212. VENUE OF CERTAIN PROCEEDINGS.

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

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

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

     SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

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

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

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

     ``Sec. 304. Cases ancillary to foreign proceedings

       ``(a) For purposes of this section--
       ``(1) the term `domestic insurance company' means a 
     domestic insurance company, as such term is used in section 
     109(b)(2);
       ``(2) the term `foreign insurance company' means a foreign 
     insurance company, as such term is used in section 109(b)(3);

[[Page H2740]]

       ``(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--
       ``(A) a United States claimant; or
       ``(B) any business entity that operates in the United 
     States and that is a creditor; and
       ``(5) the term `United States policyholder' means a holder 
     of an insurance policy issued in the United States.
       ``(b) The court may not grant relief under chapter 15 of 
     this title with respect to any deposit, escrow, trust fund, 
     or other security required or permitted under any applicable 
     State insurance law or regulation for the benefit of claim 
     holders in the United States.''.

     SEC. 216. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

       (a) Executory Contracts and Unexpired Leases.--Section 365 
     of title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)(A) by striking the semicolon at the 
     end and inserting the following:

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

     SEC. 217. SHARING OF COMPENSATION.

       Section 504 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(c) This section shall not apply with respect to sharing, 
     or agreeing to share, compensation with a bona fide public 
     service attorney referral program that operates in accordance 
     with non-Federal law regulating attorney referral services 
     and with rules of professional responsibility applicable to 
     attorney acceptance of referrals.''.

     SEC. 218. PRIORITY FOR ADMINISTRATIVE EXPENSES.

       Section 503(b) of title 11, United States Code, is 
     amended--
       (1) by deleting ``and'' at the end of paragraph (5);
       (2) by striking the period at the end of paragraph (6) and 
     inserting ``; and'';
       (3) by inserting the following after paragraph (6):
       ``(7) with respect to a nonresidential real property lease 
     previously assumed under section 365, and subsequently 
     rejected, a sum equal to all monetary obligations due, 
     excluding those arising from or relating to a failure to 
     operate or penalty provisions, for the period of one year 
     following the later of the rejection date or date of actual 
     turnover of the premises, without reduction or setoff for any 
     reason whatsoever except for sums actually received or to be 
     received from a nondebtor; and the claim for remaining sums 
     due for the balance of the term of the lease shall be a claim 
     under section 502(b)(6).''.

           TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS

     SEC. 301. DEFINITION OF DISINTERESTED PERSON.

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

     SEC. 302. MISCELLANEOUS IMPROVEMENTS.

       (a) Who May Be a Debtor.--Section 109 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(h)(1) Subject to paragraphs (2) and (3) and 
     notwithstanding any other provision of this section, an 
     individual may not be a debtor under this title unless that 
     individual has, during the 90-day period preceding the date 
     of filing of the petition of that individual, received credit 
     counseling, including, at a minimum, participation in an 
     individual or group briefing that outlined the opportunities 
     for available credit counseling and assisted that individual 
     in performing an initial budget analysis, through a credit 
     counseling program (offered through an approved credit 
     counseling service described in section 111(a)).
       ``(2)(A) Paragraph (1) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee or bankruptcy administrator of the bankruptcy court 
     of that district determines that the approved credit 
     counseling services for that district are not reasonably able 
     to provide adequate services to the additional individuals 
     who would otherwise seek credit counseling from those 
     programs by reason of the requirements of paragraph (1).
       ``(B) Each United States trustee or bankruptcy 
     administrator that makes a determination described in 
     subparagraph (A) shall review that determination not later 
     than one year after the date of that determination, and not 
     less frequently than every year thereafter.
       ``(3)(A) Subject to subparagraph (B), the requirements of 
     paragraph (1) shall not apply with respect to a debtor who 
     submits to the court a certification that--
       ``(i) describes exigent circumstances that merit a waiver 
     of the requirements of paragraph (1);
       ``(ii) states that the debtor requested credit counseling 
     services from an approved credit counseling service, but was 
     unable to obtain the services referred to in paragraph (1) 
     during the 5-day period beginning on the date on which the 
     debtor made that request or that the exigent circumstances 
     require filing before such 5-day period expires; 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 unless the 
     debtor 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 provide service to the additional 
     individuals who would be required to compete the 
     instructional course by reason of the requirements of this 
     section. Each United States trustee or bankruptcy 
     administrator that makes such a determination shall review 
     that determination not later than 1 year after the date of 
     that determination, and not less frequently than every year 
     thereafter.''.
       (c) Chapter 13 Discharge.--Section 1328 of title 11, United 
     States Code, as amended by section 137, 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 provide service to 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

[[Page H2741]]

     year after the date of that determination, and not less 
     frequently than every year thereafter.''.
       (d) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 604 and 120, is amended 
     by adding at the end the following:
       ``(d) In addition to the requirements under subsection (a), 
     an individual debtor shall file with the court--
       ``(1) a certificate from the credit counseling service that 
     provided the debtor services under section 109(h); and
       ``(2) a copy of the debt repayment plan, if any, developed 
     under section 109(h) through the credit counseling service 
     referred to in paragraph (1).''.
       (e) 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

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

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

       (e) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (13) the following:
       ``(13A) `debtor's principal residence' means a residential 
     structure including incidental property when the structure 
     contains 1 to 4 units, whether or not that structure is 
     attached to real property, and includes, without limitation, 
     an individual condominium or cooperative unit or mobile or 
     manufactured home or trailer;'';
       (2) by inserting after paragraph (27A), as added by section 
     318 of this Act, the following:
       ``(27B) `incidental property' means property incidental to 
     such residence including, without limitation, property 
     commonly conveyed with a principal residence where the real 
     estate is located, window treatments, carpets, appliances and 
     equipment located in the residence, and easements, 
     appurtenances, fixtures, rents, royalties, mineral rights, 
     oil and gas rights, escrow funds and insurance proceeds;'';
       (3) in section 362(b), as amended by sections 117, 118, 
     132, 136, 141 203, 818, and 1007,--
       (A) in paragraph (28) by striking ``or'' at the end 
     thereof;
       (B) in paragraph (29) by striking the period at the end and 
     inserting ``; or''; and
       (C) by inserting after paragraph (29) the following:
       ``(30) under subsection (a), until a prepetition default is 
     cured fully in a case under chapter 13 of this title by 
     actual payment of all arrears as required by the plan, of the 
     postponement, continuation or other similar delay of a 
     prepetition foreclosure proceeding or sale in accordance with 
     applicable nonbankruptcy law, but nothing herein shall imply 
     that such postponement, continuation or other similar delay 
     is a violation of the stay under subsection (a).''; and
       (4) by amending section 1322(b)(2) to read as follows:
       ``(2) modify the rights of holders of secured claims, other 
     than a claim secured primarily by a security interest in 
     property used as the debtor's principal residence at any time 
     during 180 days prior to the filing of the petition, or of 
     holders of unsecured claims, or leave unaffected the rights 
     of holders of any class of claims;''.
       (f) Limitation.--Section 362 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(j) If one case commenced under chapter 7, 11, or 13 of 
     this title is dismissed due to the creation of a debt 
     repayment plan administered by a credit counseling agency 
     approved pursuant to section 111 of this title, then for 
     purposes of section 362(c)(3) of this title the subsequent 
     case commenced under any such chapter shall not be presumed 
     to be filed not in good faith.''.
       (g) Return of Goods Shipped.--Section 546(g) of title 11, 
     United States Code, as added by section 222(a) of Public Law 
     103-394, is amended to read as follows:
       ``(h) Notwithstanding the rights and powers of a trustee 
     under sections 544(a), 545, 547, 549, and 553 of this title, 
     if the court determines on a motion by the trustee made not 
     later than 120 days after the date of the order for relief in 
     a case under chapter 11 of this title and after notice and 
     hearing, that a return is in the best interests of the 
     estate, the debtor, with the consent of the creditor, and 
     subject to the prior rights, if any, of third parties in such 
     goods, may return goods shipped to the debtor by the creditor 
     before the commencement of the case, and the creditor may 
     offset the purchase price of such goods against any claim of 
     the creditor against the debtor that arose before the 
     commencement of the case.''.

     SEC. 303. EXTENSIONS.

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

     SEC. 304. LOCAL FILING OF BANKRUPTCY CASES.

       Section 1408 of title 28, United States Code, is amended--
       (1) by striking ``Except'' and inserting ``(a) Except''; 
     and
       (2) by adding at the end the following:
       ``(b) For the purposes of subsection (a), if the debtor is 
     a corporation, the domicile and residence of the debtor are 
     conclusively presumed to be where the debtor's principal 
     place of business in the United States is located.''.

     SEC. 305. PERMITTING ASSUMPTION OF CONTRACTS.

       (a) Section 365(c) of title 11, United States Code, is 
     amended to read as follows:
       ``(c)(1) The trustee may not assume or assign an executory 
     contract or unexpired lease of the debtor, whether or not the 
     contract or lease prohibits or restricts assignment of rights 
     or delegation of duties, if--
       ``(A)(i) applicable law excuses a party to the contract or 
     lease from accepting performance from or rendering 
     performance to an assignee of the contract or lease, whether 
     or not the contract or lease prohibits or restricts 
     assignment of rights or delegation of duties; and
       ``(ii) the party does not consent to the assumption or 
     assignment; or
       ``(B) the contract is a contract to make a loan, or extend 
     other debt financing or financial accommodations, to or for 
     the benefit of the debtor, or to issue a security of the 
     debtor.
       ``(2) Notwithstanding paragraph (1)(A) and applicable 
     nonbankruptcy law, in a case under chapter 11 of this title, 
     a trustee in a case in which a debtor is a corporation, or a 
     debtor in possession, may assume an executory contract or 
     unexpired lease of the debtor, whether or not the contract or 
     lease prohibits or restricts assignment of rights or 
     delegation of duties.
       ``(3) The trustee may not assume or assign an unexpired 
     lease of the debtor of nonresidential real property, whether 
     or not the contract or lease prohibits or restricts 
     assignment of rights or delegation of duties, if the lease 
     has been terminated under applicable nonbankruptcy law before 
     the order for relief.''.
       (b) Section 365(d) of title 11, United States Code, is 
     amended by striking paragraphs (5), (6), (7), (8), and (9), 
     and redesignating paragraph (10) as paragraph (5).
       (c) Section 365(e) of title 11, United States Code, is 
     amended to read as follows:
       ``(e)(1) Notwithstanding a provision in an executory 
     contract or unexpired lease, or in applicable law, an 
     executory contract or unexpired lease of the debtor may not 
     be terminated or modified, and any right or obligation under 
     such contract or lease may not be terminated or modified, at 
     any time after the commencement of the case solely because of 
     a provision in such contract or lease that is conditioned 
     on--
       ``(A) the insolvency or financial condition of the debtor 
     at any time before the closing of the case;
       ``(B) the commencement of a case under this title; or
       ``(C) the appointment of or taking possession by a trustee 
     in a case under this title or a custodian before such 
     commencement.
       ``(2) Paragraph (1) does not apply to an executory contract 
     or unexpired lease of the debtor if the trustee may not 
     assume or assign, and the debtor in possession may not 
     assume, the contract or lease by reason of the provisions of 
     subsection (c) of this section.''.
       (d) Section 365(f)(1) of title 11, United States Code, is 
     amended by striking the semicolon and all that follows 
     through ``event''.

             TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS

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

       (a) Section 1125(a)(1) of title 11, United States Code, is 
     amended by inserting before the semicolon following:

     ``and 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''.
       (b) Section 1125(f) of title 11, United States Code, is 
     amended to read as follows:
       ``(f) Notwithstanding subsection (b)--
       ``(1) the court may determine that the plan itself provides 
     adequate information and that a separate disclosure statement 
     is not necessary;
       ``(2) the court may approve a disclosure statement 
     submitted on standard forms approved by the court or adopted 
     pursuant to section 2075 of title 28; and
       ``(3)(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

[[Page H2742]]

     provides adequate information to each holder of a claim or 
     interest that is solicited, but a conditionally approved 
     disclosure statement shall be mailed not less than 20 days 
     before the date of the hearing on confirmation of the plan; 
     and
       ``(C) the hearing on the disclosure statement may be 
     combined with the hearing on confirmation of a plan.''.

     SEC. 402. DEFINITIONS.

       (a) Definitions. Section 101 of title 11, United States 
     Code, is amended by striking paragraph (51C) and inserting 
     the following:
       ``(51C) `small business case' means a case filed under 
     chapter 11 of this title in which the debtor is a small 
     business debtor; and
       ``(51D) `small business debtor' means (A) a person 
     (including affiliates of such person that are also debtors 
     under this title) that has aggregate noncontingent, 
     liquidated secured and unsecured debts as of the date of the 
     petition or the order for relief in an amount not more than 
     $4,000,000 (excluding debts owed to 1 or more affiliates or 
     insiders), except that if a group of affiliated debtors has 
     aggregate noncontingent liquidated secured and unsecured 
     debts greater than $4,000,000 (excluding debt owed to 1 or 
     more affiliates or insiders), then no member of such group is 
     a small business debtor;''.
       (b) Conforming Amendment.--Section 1102(a)(3) of title 11, 
     United States Code, is amended by inserting ``debtor'' after 
     ``small business'' .

     SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

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

     SEC. 404. UNIFORM NATIONAL REPORTING REQUIREMENTS.

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

     ``Sec. 308. Debtor reporting requirements

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

``308. Debtor reporting requirements.''.

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

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

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

     SEC. 406. DUTIES IN SMALL BUSINESS CASES.

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

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

       ``(a) 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 responsible individual, meetings 
     scheduled by the court or the United States trustee, 
     including initial debtor interviews and meetings of creditors 
     convened under section 341 of this title;
       ``(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) of this title, maintain 
     insurance customary and appropriate to the industry;
       ``(6)(A) timely file tax returns;
       ``(B) subject to section 363(c)(2) of this title, timely 
     pay all administrative expense tax claims, except those being 
     contested by appropriate proceedings being diligently 
     prosecuted; and
       ``(C) subject to section 363(c)(2) of this title, establish 
     1 or more separate deposit accounts not later than 10 
     business days after the date of order for relief (or as soon 
     thereafter as possible if all banks contacted decline the 
     business) and deposit therein, not later than 1 business day 
     after receipt thereof or a responsible time set by the court, 
     all taxes payable for periods beginning after the date the 
     case is commenced that are collected or withheld by the 
     debtor for governmental units unless the court waives this 
     requirement after notice and hearing; and
       ``(7) allow the United States trustee, or its designated 
     representative, to inspect the debtor's business premises, 
     books, and records at reasonable times, after reasonable 
     prior written notice, unless notice is waived by the 
     debtor.''.
       (b) Technical Amendment.--The table of sections of chapter 
     11, United States Code, is amended by inserting after the 
     item relating to section 1114 the following:

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

     SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.

       Section 1121(e) of title 11, United States Code, is amended 
     to read as follows:
       ``(e) In a small business case--
       ``(1) only the debtor may file a plan until after 90 days 
     after the date of the order for relief, unless a trustee has 
     been appointed under this chapter, or unless the court, on 
     request of a party in interest and after notice and hearing, 
     shortens such time;
       ``(2) the debtor shall file a plan, and any necessary 
     disclosure statement, not later than 90 days after the date 
     of the order for relief, unless the United States Trustee has 
     appointed under section 1102(a)(1) of this title a committee 
     of unsecured creditors that the court has determined, before 
     the 90 days has expired, is sufficiently active and 
     representative to provide effective oversight of the debtor; 
     and
       ``(3) the time periods specified in paragraphs (1) and (2) 
     of this subsection and the time fixed in section 1129(e) of 
     this title for confirmation of a plan, may be extended only 
     as follows:
       ``(A) On request of a party in interest made within the 
     respective periods, and after notice and hearing, the court 
     may for cause grant one or more extensions, cumulatively not 
     to exceed 60 days, if the movant establishes--
       ``(i) that no cause exists to dismiss or convert the case 
     or appoint a trustee or examiner under subparagraphs (A) (I) 
     of section 1112(b) of this title; and
       ``(ii) that there is a reasonable possibility the court 
     will confirm a plan within a reasonable time;
       ``(B) On request of a party in interest made within the 
     respective periods, and after notice and hearing, the court 
     may for cause grant one or more extensions in excess of those 
     authorized under subparagraph (A) of this paragraph, if the 
     movant establishes:
       ``(i) that no cause exists to dismiss or convert the case 
     or appoint a trustee or examiner under subparagraphs (A) (I) 
     of section 1112(b)(3) of this title; and
       ``(ii) that it is more likely than not that the court will 
     confirm a plan within a reasonable time; and
       ``(C) a new deadline shall be imposed whenever an extension 
     is granted.''.

     SEC. 408. PLAN CONFIRMATION DEADLINE.

       Section 1129 of title 11, United States Code, is amended by 
     adding at the end the following:

[[Page H2743]]

       ``(e) In a small business case, the debtor shall confirm a 
     plan not later than 150 days after the date of the order for 
     relief unless--
       ``(1) the United States Trustee has appointed, under 
     section 1102(a)(1) of this title, a committee of unsecured 
     creditors that the court has determined, before the 150 days 
     has expired, is sufficiently active and representative to 
     provide effective oversight of the debtor; or
       ``(2) such 150-day period is extended as provided in 
     section 1121(e)(3) of this title.''.

     SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.

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

     SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.

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

     SEC. 411. SCHEDULING CONFERENCES.

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

     SEC. 412. SERIAL FILER PROVISIONS.

       Section 362 of title 11, United States Code, as amended by 
     section 302, is amended--
       (1) in subsection (i) as so redesignated by section 122--
       (A) by striking ``An'' and inserting ``(1) Except as 
     provided in paragraph (2), an''; and
       (B) by adding at the end the following:
       ``(2) If such violation is based on an action taken by an 
     entity in the good-faith belief that subsection (h) applies 
     to the debtor, then recovery under paragraph (1) against such 
     entity shall be limited to actual damages.''; and
       (2) by inserting after subsection (j), as added by section 
     302, the following:
       ``(k)(1) Except as provided in paragraph (2) of this 
     subsection, the provisions of subsection (a) of thissection 
     shall not apply in a case in which the debtor--
       ``(A) is a debtor in a case under this title pending at the 
     time the petition is filed;
       ``(B) was a debtor in a case under this title which was 
     dismissed for any reason by an order that became final in the 
     2-year period ending on the date of the order for relief 
     entered with respect to the petition;
       ``(C) was a debtor in a case under this title in which a 
     chapter 11, 12, or 13 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 debtor described in 
     subparagraph (A), (B), or (C).
       ``(2) This subsection shall not apply--
       ``(A) to a case initiated by an involuntary petition filed 
     by a creditor that is not an insider or affiliate of the 
     debtor; or
       ``(B) after such time as the debtor, after notice and a 
     hearing, demonstrates by a preponderance of the evidence, 
     that the filing of such petition resulted from circumstances 
     beyond the control of the debtor and not foreseeable at the 
     time the earlier case was filed; and that it is more likely 
     than not that the court will confirm a plan, other than a 
     liquidating plan, within a reasonable time.''.

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

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

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

       Not later than 2 years after the date of the enactment of 
     this Act, the Administrator of the Small Business 
     Administration, in consultation with the Attorney General, 
     the Director of the Administrative Office of United States 
     Trustees, and the Director of the Administrative Office of 
     the United States Courts, shall--
       (1) conduct a study to determine--
       (A) the internal and external factors that cause small 
     businesses, especially sole proprietorships, to become 
     debtors in cases under title 11 of the United States Code and 
     that cause certain small businesses to successfully complete 
     cases under chapter 11 of such title; and

[[Page H2744]]

       (B) how Federal laws relating to bankruptcy may be made 
     more effective and efficient in assisting small businesses to 
     remain viable; and
       (2) submit to the President pro tempore of the Senate and 
     the Speaker of the House of Representatives a report 
     summarizing that study.

     SEC. 415. PAYMENT OF INTEREST.

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

     SEC. 416. PROTECTION OF JOBS.

       The provisions of title 11 of the United States Code 
     relating to small business debtors or to single asset real 
     estate shall not apply in a case under such title if the 
     application of any of such provisions in such case could 
     result in the loss of 5 or more jobs.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

     SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

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

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

       Section 901(a) of title 11, United States Code, is 
     amended--
       (1) by inserting ``555, 556,'' after ``553,''; and
       (2) by inserting ``559, 560, 561, 562'' after ``557,''.

              TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM

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

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

     SEC. 602. AUDIT PROCEDURES.

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

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

       (a) Notice.--Section 342 of title 11, United States Code, 
     is amended--
       (1) in subsection (c)--
       (A) by striking ``, but the failure of such notice to 
     contain such information shall not invalidate the legal 
     effect of such notice''; and
       (B) by adding the following at the end:
     ``If the credit agreement between the debtor and the creditor 
     or the last communication before the filing of the petition 
     in a voluntary case from the creditor to a debtor who is an 
     individual states an account number of the debtor which is 
     the current account number of the debtor with respect to any 
     debt held by the creditor against the debtor, the debtor 
     shall include such account number in any notice to the 
     creditor required to be given under this title. If the 
     creditor has specified to the debtor an address at which the 
     creditor wishes to receive correspondence regarding the 
     debtor's account, any notice to the creditor required to be 
     given by the debtor under this title shall be given at such 
     address. For the purposes of this section, `notice' shall 
     include, but shall not be limited to, any correspondence from 
     the debtor to the creditor after the commencement of the 
     case, any statement of the debtor's intention under section 
     521(a)(2) of this title, notice of the commencement of any 
     proceeding in the case to which the creditor is a party, and 
     any notice of the hearing under section 1324 of this 
     title.'';
       (2) by adding at the end the following:
       ``(d) At any time, a creditor in a case of an individual 
     debtor under chapter 7 or 13 may file with the court and 
     serve on the debtor a notice of the address to be used to 
     notify the creditor in that case. After 5 days following 
     receipt of such notice, any notice the court or the debtor is 
     required to give the creditor shall be given at that address.
       ``(e) An entity may file with the court a notice stating 
     its address for notice in cases under chapters 7 and 13. 
     After 30 days following the filing of such notice, any notice 
     in any case filed under chapter 7 or 13 given by the court 
     shall be to that address unless specific notice is given 
     under subsection (d) with respect to a particular case.
       ``(f) Notice given to a creditor other than as provided in 
     this section shall not be effective notice until it has been 
     brought to the attention of the creditor. If the creditor has 
     designated a person or department to be responsible for 
     receiving notices concerning bankruptcy cases and has 
     established reasonable procedures so that bankruptcy notices 
     received by the creditor will be delivered to such department 
     or person, notice will not be brought to the attention of the 
     creditor until received by such person or department. No 
     sanction under section 362(h) of this title or any other 
     sanction which a court may impose on account of violations of 
     the stay

[[Page H2745]]

     under section 362(a) of this title or failure to comply with 
     section 542 or 543 of this title may be imposed on any action 
     of the creditor unless the action takes place after the 
     creditor has received notice of the commencement of the case 
     effective under this section.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 604, 120, and 302, is 
     amended--
       (1) by inserting ``(a)'' before ``The debtor shall--'';
       (2) by striking paragraph (1) and inserting the following:
       ``(1) file--
       ``(A) a list of creditors; and
       ``(B) unless the court orders otherwise--
       ``(i) a schedule of assets and liabilities;
       ``(ii) a schedule of current monthly income and current 
     expenditures prepared in accordance with section 707(b)(2);
       ``(iii) a statement of the debtor's financial affairs and, 
     if applicable, a certificate--

       ``(I) of an attorney whose name is on the petition as the 
     attorney for the debtor or any bankruptcy petition preparer 
     signing the petition pursuant to section 110(b)(1) of this 
     title indicating that such attorney or bankruptcy petition 
     preparer delivered to the debtor any notice required by 
     section 342(b) of this title; or
       ``(II) if no attorney for the debtor is indicated and no 
     bankruptcy petition preparer signed the petition, of the 
     debtor that such notice was obtained and read by the debtor;

       ``(iv) copies of any Federal tax returns, including any 
     schedules or attachments, filed by the debtor for the 3-year 
     period preceding the order for relief;
       ``(v) copies of all payment advices or other evidence of 
     payment, if any, received by the debtor from any employer of 
     the debtor in the period 60 days prior to the filing of the 
     petition; and
       ``(vi) a statement disclosing any reasonably anticipated 
     increase in income or expenditures over the 12-month period 
     following the date of filing;'';
       (3) by adding at the end the following:
       ``(e)(1) At any time, a creditor, in the case of an 
     individual under chapter 7 or 13, may file with the court 
     notice that the creditor requests the petition, schedules, 
     and a statement of affairs filed by the debtor in the case 
     and the court shall make those documents available to the 
     creditor who requests those documents at a reasonable cost 
     within 5 business days after such request.
       ``(2) At any time, a creditor in a case under chapter 13 
     may file with the court notice that the creditor requests the 
     plan filed by the debtor in the case, and the court shall 
     make such plan available to the creditor who requests such 
     plan at a reasonable cost and not later than 5 days after 
     such request.
       ``(f) An individual debtor in a case under chapter 7 or 13 
     shall file with the court--
       ``(1) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, with respect 
     to the period from the commencement of the case until such 
     time as the case is closed;
       ``(2) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, that were 
     not filed with the taxing authority when the schedules under 
     subsection (a)(1) were filed with respect to the period that 
     is 3 years before the order for relief;
       ``(3) any amendments to any of the tax returns, including 
     schedules or attachments, described in paragraph (1) or (2); 
     and
       ``(4) in a case under chapter 13, a statement subject to 
     the penalties of perjury by the debtor of the debtor's 
     current monthly income and expenditures in the preceding tax 
     year and current monthly income less expenditures for the 
     month preceding the statement prepared in accordance with 
     section 707(b)(2) 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.
       ``(g)(1) A statement referred to in subsection (f)(4) shall 
     disclose--
       ``(A) the amount and sources of income of the debtor;
       ``(B) the identity of any persons responsible with the 
     debtor for the support of any dependents of the debtor; and
       ``(C) the identity of any persons who contributed, and the 
     amount contributed, to the household in which the debtor 
     resides.
       ``(2) The tax returns, amendments, and statement of income 
     and expenditures described in paragraph (1) shall be 
     available to the United States trustee, any bankruptcy 
     administrator, any trustee, and any party in interest for 
     inspection and copying, subject to the requirements of 
     subsection (h).
       ``(h)(1) Not later than 30 days after the date of enactment 
     of the Consumer 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 
     reasonable restrictions on creditor access to tax information 
     that is required to be provided under this section to verify 
     creditor identity and to restrict use of the information 
     except with respect to the case.
       ``(3) Not later than 1 year after the date of enactment of 
     the Consumer 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) to provide timely and sufficient information to 
     creditors concerning the case; and
       ``(B) if appropriate, includes proposed legislation--
       ``(i) to further protect the confidentiality of tax 
     information or to make it better available to creditors; and
       ``(ii) to provide penalties for the improper use by any 
     person of the tax information required to be provided under 
     this section.
       ``(i) If requested by the United States trustee or a 
     trustee serving in the case, the debtor provide a document 
     that establishes the identity of the debtor, including a 
     driver's license, passport, or other document that contains a 
     photograph of the debtor and such other personal identifying 
     information relating to the debtor that establishes the 
     identity of the debtor.''.
       (c) Section 1324 of title 11, United States Code, is 
     amended--
       (1) by inserting ``(a)'' before ``After''; and
       (2) by inserting at the end thereof--
       ``(c) Whenever a party in interest is given notice of a 
     hearing on the confirmation or modification of a plan under 
     this chapter, such notice shall include the information 
     provided by the debtor on the most recent statement filed 
     with the court pursuant to section 521(a)(1)(B)(ii) or (f)(4) 
     of this title.''.

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

       Section 521 of title 11, United States Code, as amended by 
     section 603 is amended by inserting after subsection (a) the 
     following:
       ``(b)(1) Notwithstanding section 707(a) of this title, and 
     subject to paragraph (2), if an individual debtor in a 
     voluntary case under chapter 7 or 13 fails to file all of the 
     information required under subsection (a)(1) within 45 days 
     after the filing of the petition commencing the case, the 
     case shall be automatically dismissed effective on the 46th 
     day after the filing of the petition.
       ``(2) With respect to a case described in paragraph (1), 
     any party in interest may request the court to enter an order 
     dismissing the case. The court shall, if so requested, enter 
     an order of dismissal not later than 5 days after such 
     request.
       ``(3) Upon request of the debtor made within 45 days after 
     the filing of the petition commencing a case described in 
     paragraph (1), the court may allow the debtor an additional 
     period not to exceed 45 days to file the information required 
     under subsection (a)(1) if the court finds justification for 
     extending the period for the filing.''.

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

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

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

       Title 11, United States Code, is amended--
       (1) by amending section 1322(d) to read as follows:
       ``(d) If the current monthly income of the debtor and the 
     debtor's spouse combined, when multiplied by 12, is not less 
     than the highest national median family income last reported 
     by the Bureau of the Census for a family of equal or lesser 
     size or, in the case of a household of 1 person, not less 
     than the national median household income for 1 earner, the 
     plan may not provide for payments over a period that is 
     longer than 5 years. If the current monthly income of the 
     debtor and the debtor's spouse combined, when multiplied by 
     12, is less than the highest national median family income 
     for a family of equal or lesser size, or in the case of a 
     household of 1 person, the national median household income 
     for 1 earner, the plan may not provide for payments over a 
     period that is longer than 3 years, unless the court, for 
     cause, approves a longer period, but the court may not 
     approve a period that is longer than 5 years. Notwithstanding 
     the foregoing, the national median family income for a family 
     of more than 4 individuals shall be the national median 
     family income last reported by the Bureau of the Census for a 
     family of 4 individuals plus $583 for each additional member 
     of the family.'';
       (2) in section 1325(b)(1)(B) as amended by section 130--
       (A) by striking ``three year period'' and inserting 
     ``applicable commitment period''; and
       (B) by inserting at the end of subparagraph (B) the 
     following: ``The `applicable commitment period' shall be not 
     less than 5 years if the current monthly income of the debtor 
     and the debtor's spouse combined, when multiplied by 12, is 
     not less than the highest national median family income last 
     reported by the Bureau of the Census for a family of equal or 
     lesser size, or in the case of a household of 1 person, the 
     national median household income for 1 earner. 
     Notwithstanding the foregoing, the national median family

[[Page H2746]]

     income for a family of more than 4 individuals shall be the 
     national median family income last reported by the Bureau of 
     the Census for a family of 4 individuals plus $583 for each 
     additional member of the family.''; and
       (3) in section 1329--
       (A) by striking in subsection (c) ``three years'' and 
     inserting ``the applicable commitment period under section 
     1325(b)(1)(B)''; and
       (B) by inserting at the end of subsection (c) the 
     following:

     ``The duration period shall be 5 years if the current monthly 
     income of the debtor and the debtor's spouse combined, when 
     multiplied by 12, is not less than the highest national 
     median family income last reported by the Bureau of the 
     Census for a family of equal or lesser size or, in the case 
     of a household of 1 person, the national median household 
     income for 1 earner, as of the date of the modification and 
     shall be 3 years if the current monthly total income of the 
     debtor and the debtor's spouse combined, when multiplied by 
     12, is less than the highest national median family income 
     last reported by the Bureau of the Census for a family of 
     equal or lesser size or, in the case of a household of 1 
     person, less than the national median household income for 1 
     earner as of the date of the modification. Notwithstanding 
     the foregoing, the national median family income for a family 
     of more than 4 individuals shall be the national median 
     family income last reported by the Bureau of the Census for a 
     family of 4 individuals plus $583 for each additional member 
     of the family.''.

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

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

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

       (a) Amendments.--Section 1930(a)(6) of title 28, United 
     States Code, is amended--
       (1) in the 1st sentence by striking ``until the case is 
     converted or dismissed, whichever occurs first''; and
       (2) in the 2d sentence--
       (A) by striking ``The'' and inserting ``Until the plan is 
     confirmed or the case is converted (whichever occurs first) 
     the''; and
       (B) by striking ``less than $300,000;'' and inserting 
     ``less than $300,000. Until the case is converted, dismissed, 
     or closed (whichever occurs first and without regard to 
     confirmation of the plan) the fee shall be''.
       (b) Delayed Effective Date.--The amendments made by 
     subsection (a) shall take effect on October 1, 1999.

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

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

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

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

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

     SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13.

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

     SEC. 612. BANKRUPTCY APPEALS.

       Title 28 of the United States Code is amended by inserting 
     after section 1292 the following:

     ``Sec. 1293. Bankruptcy appeals

       ``(a) The courts of appeals (other than the United States 
     Court of Appeals for the Federal Circuit) shall have 
     jurisdiction of appeals from the following:
       ``(1) Final orders and judgments entered by bankruptcy 
     courts and district courts in cases under title 11, in 
     proceedings arising under title 11, and in proceedings 
     arising in or related to a case under title 11, including 
     final orders in proceedings regarding the automatic stay of 
     section 362 of title 11.
       ``(2) Interlocutory orders entered by bankruptcy courts and 
     district courts granting, continuing, modifying, refusing or 
     dissolving injunctions, or refusing to dissolve or modify 
     injunctions in cases under title 11, in proceedings arising 
     under title 11, and in proceedings arising in or related to a 
     case under title 11, other than interlocutory orders in 
     proceedings regarding the automatic stay of section 362 of 
     title 11.
       ``(3) Interlocutory orders of bankruptcy courts and 
     district courts entered under section 1104(a) or 1121(d) of 
     title 11, or the refusal to enter an order under such 
     section.
       ``(4) An interlocutory order of a bankruptcy court or 
     district court entered in a case under title 11, in a 
     proceeding arising under title 11, or in a proceeding arising 
     in or related to a case under title 11, if the court of 
     appeals that would have jurisdiction of an appeal of a final 
     order entered in such case or such proceeding permits, in its 
     discretion, appeal to be taken from such interlocutory order.
       ``(b) Final decisions, judgments, orders, and decrees 
     entered by a bankruptcy appellate panel under subsection (b) 
     of this section.
       ``(c)(1) The judicial council of a circuit may establish a 
     bankruptcy appellate panel composed of bankruptcy judges in 
     the circuit who are appointed by the judicial council, which 
     panel shall exercise the jurisdiction to review orders and 
     judgments of bankruptcy courts described in paragraphs (1)-
     (4) of subsection (a) of this section unless--
       ``(A) the appellant elects at the time of filing the 
     appeal; or
       ``(B) any other party elects, not later than 10 days after 
     service of the notice of the appeal;

     to have such jurisdiction exercised by the court of appeals.
       ``(2) An appeal to be heard by a bankruptcy appellate panel 
     under this subsection (b) shall be heard by 3 members of the 
     bankruptcy appellate panel, provided that a member of such 
     panel may not hear an appeal originating in the district for 
     which such member is appointed or designated under section 
     152 of this title.
       ``(3) If authorized by the Judicial Conference of the 
     United States, the judicial councils of 2 or more circuits 
     may establish a joint bankruptcy appellate panel.''.

     SEC. 613. GAO STUDY.

       (a) Study.--Not later than 270 days after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall conduct a study of the feasibility, 
     effectiveness, and cost of requiring trustees appointed under 
     title 11 of the United States Code, or the bankruptcy courts, 
     to provide to the Office of Child Support Enforcement 
     promptly after the commencement of cases by individual 
     debtors under such title, the names and social security 
     numbers of such debtors for the purposes of allowing such 
     Office to determine whether such debtors have outstanding 
     obligations for child support (as determined on the basis of 
     information in the Federal Case Registry or other national 
     database).
       (b) Report.--Not later than 300 days after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to the Speaker of the House of Representatives and the 
     President pro tempore of the Senate, a report containing the 
     results of the study required by subsection (a).

                       TITLE VII--BANKRUPTCY DATA

     SEC. 701. IMPROVED BANKRUPTCY STATISTICS.

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

     ``Sec. 159. Bankruptcy statistics

       ``(a) The clerk of each district shall compile statistics 
     regarding individual debtors with primarily consumer debts 
     seeking relief under chapters 7, 11, and 13 of title 11. 
     Those statistics shall be in a form prescribed by the 
     Director of the Administrative Office of the United States 
     Courts (referred to in this section as the `Office').
       ``(b) The Director shall--
       ``(1) compile the statistics referred to in subsection (a);

[[Page H2747]]

       ``(2) make the statistics available to the public; and
       ``(3) not later than October 31, 2000, and annually 
     thereafter, prepare, and submit to Congress a report 
     concerning the information collected under subsection (a) 
     that contains an analysis of the information.
       ``(c) The compilation required under subsection (b) shall--
       ``(1) be itemized, by chapter, with respect to title 11;
       ``(2) be presented in the aggregate and for each district; 
     and
       ``(3) include information concerning--
       ``(A) the total assets and total liabilities of the debtors 
     described in subsection (a), and in each category of assets 
     and liabilities, as reported in the schedules prescribed 
     pursuant to section 2075 of this title and filed by those 
     debtors;
       ``(B) the current monthly income, and average income and 
     average expenses of those debtors as reported on the 
     schedules and statements that each such debtor files under 
     sections 521 and 1322 of title 11;
       ``(C) the aggregate amount of debt discharged in the 
     reporting period, determined as the difference between the 
     total amount of debt and obligations of a debtor reported on 
     the schedules and the amount of such debt reported in 
     categories which are predominantly nondischargeable;
       ``(D) the average period of time between the filing of the 
     petition and the closing of the case;
       ``(E) for the reporting period--
       ``(i) the number of cases in which a reaffirmation was 
     filed; and
       ``(ii)(I) the total number of reaffirmations filed;
       ``(II) of those cases in which a reaffirmation was filed, 
     the number in which the debtor was not represented by an 
     attorney; and
       ``(III) of those cases, the number of cases in which the 
     reaffirmation was approved by the court;
       ``(F) with respect to cases filed under chapter 13 of title 
     11, for the reporting period--
       ``(i)(I) the number of cases in which a final order was 
     entered determining the value of property securing a claim in 
     an amount less than the amount of the claim; and
       ``(II) the number of final orders determining the value of 
     property securing a claim issued;
       ``(ii) the number of cases dismissed, the number of cases 
     dismissed for failure to make payments under the plan, the 
     number of cases refiled after dismissal, and the number of 
     cases in which the plan was completed, separately itemized 
     with respect to the number of modifications made before 
     completion of the plan, if any; and
       ``(iii) the number of cases in which the debtor filed 
     another case within the 6 years previous to the filing;
       ``(G) the number of cases in which creditors were fined for 
     misconduct and any amount of punitive damages awarded by the 
     court for creditor misconduct; and
       ``(H) the number of cases in which sanctions under rule 
     9011 of the Federal Rules of Bankruptcy Procedure were 
     imposed against debtor's counsel and damages awarded under 
     such Rule.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 6 of title 28, United States Code, is 
     amended by adding at the end the following:

``159. Bankruptcy statistics.''.

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

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

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

     ``Sec. 589b. Bankruptcy data

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

     in each case by appropriate category and, in cases under 
     chapters 12 and 13 of title 11, date of confirmation of the 
     plan, each modification thereto, and defaults by the debtor 
     in performance under the plan.
       ``(e) Periodic Reports.--Periodic reports proposed for 
     adoption by trustees or debtors in possession under chapter 
     11 of title 11 shall, in addition to such other matters as 
     are required by law or as the Attorney General, in the 
     discretion of the Attorney General, shall propose, include--
       ``(1) information about the standard industry 
     classification, published by the Department of Commerce, for 
     the businesses conducted by the debtor;
       ``(2) length of time the case has been pending;
       ``(3) number of full-time employees as at the date of the 
     order for relief and at end of each reporting period since 
     the case was filed;
       ``(4) cash receipts, cash disbursements and profitability 
     of the debtor for the most recent period and cumulatively 
     since the date of the order for relief;
       ``(5) compliance with title 11, whether or not tax returns 
     and tax payments since the date of the order for relief have 
     been timely filed and made;
       ``(6) all professional fees approved by the court in the 
     case for the most recent period and cumulatively since the 
     date of the order for relief (separately reported, in for the 
     professional fees incurred by or on behalf of the debtor, 
     between those that would have been incurred absent a 
     bankruptcy case and those not); and
       ``(7) plans of reorganization filed and confirmed and, with 
     respect thereto, by class, the recoveries of the holders, 
     expressed in aggregate dollar values and, in the case of 
     claims, as a percentage of total claims of the class 
     allowed.''.
       (b) Technical Amendment.--The table of sections of chapter 
     39 of title 28, United States Code, is amended by adding at 
     the end the following:

``589b. Bankruptcy data.''.

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

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

                 TITLE VIII--BANKRUPTCY TAX PROVISIONS

     SEC. 801. TREATMENT OF CERTAIN LIENS.

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

[[Page H2748]]

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

     SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.

       (a) Effective Notice to Governmental Units.--Section 342 of 
     title 11, United States Code, as amended by section 603, is 
     amended by adding at the end the following:
       ``(g) If a debtor lists a governmental unit as a creditor 
     in a list or schedule, any notice required to be given by the 
     debtor under this title, any rule, any applicable law, or any 
     order of the court, shall identify the department, agency, or 
     instrumentality through which the debtor is indebted. The 
     debtor shall identify (with information such as a taxpayer 
     identification number, loan, account or contract number, or 
     real estate parcel number, where applicable), and describe 
     the underlying basis for the governmental unit's claim. If 
     the debtor's liability to a governmental unit arises from a 
     debt or obligation owed or incurred by another individual, 
     entity, or organization, or under a different name, the 
     debtor shall identify such individual, entity, organization, 
     or name.
       ``(h) The clerk shall keep and update quarterly, in the 
     form and manner as the Director of the Administrative Office 
     of the United States Courts prescribes, and make available to 
     debtors, a register in which a governmental unit may 
     designate a safe harbor mailing address for service of notice 
     in cases pending in the district. A governmental unit may 
     file a statement with the clerk designating a safe harbor 
     address to which notices are to be sent, unless such 
     governmental unit files a notice of change of address.''.
       (b) Adoption of Rules Providing Notice.--The Advisory 
     Committee on Bankruptcy Rules of the Judicial Conference 
     shall, within a reasonable period of time after the date of 
     the enactment of this Act, propose for adoption enhanced 
     rules for providing notice to State, Federal, and local 
     government units that have regulatory authority over the 
     debtor or which may be creditors in the debtor's case. Such 
     rules shall be reasonably calculated to ensure that notice 
     will reach the representatives of the governmental unit, or 
     subdivision thereof, who will be the proper persons 
     authorized to act upon the notice. At a minimum, the rules 
     should require that the debtor--
       (1) identify in the schedules and the notice, the 
     subdivision, agency, or entity in respect of which such 
     notice should be received;
       (2) provide sufficient information (such as case captions, 
     permit numbers, taxpayer identification numbers, or similar 
     identifying information) to permit the governmental unit or 
     subdivision thereof, entitled to receive such notice, to 
     identify the debtor or the person or entity on behalf of 
     which the debtor is providing notice where the debtor may be 
     a successor in interest or may not be the same as the person 
     or entity which incurred the debt or obligation; and
       (3) identify, in appropriate schedules, served together 
     with the notice, the property in respect of which the claim 
     or regulatory obligation may have arisen, if any, the nature 
     of such claim or regulatory obligation and the purpose for 
     which notice is being given.
       (c) Effect of Failure of Notice.--Section 342 of title 11, 
     United States Code, as amended by section 603 and 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 timely 
     notice was given in a manner reasonably calculated to satisfy 
     the requirements of this section was given, and that--
       ``(1) either the notice was timely sent to the safe harbor 
     address provided in the register maintained by the clerk of 
     the district in which the case was pending for such purposes; 
     or
       ``(2) no safe harbor address was provided in such list for 
     the governmental unit and that an officer of the governmental 
     unit who is responsible for the matter or claim had actual 
     knowledge of the case in sufficient time to act.''.

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

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

     SEC. 804. RATE OF INTEREST ON TAX CLAIMS.

       (a) Amendment.--Chapter 5 of title 11, United States Code, 
     is amended by adding at the end the following:

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

       ``If any provision of this title requires the payment of 
     interest on a tax claim or requires the payment of interest 
     to enable a creditor to receive the present value of the 
     allowed amount of a tax claim, the rate of interest shall be 
     as follows:
       ``(1) In the case of ad valorem tax claims, whether secured 
     or unsecured, other unsecured tax claims where interest is 
     required to be paid under section 726(a)(5) of this title, 
     secured tax claims, and administrative tax claims paid under 
     section 503(b)(1) of this title, the rate shall be determined 
     under applicable nonbankruptcy law.
       ``(2) In the case of all other tax claims, the minimum rate 
     of interest shall be the Federal short-term rate rounded to 
     the nearest full percent, determined under section 1274(d) of 
     the Internal Revenue Code of 1986, plus 3 percentage points.
       ``(A) In the case of claims for Federal income taxes, such 
     rate shall be subject to any adjustment that may be required 
     under section 6621(d) of the Internal Revenue Code of 1986.
       ``(B) In the case of taxes paid under a confirmed plan or 
     reorganization, such rate shall be determined as of the 
     calendar month in which the plan is confirmed.''.
       (b) Conforming Amendment.--The table of sections of 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. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.

       Section 507(a)(8)(A) of title 11, United States Code, as so 
     redesignated, is amended--
       (1) in clause (i) by inserting after ``petition'' and 
     before the semicolon ``, plus any time, plus 6 months, during 
     which the stay of proceedings was in effect in a prior case 
     under this title''; and
       (2) amend clause (ii) to read as follows:
       ``(ii) assessed within 240 days before the date of the 
     filing of the petition, exclusive of--

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

     SEC. 806. PRIORITY PROPERTY TAXES INCURRED.

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

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

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

     SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.

       Section 1141(d) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(6) Notwithstanding the provisions of paragraph (1), the 
     confirmation of a plan does not discharge a debtor which is a 
     corporation from any debt for a tax or customs duty with 
     respect to which the debtor made a fraudulent return or 
     willfully attempted in any manner to evade or defeat such 
     tax.''.

     SEC. 809. STAY OF TAX PROCEEDINGS.

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

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

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

     SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

       Section 545(2) of title 11, United States Code, is amended 
     by striking the semicolon at the end and inserting ``, except 
     where such

[[Page H2749]]

     purchaser is a purchaser described in section 6323 of the 
     Internal Revenue Code of 1986 or similar provision of State 
     or local law;''.

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

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

     SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.

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

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

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

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

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

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

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

       (a) Filing of Prepetition Tax Returns Required for Plan 
     Confirmation.--Section 1325(a) of title 11, United States 
     Code, as amended by section 140, is amended--
       (1) in paragraph (6) by striking ``and'' at the end;
       (2) in paragraph (7) by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(8) if the debtor has filed all Federal, State, and local 
     tax returns as required by section 1308 of this title.''.
       (b) Additional Time Permitted for Filing Tax Returns.--(1) 
     Chapter 13 of title 11, United States Code, as amended by 
     section 135, is amended by adding at the end the following:

     ``Sec. 1308. Filing of prepetition tax returns

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

``1308. Filing of prepetition tax returns.''.
       (c) Dismissal or Conversion on Failure To Comply.--Section 
     1307 of title 11, United States Code, is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (2) by inserting after subsection (d) the following:
       ``(e) Upon the failure of the debtor to file tax returns 
     under section 1308 of this title, on request of a party in 
     interest or the United States trustee and after notice and a 
     hearing, the court shall dismiss a case or convert a case 
     under this chapter to a case under chapter 7 of this title, 
     whichever is in the best interests of creditors and the 
     estate.''.
       (d) Timely Filed Claims.--Section 502(b)(9) of title 11, 
     United States Code, is amended by striking the period at the 
     end and inserting ``, and except that in a case under chapter 
     13 of this title, a claim of a governmental unit for a tax in 
     respect of a return filed under section 1308 of this title 
     shall be timely if it is filed on or before 60 days after 
     such return or returns were filed as required.''.
       (e) Rules for Objections to Claims and to Confirmation.--It 
     is the sense of the Congress that the Advisory Committee on 
     Bankruptcy Rules of the Judicial Conference should, within a 
     reasonable period of time after the date of the enactment of 
     this Act, propose for adoption amended Federal Rules of 
     Bankruptcy Procedure which provide that--
       (1) notwithstanding the provisions of Rule 3015(f), in 
     cases under chapter 13 of title 11, United States Code, a 
     governmental unit may object to the confirmation of a plan on 
     or before 60 days after the debtor files all tax returns 
     required under sections 1308 and 1325(a)(7) of title 11, 
     United States Code; and
       (2) in addition to the provisions of Rule 3007, in a case 
     under chapter 13 of title 11, United States Code, no 
     objection to a tax in respect of a return required to be 
     filed under such section 1308 shall be filed until such 
     return has been filed as required.

     SEC. 817. STANDARDS FOR TAX DISCLOSURE.

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

     SEC. 818. SETOFF OF TAX REFUNDS.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 118, 132, 136, and 203, is amended--
       (1) in paragraph (29) by striking ``or'';
       (2) in paragraph (30) by striking the period at the end and 
     inserting ``; or''; and
       (3) by inserting after paragraph (30) the following:
       ``(31) under subsection (a) of the setoff of an income tax 
     refund, by a governmental unit, in respect of a taxable 
     period which ended before the order for relief against an 
     income tax liability for a taxable period which also ended 
     before the order for relief, unless--
       ``(A) prior to such setoff, an action to determine the 
     amount or legality of such tax liability under section 505(a) 
     was commenced; or

[[Page H2750]]

       ``(B) where the setoff of an income tax refund is not 
     permitted because of a pending action to determine the amount 
     or legality of a tax liability, the governmental unit may 
     hold the refund pending the resolution of the action.''.

            TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES

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

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

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

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

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

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

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

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

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

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

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

     ``Sec. 1501. Purpose and scope of application

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

     ``Sec. 1502. Definitions

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

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

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

     ``Sec. 1504. Commencement of ancillary case

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

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

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

     ``Sec. 1506. Public policy exception

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

     ``Sec. 1507. Additional assistance

       ``(a) Subject to the specific limitations stated elsewhere 
     in this chapter the court, upon recognition of a foreign 
     proceeding, the court 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 may commence a case under 
     section 1504 of this title by filing with the court a 
     petition for recognition of a foreign proceeding under 
     section 1515 of this title.
       ``(b) If the court grants recognition under section 1515 of 
     this title, and subject to any limitations that the court may 
     impose consistent with the policy of this chapter--
       ``(1) the foreign representative has the capacity to sue 
     and be sued in a court in the United States;
       ``(2) the foreign representative may apply directly to a 
     court in the United States for appropriate relief in that 
     court; and

[[Page H2751]]

       ``(3) a court in the United States shall grant comity or 
     cooperation to the foreign representative.
       ``(c) A request for comity or cooperation by a foreign 
     representative in a court in the United States shall be 
     accompanied by a certified copy of an order granting 
     recognition under section 1517 of this title.
       ``(d) If the court denies recognition under this chapter, 
     the court may issue any appropriate order necessary to 
     prevent the foreign representative from obtaining comity or 
     cooperation from courts in the United States.
       ``(e) Whether or not the court grants recognition, and 
     subject to sections 306 and 1510 of this title, a foreign 
     representative is subject to applicable nonbankruptcy law.
       ``(f) Notwithstanding any other provision of this section, 
     the failure of a foreign representative to commence a case or 
     to obtain recognition under this chapter does not affect any 
     right the foreign representative may have to sue in a court 
     in the United State to collect or recover a claim which is 
     the property of the debtor.''.

     ``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 certified copy of an order granting 
     recognition. The court where the petition for recognition has 
     been filed must be advised of the foreign representative's 
     intent to commence a case under subsection (a) prior to such 
     commencement.

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

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

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

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

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

       ``(a) Whenever in a case under this title notice is to be 
     given to creditors generally or to any class or category of 
     creditors, such notice shall also be given to the known 
     creditors generally, or to creditors in the notified class or 
     category, that do not have addresses in the United States. 
     The court may order that appropriate steps be taken with a 
     view to notifying any creditor whose address is not yet 
     known.
       ``(b) Such notification to creditors with foreign addresses 
     described in subsection (a) shall be given individually, 
     unless the court considers that, under the circumstances, 
     some other form of notification would be more appropriate. No 
     letters rogatory or other similar formality is required.
       ``(c) When a notification of commencement of a case is to 
     be given to foreign creditors, the notification shall--
       ``(1) indicate the time period for filing proofs of claim 
     and specify the place for their filing;
       ``(2) indicate whether secured creditors need to file their 
     proofs of claim; and
       ``(3) contain any other information required to be included 
     in such a notification to creditors under 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 constitutes 
     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 under section 350.

     ``Sec. 1518. Subsequent information

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

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

       ``(a) From the time of filing a petition for recognition 
     until the court rules on the petition, 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) sections 361 and 362 with respect to the debtor and 
     that property of the debtor that is within the territorial 
     jurisdiction of the United States;

[[Page H2752]]

       ``(2) sections 363, 549, and 552 of this title apply to a 
     transfer of an interest of the debtor in property that is 
     within the territorial jurisdiction of the United States to 
     the same extent that the sections would apply to property of 
     an estate;
       ``(3) unless the court orders otherwise, the foreign 
     representative may operate the debtor's business and may 
     exercise the rights and powers of a trustee under and to the 
     extent provided by sections 363 and 552; and
       ``(4) section 552 applies to property of the debtor that is 
     within the territorial jurisdiction of the United States.''.
       ``(b) Subsection (a) does not affect the right to commence 
     an individual action or proceeding in a foreign country to 
     the extent necessary to preserve a claim against the debtor.
       ``(c) 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 an 
     individual action or proceeding concerning the debtor's 
     assets, rights, obligations or liabilities to the extent they 
     have not been stayed under section 1520(a);
       ``(2) staying execution against the debtor's assets to the 
     extent it has not been stayed under section 1520(a);
       ``(3) suspending the right to transfer, encumber or 
     otherwise dispose of any assets of the debtor to the extent 
     this right has not been suspended under section 1520(a);
       ``(4) providing for the examination of witnesses, the 
     taking of evidence or the delivery of information concerning 
     the debtor's assets, affairs, rights, obligations or 
     liabilities;
       ``(5) entrusting the administration or realization of all 
     or part of the debtor's assets within the territorial 
     jurisdiction of the United States to the foreign 
     representative or another person, including an examiner, 
     authorized by the court;
       ``(6) extending relief granted under section 1519(a); and
       ``(7) granting any additional relief that may be available 
     to a trustee, except for relief available under sections 522, 
     544, 545, 547, 548, 550, and 724(a).
       ``(b) Upon recognition of a foreign proceeding, whether 
     main or nonmain, the court may, at the request of the foreign 
     representative, entrust the distribution of all or part of 
     the debtor's assets located in the United States to the 
     foreign representative or another person, including an 
     examiner, authorized by the court, provided that the court is 
     satisfied that the interests of creditors in the United 
     States are sufficiently protected.
       ``(c) In granting relief under this section to a 
     representative of a foreign nonmain proceeding, the court 
     must be satisfied that the relief relates to assets that, 
     under the law of the United States, should be administered in 
     the foreign nonmain proceeding or concerns information 
     required in that proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under paragraphs (1), 
     (2), (3), and (6) of subsection (a).

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

       ``(a) The court may grant relief under section 1519 or 
     1521, or may modify or terminate relief under subsection (c), 
     only if the interests of the creditors and other interested 
     entities, including the debtor, are sufficiently protected.
       ``(b) The court may subject relief granted under section 
     1519 or 1521, or the operation of the debtor's business under 
     section 1520(a)(3) of this title, to conditions it considers 
     appropriate, including the giving of security or the filing 
     of a bond.
       ``(c) The court may, at the request of the foreign 
     representative or an entity affected by relief granted under 
     section 1519 or 1521, or at its own motion, modify or 
     terminate such relief.
       ``(d) Section 1104(d) shall apply to the appointment of an 
     examiner under this chapter. Any examiner shall comply with 
     the qualification requirements imposed on a trustee by 
     section 322.

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

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

     ``Sec. 1524. Intervention by a foreign representative

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

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

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

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

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

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

     ``Sec. 1527. Forms of cooperation

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

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

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

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

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

       ``In matters referred to in section 1501, with respect to 
     more than 1 foreign proceeding regarding the debtor, the 
     court shall seek cooperation and coordination under sections 
     1525, 1526, and 1527, and the following shall apply:
       ``(1) Any relief granted under section 1519 or 1521 to a 
     representative of a foreign nonmain proceeding after 
     recognition of a foreign main proceeding must be consistent 
     with the foreign main proceeding.

[[Page H2753]]

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

       (a) Applicability of Chapters.--Section 103 of title 11, 
     United States Code, is amended--
       (1) in subsection (a), by inserting before the period the 
     following: ``, and this chapter, sections 307, 304, 555 
     through 557, 559, and 560 apply in a case under chapter 15''; 
     and
       (2) by adding at the end the following:
       ``(j) Chapter 15 applies only in a case under such chapter, 
     except that--
       ``(1) sections 1505, 1513, and 1514 apply in all cases 
     under this title; and
       ``(2) section 1509 applies whether or not a case under this 
     title is pending.''.
       (b) Definitions.--Paragraphs (23) and (24) of title 11, 
     United States Code, are amended to read as follows:
       ``(23) `foreign proceeding' means a collective judicial or 
     administrative proceeding in a foreign country, including an 
     interim proceeding, under a law relating to insolvency or 
     adjustment of debt 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) 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 striking ``or 13'' and 
     inserting ``13, or 15,'' after ``chapter''.
       (4) Section 305(a)(2) of title 11, United States Code, is 
     amended to read:
       ``(2)(A) a petition under section 1515 of this title for 
     recognition of a foreign proceeding has been granted; and
       ``(B) the purposes of chapter 15 of this title would be 
     best served by such dismissal or suspension.''.
       (5) Section 508 of title 11, United States Code, is amended 
     by striking subsection (a) and by striking out the letter 
     ``(b)'' at the beginning of the second paragraph.

                 TITLE X--FINANCIAL CONTRACT PROVISIONS

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

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

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

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

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

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

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date the contract 
     is entered into, including, but not limited to, a repurchase 
     agreement, reverse repurchase agreement, consignment, lease, 
     swap, hedge transaction, deposit, loan, option, allocated 
     transaction, unallocated transaction, or any other similar 
     agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);

[[Page H2754]]

       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);

       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or

       ``(V) a security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV).''.

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

       ``(I) mean an agreement, including related terms, which 
     provides for the transfer of 1 or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in the Securities Exchange Act of 1934), mortgage loans, 
     interests in mortgage-related securities or mortgage loans, 
     eligible bankers' acceptances, qualified foreign government 
     securities or securities that are direct obligations of, or 
     that are fully guaranteed by, the United States or any agency 
     of the United States against the transfer of funds by the 
     transferee of such certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests with a 
     simultaneous agreement by such transferee to transfer to the 
     transferor thereof certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests as described 
     above, at a date certain not later than 1 year after such 
     transfers or on demand, against the transfer of funds, or any 
     other similar agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan unless the 
     Corporation determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means a security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V).

     For purposes of this clause, the term `qualified foreign 
     government security' means a security that is a direct 
     obligation of, or that is fully guaranteed by, the central 
     government of a member of the Organization for Economic 
     Cooperation and Development (as determined by regulation or 
     order adopted by the appropriate Federal banking 
     authority).''.
       (f) Definition of Swap Agreement.--Section 11(e)(8)(D)(iv) 
     of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)(D)(vi)) is amended to read as follows:
       ``(vi) Swap agreement.--The term `swap agreement' means--

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

     Such term is applicable for purposes of this 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 promulgated by the Securities and 
     Exchange Commission or the Commodity Futures Trading 
     Commission.''.
       (g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of 
     the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)(D)(viii)) is amended to read as follows:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the depository 
     institutions's equity of redemption.''.
       (h) Treatment of Qualified Financial Contracts.--Section 
     11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)) is amended--
       (1) in subparagraph (A), by striking ``paragraph (10)'' and 
     inserting ``paragraphs (9) and (10)'';
       (2) in subparagraph (A)(i), by striking ``to cause the 
     termination or liquidation'' and inserting ``such person has 
     to cause the termination, liquidation, or acceleration'';
       (3) by amending subparagraph (A)(ii) to read as follows:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''; and
       (4) by amending subparagraph (E)(ii) to read as follows:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''.
       (i) Avoidance of Transfers.--Section 11(e)(8)(C)(i) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is 
     amended by inserting ``section 5242 of the Revised Statutes 
     of the United States (12 U.S.C. 91) or any other Federal or 
     State law relating to the avoidance of preferential or 
     fraudulent transfers,'' before ``the Corporation''.

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

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

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

       (a) Transfers of Qualified Financial Contracts to Financial 
     Institutions.--Section 11(e)(9) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(9)) is amended to read as 
     follows:

[[Page H2755]]

       ``(9) Transfer of qualified financial contracts.--
       ``(A) In general.--In making any transfer of assets or 
     liabilities of a depository institution in default which 
     includes any qualified financial contract, the conservator or 
     receiver for such depository institution shall either--
       ``(i) transfer to 1 financial institution, other than a 
     financial institution for which a conservator, receiver, 
     trustee in bankruptcy, or other legal custodian has been 
     appointed or which is otherwise the subject of a bankruptcy 
     or insolvency proceeding--

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

       ``(ii) transfer none of the qualified financial contracts, 
     claims, property or other credit enhancement referred to in 
     clause (i) (with respect to such person and any affiliate of 
     such person).
       ``(B) Transfer to foreign bank, foreign financial 
     institution, or branch or agency of a foreign bank or 
     financial institution.--In transferring any qualified 
     financial contracts and related claims and property pursuant 
     to subparagraph (A)(i), the conservator or receiver for such 
     depository institution shall not make such transfer to a 
     foreign bank, financial institution organized under the laws 
     of a foreign country, or a branch or agency of a foreign bank 
     or financial institution unless, under the law applicable to 
     such bank, financial institution, branch or agency, to the 
     qualified financial contracts, and to any netting contract, 
     any security agreement or arrangement or other credit 
     enhancement related to 1 or more qualified financial 
     contracts, the contractual rights of the parties to such 
     qualified financial contracts, netting contracts, security 
     agreements or arrangements, or other credit enhancements are 
     enforceable substantially to the same extent as permitted 
     under this section.
       ``(C) Transfer of contracts subject to the rules of a 
     clearing organization.--In the event that a conservator or 
     receiver transfers any qualified financial contract and 
     related claims, property and credit enhancements pursuant to 
     subparagraph (A)(i) and such contract is subject to the rules 
     of a clearing organization, the clearing organization shall 
     not be required to accept the transferee as a member by 
     virtue of the transfer.
       ``(D) Definition.--For purposes of this section, the term 
     `financial institution' means a broker or dealer, a 
     depository institution, a futures commission merchant, or any 
     other institution as determined by the Corporation by 
     regulation to be a financial institution.''.
       (b) Notice to Qualified Financial Contract 
     Counterparties.--Section 11(e)(10)(A) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended by 
     amending the flush material following clause (ii) to read as 
     follows: ``the conservator or receiver shall notify any 
     person who is a party to any such contract of such transfer 
     by 5:00 p.m. (eastern time) on the business day following the 
     date of the appointment of the receiver, in the case of a 
     receivership, or the business day following such transfer, in 
     the case of a conservatorship.''.
       (c) Rights Against Receiver and Treatment of Bridge 
     Banks.--Section 11(e)(10) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1821(e)(10)) is further amended--
       (1) by redesignating subparagraph (B) as subparagraph (D); 
     and
       (2) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with an insured depository institution may 
     not exercise any right such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(A) or 
     section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 solely by reason of or 
     incidental to the appointment of a receiver for the 
     depository institution (or the insolvency or financial 
     condition of the depository institution for which the 
     receiver has been appointed)--

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

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

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

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

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

     SEC. 1005. CLARIFYING AMENDMENT RELATING TO MASTER 
                   AGREEMENTS.

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

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

       (a) Definitions.--Section 402 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
     4402) is amended--
       (1) in paragraph (6)--
       (A) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively;
       (B) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) an uninsured national bank or an uninsured State bank 
     that is a member of the Federal Reserve System if the 
     national bank or State member bank is not eligible to make 
     application to become an insured bank under section 5 of the 
     Federal Deposit Insurance Act;''; and
       (C) by amending subparagraph (C) (as redesignated) to read 
     as follows:
       ``(C) a branch or agency of a foreign bank, a foreign bank 
     and any branch or agency of the foreign bank, or the foreign 
     bank that established the branch or agency, as those terms 
     are defined in section 1(b) of the International Banking Act 
     of 1978;'';
       (2) in paragraph (11), by adding before the period ``and 
     any other clearing organization with which such clearing 
     organization has a netting contract'';
       (3) by amending paragraph (14)(A)(i) to read as follows:
       ``(i) means a contract or agreement between 2 or more 
     financial institutions, clearing organizations, or members 
     that provides for netting present or future payment 
     obligations or payment entitlements (including liquidation or 
     closeout values relating to such obligations or entitlements) 
     among the parties to the agreement; and''; and
       (4) by adding at the end the following new paragraph:
       ``(15) Payment.--The term `payment' means a payment of 
     United States dollars, another currency, or a composite 
     currency, and a noncash delivery, including a payment or 
     delivery to liquidate an unmatured obligation.''.

[[Page H2756]]

       (b) Enforceability of Bilateral Netting Contracts.--Section 
     403 of the Federal Deposit Insurance Corporation Improvement 
     Act of 1991 (12 U.S.C. 4403) is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act or any order authorized under section 5(b)(2) of the 
     Securities Investor Protection Act of 1970, the covered 
     contractual payment obligations and the covered contractual 
     payment entitlements between any 2 financial institutions 
     shall be netted in accordance with, and subject to the 
     conditions of, the terms of any applicable netting contract 
     (except as provided in section 561(b)(2) of title 11).''; and
       (2) by adding at the end the following new subsection:
       ``(f) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to 1 or more netting contracts 
     between any 2 financial institutions shall be enforceable in 
     accordance with their terms (except as provided in section 
     561(b)(2) of title 11) and shall not be stayed, avoided, or 
     otherwise limited by any State or Federal law (other than 
     paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of 
     the Federal Deposit Insurance Act and section 5(b)(2) of the 
     Securities Investor Protection Act of 1970).''.
       (c) Enforceability of Clearing Organization Netting 
     Contracts.--Section 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 4404) is 
     amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act and any order authorized under section 5(b)(2) of the 
     Securities Investor Protection Act of 1970, the covered 
     contractual payment obligations and the covered contractual 
     payment entitlements of a member of a clearing organization 
     to and from all other members of a clearing organization 
     shall be netted in accordance with and subject to the 
     conditions of any applicable netting contract (except as 
     provided in section 561(b)(2) of title 11, United States 
     Code).''; and
       (2) by adding at the end the following new subsection:
       ``(h) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to 1 or more netting contracts 
     between any 2 members of a clearing organization shall be 
     enforceable in accordance with their terms (except as 
     provided in section 561(b)(2) of title 11, United States 
     Code) and shall not be stayed, avoided, or otherwise limited 
     by any State or Federal law other than paragraphs (8)(E), 
     (8)(F), and (10)(B) of section 11(e) of the Federal Deposit 
     Insurance Act and section 5(b)(2) of the Securities Investor 
     Protection Act of 1970.''.
       (d) Enforceability of Contracts With Uninsured National 
     Banks and Uninsured Federal Branches and Agencies.--The 
     Federal Deposit Insurance Corporation Improvement Act of 1991 
     (12 U.S.C. 4401 et seq.) is amended--
       (1) by redesignating section 407 as section 408; and
       (2) by adding after section 406 the following new section:

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

       ``(a) In General.--Notwithstanding any other provision of 
     law, paragraphs (8), (9), (10), and (11) of section 11(e) of 
     the Federal Deposit Insurance Act shall apply to an uninsured 
     national bank or uninsured Federal branch or Federal agency 
     except--
       ``(1) any reference to the `Corporation as receiver' or 
     `the receiver or the Corporation' shall refer to the receiver 
     of an uninsured national bank or uninsured Federal branch or 
     Federal agency appointed by the Comptroller of the Currency;
       ``(2) any reference to the `Corporation' (other than in 
     section 11(e)(8)(D) of such Act), the `Corporation, whether 
     acting as such or as conservator or receiver', a `receiver', 
     or a `conservator' shall refer to the receiver or conservator 
     of an uninsured national bank or uninsured Federal branch or 
     Federal agency appointed by the Comptroller of the Currency; 
     and
       ``(3) any reference to an `insured depository institution' 
     or `depository institution' shall refer to an uninsured 
     national bank or an uninsured Federal branch or Federal 
     agency.
       ``(b) Liability.--The liability of a receiver or 
     conservator of an uninsured national bank or uninsured 
     Federal branch or agency shall be determined in the same 
     manner and subject to the same limitations that apply to 
     receivers and conservators of insured depository institutions 
     under section 11(e) of the Federal Deposit Insurance Act.
       ``(c) Regulatory Authority.--
       ``(1) In general.--The Comptroller of the Currency, in 
     consultation with the Federal Deposit Insurance Corporation, 
     may promulgate regulations to implement this section.
       ``(2) Specific requirement.--In promulgating regulations to 
     implement this section, the Comptroller of the Currency shall 
     ensure that the regulations generally are consistent with the 
     regulations and policies of the Federal Deposit Insurance 
     Corporation adopted pursuant to the Federal Deposit Insurance 
     Act.
       ``(d) Definitions.--For purposes of this section, the terms 
     `Federal branch', `Federal agency', and `foreign bank' have 
     the same meaning as in section 1(b) of the International 
     Banking Act.''.

     SEC. 1007. BANKRUPTCY CODE AMENDMENTS.

       (a) Definitions of Forward Contract, Repurchase Agreement, 
     Securities Clearing Agency, Swap Agreement, Commodity 
     Contract, and Securities Contract.--Title 11, United States 
     Code, is amended--
       (1) in section 101--
       (A) in paragraph (25)--
       (i) by striking ``means a contract'' and inserting 
     ``means--
       ``(A) a contract'';
       (ii) by striking ``, or any combination thereof or option 
     thereon;'' and inserting ``, or any other similar 
     agreement;''; and
       (iii) by adding at the end the following:
       ``(B) any combination of agreements or transactions 
     referred to in subparagraphs (A) and (C);
       ``(C) any option to enter into an agreement or transaction 
     referred to in subparagraph (A) or (B);
       ``(D) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), or (C), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this paragraph, except that such master agreement shall 
     be considered to be a forward contract under this paragraph 
     only with respect to each agreement or transaction under such 
     master agreement that is referred to in subparagraph (A), (B) 
     or (C); or
       ``(E) a security agreement or arrangement, or other credit 
     enhancement related to any 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) in paragraph (46), by striking ``on any day during the 
     period beginning 90 days before the date of'' and replacing 
     it with ``at any time before'';
       (C) by amending paragraph (47) to read as follows:
       ``(47) `repurchase agreement' (which definition also 
     applies to a reverse repurchase agreement) means--
       ``(i) an agreement, including related terms, which provides 
     for the transfer of 1 or more certificates of deposit, 
     mortgage-related securities (as defined in the Securities 
     Exchange Act of 1934), mortgage loans, interests in mortgage-
     related securities or mortgage loans, eligible bankers' 
     acceptances, qualified foreign government securities; or 
     securities that are direct obligations of, or that are fully 
     guaranteed by, the United States or any agency of the United 
     States against the transfer of funds by the transferee of 
     such certificates of deposit, eligible bankers' acceptances, 
     securities, loans, or interests; with a simultaneous 
     agreement by such transferee to transfer to the transferor 
     thereof certificates of deposit, eligible bankers' 
     acceptance, securities, loans, or interests of the kind 
     described above, at a date certain not later than 1 year 
     after such transfer or on demand, against the transfer of 
     funds;
       ``(ii) any combination of agreements or transactions 
     referred to in clauses (i) and (iii);
       ``(iii) an option to enter into an agreement or transaction 
     referred to in clause (i) or (ii);
       ``(iv) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), or (iii), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a repurchase 
     agreement under this paragraph, except that such master 
     agreement shall be considered to be a repurchase agreement 
     under this paragraph only with respect to each agreement or 
     transaction under the master agreement that is referred to in 
     clause (i), (ii), or (iii); or
       ``(v) a security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction 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) does not include a repurchase obligation under a 
     participation in a commercial mortgage loan;

     and, for purposes of this paragraph, the term `qualified 
     foreign government security' means a security that is a 
     direct obligation of, or that is fully guaranteed by, the 
     central government of a member of the Organization for 
     Economic Cooperation and Development;'';
       (D) 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
       (E) by amending paragraph (53B) to read as follows:
       ``(53B) `swap agreement'
       ``(A) means--
       ``(i) any agreement, including the terms and conditions 
     incorporated by reference in such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a

[[Page H2757]]

     spot, same day-tomorrow, tomorrow-next, forward, or other 
     foreign exchange or precious metals agreement; a currency 
     swap, option, future, or forward agreement; an equity index 
     or an equity swap, option, future, or forward agreement; a 
     debt index or a debt swap, option, future, or forward 
     agreement; a credit spread or a credit swap, option, future, 
     or forward agreement; or a commodity index or a commodity 
     swap, option, future, or forward agreement;
       ``(ii) any agreement or transaction similar to any other 
     agreement or transaction referred to in this paragraph that--

       ``(I) is presently, 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 1 or more 
     rates, currencies commodities, equity securities, or other 
     equity instruments, debt securities or other debt 
     instruments, or on an economic index or measure of economic 
     risk or value;

       ``(iii) any combination of agreements or transactions 
     referred to in this paragraph;
       ``(iv) any option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(v) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), (iii), or (iv), 
     together with all supplements to any such master agreement, 
     and without regard to whether the master agreement contains 
     an agreement or transaction that is not a swap agreement 
     under this paragraph, except that the master agreement shall 
     be considered to be a swap agreement under this paragraph 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in clause (i), (ii), 
     (iii), or (iv); or
       ``(B) any security agreement or arrangement or other credit 
     enhancement related to any agreements or transactions 
     referred to in subparagraph (A); and
       ``(C) is applicable for purposes of this title only and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     and the regulations prescribed by the Securities and Exchange 
     Commission or the Commodity Futures Trading Commission.'';
       (2) by amending section 741(7) to read as follows:
       ``(7) `securities contract'--
       ``(A) means--
       ``(i) a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit or mortgage loans or interests 
     therein (including an interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security certificate of 
     deposit, loan, interest, group or index or option;
       ``(ii) any option entered into on a national securities 
     exchange relating to foreign currencies;
       ``(iii) the guarantee by or to any securities clearing 
     agency of a settlement of cash, securities, certificates of 
     deposit 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 such security certificate of 
     deposit, loan, interest, group or index or option;
       ``(iv) any margin loan;
       ``(v) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(vi) any combination of the agreements or transactions 
     referred to in this paragraph;
       ``(vii) any option to enter into any agreement or 
     transaction referred to in this paragraph;
       ``(viii) a master 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 any 
     such master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a securities contract under this paragraph, except that 
     such master agreement shall be considered to be a securities 
     contract under this paragraph only with respect to each 
     agreement or transaction under such master agreement that is 
     referred to in clause (i), (ii), (iii), (iv), (v), (vi), or 
     (vii); or
       ``(ix) any security agreement or arrangement, or other 
     credit enhancement, related to any agreement or transaction 
     referred to in this paragraph, but not to exceed the actual 
     value of such contract on the date of the filing of the 
     petition; and
       ``(B) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan.''; and
       (3) in section 761(4)--
       (A) by striking ``or'' at the end of subparagraph (D); and
       (B) by adding at the end the following:
       ``(F) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(G) any combination of the agreements or transactions 
     referred to in this paragraph;
       ``(H) any option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(I) a master 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 the 
     master netting agreement provides for an agreement or 
     transaction that is not a commodity contract under this 
     paragraph, except that the master agreement shall be 
     considered to be a commodity contract under this paragraph 
     only with respect to each agreement or transaction under the 
     master 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 related to any agreement or transaction referred 
     to in this paragraph, but not to exceed the actual value of 
     such contract on the date of the filing of the petition;''.
       (b) Definitions of Financial Institution, Financial 
     Participant, and Forward Contract Merchant.--Section 101 of 
     title 11, United States Code, is amended--
       (1) by amending paragraph (22) to read as follows:
       ``(22) `financial institution' means--
       ``(A) a Federal reserve bank, or an entity (domestic or 
     foreign) that is a commercial or savings bank, industrial 
     savings bank, savings and loan association, trust company, or 
     receiver or conservator for such entity and, when any such 
     Federal reserve bank, receiver, conservator or entity is 
     acting as agent or custodian for a customer in connection 
     with a securities contract, as defined in section 741 of this 
     title, such customer; or
       ``(B) in connection with a securities contract, as defined 
     in section 741 of this title, an investment company 
     registered under the Investment Company Act of 1940;'';
       (2) by inserting after paragraph (22) the following:
       ``(22A) `financial participant' means an entity that, at 
     the time it enters into a securities contract, commodity 
     contract or forward contract, or at the time of the filing of 
     the petition, has 1 or more agreements or transactions that 
     is described in section 561(a)(2) with the debtor or any 
     other entity (other than an affiliate) of a total gross 
     dollar value of at least $1,000,000,000 in notional or actual 
     principal amount outstanding on any day during the previous 
     15-month period, or has gross mark-to-market positions of at 
     least $100,000,000 (aggregated across counterparties) in 1 or 
     more such agreement or transaction with the debtor or any 
     other entity (other than an affiliate) on any day during the 
     previous 15-month period;''; and
       (3) by amending paragraph (26) to read as follows:
       ``(26) `forward contract merchant' means a Federal reserve 
     bank, or an entity whose business consists in whole or in 
     part of entering into forward contracts as or with merchants 
     or in a commodity, as defined or in section 761 of this 
     title, or any similar good, article, service, right, or 
     interest which is presently or in the future becomes the 
     subject of dealing or in the forward contract trade;''.
       (c) Definition of Master Netting Agreement and Master 
     Netting Agreement Participant.--Section 101 of title 11, 
     United States Code, is amended by inserting after paragraph 
     (38) the following new paragraphs:
       ``(38A) `master netting agreement' means an agreement 
     providing for the exercise of rights, including rights of 
     netting, setoff, liquidation, termination, acceleration, or 
     closeout, under or in connection with 1 or more contracts 
     that are described in any 1 or more of paragraphs (1) through 
     (5) of section 561(a), or any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     of the foregoing. If a master netting agreement contains 
     provisions relating to agreements or transactions that are 
     not contracts described in paragraphs (1) through (5) of 
     section 561(a), the master netting agreement shall be deemed 
     to be a master netting agreement only with respect to those 
     agreements or transactions that are described in any 1 or 
     more of the paragraphs (1) through (5) of section 561(a);
       ``(38B) `master netting agreement participant' means an 
     entity that, at any time before the filing of the petition, 
     is a party to an outstanding master netting agreement with 
     the debtor;''.
       (d) Swap Agreements, Securities Contracts, Commodity 
     Contracts, Forward Contracts, Repurchase Agreements, and 
     Master Netting Agreements Under the Automatic-Stay.--
       (1) In general.--Section 362(b) of title 11, United States 
     Code, as amended by sections 118, 132, 136, 142, 203 and 818, 
     is amended--
       (A) in paragraph (6), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (B) in paragraph (7), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (C) by amending paragraph (17) to read as follows:
       ``(17) under subsection (a), of the setoff by a swap 
     participant of a mutual debt and claim under or in connection 
     with 1 or more swap 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 
     any swap agreement against any payment due to the debtor from 
     the swap participant under or in connection with any swap 
     agreement or against cash, securities, or other property held 
     by, pledged to, and under the control of,

[[Page H2758]]

     or due from such swap participant to margin guarantee, 
     secure, or settle a swap agreement;'';
       (D) in paragraph (30) by striking ``or'' at the end;
       (E) in paragraph (31) by striking the period at the end and 
     inserting ``; or''; and
       (F) by inserting after paragraph (31) the following new 
     paragraph:
       ``(32) 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 sections 120, 302, and 412, 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), or (31) of subsection (b) shall not be 
     stayed by any 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, as 
     amended by sections 207 and 302, is amended--
       (1) in subsection (g) (as added by section 103 of Public 
     Law 101-311)--
       (A) by striking ``under a swap agreement'';
       (B) by striking ``in connection with a swap agreement'' and 
     inserting ``under or in connection with any swap agreement''; 
     and
       (2) by adding at the end the following:
       ``(j) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), 
     and 548(b) of this title, the trustee may not avoid a 
     transfer made by or to a master netting agreement participant 
     under or in connection with any master netting agreement or 
     any individual contract covered thereby that is made before 
     the commencement of the case, except under section 
     548(a)(1)(A) of this title, and except to the extent the 
     trustee could otherwise avoid such a transfer made under an 
     individual contract covered by such master netting 
     agreement.''.
       (f) Fraudulent Transfers of Master Netting Agreements.--
     Section 548(d)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (C), by striking ``and'';
       (2) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) a master netting agreement participant that receives 
     a transfer in connection with a master netting agreement or 
     any individual contract covered thereby takes for value to 
     the extent of such transfer, except, with respect to a 
     transfer under any individual contract covered thereby, to 
     the extent such master netting agreement participant 
     otherwise did not take (or is otherwise not deemed to have 
     taken) such transfer for value.''.
       (g) Termination or Acceleration of Securities Contracts.--
     Section 555 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

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

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

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

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

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

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

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

       (2) in the first sentence, by striking ``termination of a 
     swap agreement'' and inserting ``liquidation, termination, or 
     acceleration of 1 or more swap agreements''; and
       (3) by striking ``in connection with any swap agreement'' 
     and inserting ``in connection with the termination, 
     liquidation, or acceleration of 1 or more swap agreements''.
       (k) Liquidation, Termination, Acceleration, or Offset Under 
     a Master Netting Agreement and Across Contracts.--(1) Title 
     11, United States Code, is amended by inserting after section 
     560 the following:

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

       ``(a) In General.--Subject to subsection (b), the exercise 
     of any contractual right, because of a condition of the kind 
     specified in section 365(e)(1), to cause the termination, 
     liquidation, or acceleration of or to offset or net 
     termination values, payment amounts or other transfer 
     obligations arising under or in connection with 1 or more (or 
     the termination, liquidation, or acceleration of 1 or more)--
       ``(1) securities contracts, as defined in section 741(7);
       ``(2) commodity contracts, as defined in section 761(4);
       ``(3) forward contracts;
       ``(4) repurchase agreements;
       ``(5) swap agreements; or
       ``(6) master netting agreements,

     shall not be stayed, avoided, or otherwise limited by 
     operation of any provision of this title or by any order of a 
     court or administrative agency in any proceeding under this 
     title.
       ``(b) Exception.--
       ``(1) A party may exercise a contractual right described in 
     subsection (a) to terminate, liquidate, or accelerate only to 
     the extent that such party could exercise such a right under 
     section 555, 556, 559, or 560 for each individual contract 
     covered by the master netting agreement in issue.
       ``(2) If a debtor is a commodity broker subject to 
     subchapter IV of chapter 7 of this title--
       ``(A) a party may not net or offset an obligation to the 
     debtor arising under, or in connection with, a commodity 
     contract against any claim arising under, or in connection 
     with, other instruments, contracts, or agreements listed in 
     subsection (a) except to the extent the party has 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 listed in subsection (a).
       ``(c) Definition.--As used in this section, the term 
     `contractual right' includes a right set forth in a rule or 
     bylaw of a national securities exchange, a national 
     securities association, or a securities clearing agency, a 
     right set forth in a bylaw of a clearing organization or 
     contract market or in a resolution of the governing board 
     thereof, and a right, whether or not evidenced in writing, 
     arising under common law, under law merchant, or by reason of 
     normal business practice.''.
       (2) Conforming amendment.--The table of sections of chapter 
     9 of title 11, United States Code, is amended by inserting 
     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.

       (l) Ancillary Proceedings.--Section 304 of title 11, United 
     States Code, as amended by section 215, is amended by adding 
     at the end the following:
       ``(c) Any provisions of this title relating to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, or master netting agreements 
     shall apply in a case ancillary to a foreign proceeding under 
     this section or any other section of this title, so that 
     enforcement of contractual provisions of such contracts and 
     agreements in accordance with their terms will not be stayed 
     or otherwise limited by operation of any provision of this 
     title or by order of a court in any case under this title, 
     and to limit avoidance powers to the same extent as in a 
     proceeding under chapter 7 or 11 of this title (such 
     enforcement not to be limited based on the presence or 
     absence of assets of the debtor in the United States).''.
       (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:

[[Page H2759]]

     ``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, 560 or 561 of this 
     title)'' before the period; and
       (2) in subsection (b)(1), by striking ``362(b)(14),'' and 
     inserting ``362(b)(17), 362(b)(19), 555, 556, 559, 560, 
     561''.
       (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 at the end ``, 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 of chapter 5--
       (A) by amending the items relating to sections 555 and 556 
     to read as follows:

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

       (B) by amending the items relating to sections 559 and 560 
     to read as follows:

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

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

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

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

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

     SEC. 1008. RECORDKEEPING REQUIREMENTS.

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

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

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

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

     SEC. 1010. DAMAGE MEASURE.

       (a) Title 11, United States Code, as amended by section 
     1007, is amended--
       (1) by inserting after section 561 the following:

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

       ``If the trustee rejects a swap agreement, securities 
     contract as defined in section 741 of this title, forward 
     contract, commodity contract (as defined in section 761 of 
     this title) repurchase agreement, or master netting agreement 
     pursuant to section 365(a) of this title, or if a forward 
     contract merchant, stockbroker, financial institution, 
     securities clearing agency, repo participant, financial 
     participant, master netting agreement participant, or swap 
     participant liquidates, terminates, or accelerates such 
     contract or agreement, damages shall be measured as of the 
     earlier of--
       ``(1) the date of such rejection; or
       ``(2) the date of such liquidation, termination, or 
     acceleration.''; and
       (2) in the table of sections of chapter 5 by inserting 
     after the item relating to section 561 the following:

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

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

     SEC. 1011. SIPC STAY.

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

     SEC. 1012. ASSET-BACKED SECURITIZATIONS.

       Section 541 of title 11, United States Code, as amended by 
     section 150, is amended--
       (1) by redesignating paragraph (5) of subsection (b) as 
     paragraph (6);
       (2) by inserting after paragraph (4) of subsection (b) the 
     following new paragraph:
       ``(5) any eligible asset (or proceeds thereof), to the 
     extent that such eligible asset was transferred by the 
     debtor, before the date of commencement of the case, to an 
     eligible entity in connection with an asset-backed 
     securitization, except to the extent such asset (or proceeds 
     or value thereof) may be recovered by the trustee under 
     section 550 by virtue of avoidance under section 548(a);''; 
     and
       (3) 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

[[Page H2760]]

     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 residual interest in property 
     subject to receivables included in such financial assets 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; and
       ``(5) the term `transferred' means the debtor, pursuant to 
     a written agreement, represented and warranted that eligible 
     assets were sold, contributed, or otherwise conveyed with the 
     intention of removing them from the estate of the debtor 
     pursuant to subsection (b)(5), irrespective, without 
     limitation of--
       ``(A) whether the debtor directly or indirectly obtained or 
     held an interest in the issuer or in any securities issued by 
     the issuer;
       ``(B) whether the debtor had an obligation to repurchase or 
     to service or supervise the servicing of all or any portion 
     of such eligible assets; or
       ``(C) the characterization of such sale, contribution, or 
     other conveyance for tax, accounting, regulatory reporting, 
     or other purposes.''.

     SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIREMENTS.

       The 3d sentence of the 3d undesignated paragraph of section 
     16 of the Federal Reserve Act (12 U.S.C. 412) is amended by 
     striking ``acceptances acquired under the provisions of 
     section 13 of this Act'' and inserting ``acceptances acquired 
     under section 10A, 10B, 13, or 13A of this Act''.

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

       (a) Effective Date.--This title shall take effect on the 
     date of the 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 XI--TECHNICAL CORRECTIONS

     SEC. 1101. DEFINITIONS.

       Section 101 of title 11, United States Code, as amended by 
     sections 102, 105, 132, 138, 301, 302, 402, 902, and 1007, is 
     amended--
       (1) by striking ``In this title--'' and inserting ``In this 
     title:'';
       (2) in each paragraph, by inserting ``The term'' after the 
     paragraph designation;
       (3) in paragraph (35)(B), by striking ``paragraphs (21B) 
     and (33)(A)'' and inserting ``paragraphs (23) and (35)'';
       (4) in each of paragraphs (35A) and (38), by striking ``; 
     and'' at the end and inserting a period;
       (5) in paragraph (51B)--
       (A) by inserting ``who is not a family farmer'' after 
     ``debtor'' the first place it appears; and
       (B) by striking ``thereto having aggregate'' and all that 
     follows through the end of the paragraph;
       (6) by amending paragraph (54) to read as follows:
       ``(54) The term `transfer' means--
       ``(A) the creation of a lien;
       ``(B) the retention of title as a security interest;
       ``(C) the foreclosure of a debtor's equity of redemption; 
     or
       ``(D) each mode, direct or indirect, absolute or 
     conditional, voluntary or involuntary, of disposing of or 
     parting with--
       ``(i) property; or
       ``(ii) an interest in property;'';
       (7) in each of paragraphs (1) through (35), in each of 
     paragraphs (36) and (37), and in each of paragraphs (40) 
     through (55) (including paragraph (54), as amended by 
     paragraph (6) of this section), by striking the semicolon at 
     the end and inserting a period; and
       (8) by redesignating paragraphs (4) through (55), including 
     paragraph (54), as amended by paragraph (6) of this section, 
     in entirely numerical sequence.

     SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.

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

     SEC. 1103. EXTENSION OF TIME.

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

     SEC. 1104. TECHNICAL AMENDMENTS.

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

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

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

     SEC. 1106. LIMITATION ON COMPENSATION OF PROFESSIONAL 
                   PERSONS.

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

     SEC. 1107. SPECIAL TAX PROVISIONS.

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

     SEC. 1108. EFFECT OF CONVERSION.

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

     SEC. 1109. 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. 1110. PRIORITIES.

       Section 507(a) of title 11, United States Code, as amended 
     by section 323, is amended in paragraph (4), as so 
     redesignated by section 142, by striking the semicolon at the 
     end and inserting a period.

     SEC. 1111. EXEMPTIONS.

       Section 522(g)(2) of title 11, United States Code, is 
     amended by striking ``subsection (f)(2)'' and inserting 
     ``subsection (f)(1)(B)''.

     SEC. 1112. EXCEPTIONS TO DISCHARGE.

       Section 523 of title 11, United States Code, as amended by 
     section 146, is amended--
       (1) in subsection (a)(3), by striking ``or (6)'' each place 
     it appears and inserting ``(6), or (15)'';
       (2) as amended by section 304(e) of Public Law 103-394 (108 
     Stat. 4133), in paragraph (15), by transferring such 
     paragraph so as to insert it after paragraph (14A) of 
     subsection (a);
       (3) in subsection (a)(9), by inserting ``, watercraft, or 
     aircraft'' after ``motor vehicle'';
       (4) in subsection (a)(15), as so redesignated by paragraph 
     (2) of this subsection, by inserting ``to a spouse, former 
     spouse, or child of the debtor and'' after ``(15)''; and
       (5) in subsection (e), by striking ``a insured'' and 
     inserting ``an insured''.

     SEC. 1113. EFFECT OF DISCHARGE.

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

     SEC. 1114. 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. 1115. 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. 1116. 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 transfer 
     made 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 transfer may 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 is pending or commenced on or 
     after the date of enactment of this Act.

     SEC. 1117. 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. 1118. DISPOSITION OF PROPERTY OF THE ESTATE.

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

     SEC. 1119. GENERAL PROVISIONS.

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

     SEC. 1120. APPOINTMENT OF ELECTED TRUSTEE.

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

[[Page H2761]]

       ``(B) In the case of any dispute arising out of an election 
     under subparagraph (A), the court shall resolve the 
     dispute.''.

     SEC. 1121. 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. 1122. 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. 1123. 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. 1124. 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. 1125. 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. 1126. TRANSFERS MADE BY NONPROFIT CHARITABLE 
                   CORPORATIONS.

       (a) Sale of Property of Estate.--Section 363(d) of title 
     11, United States Code, is amended--
       (1) by striking ``only'' and all that follows through the 
     end of the subsection and inserting ``only--
       ``(1) in accordance with applicable nonbankruptcy law that 
     governs the transfer of property by a corporation or trust 
     that is not a moneyed, business, or commercial corporation or 
     trust; and
       ``(2) to the extent not inconsistent with any relief 
     granted under subsection (c), (d), (e), or (f) of section 362 
     of this title.''.
       (b) Confirmation of Plan for Reorganization.--Section 
     1129(a) of title 11, United States Code, as amended by 
     section 140, 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, as amended by section 1102, 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 
     deemed to require the court in which a case under chapter 11 
     is pending to remand or refer any proceeding, issue, or 
     controversy to any other court or to require the approval of 
     any other court for the transfer of property.

     SEC. 1127. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO 
                   INCUR FINANCE CHARGES.

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

     SEC. 1128. 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. 1129. TRUSTEES.

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

      TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

     SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as provided otherwise in this 
     Act, this Act and the amendments made by this Act shall take 
     effect 180 days after the date of the enactment of this Act.
       (b) Application of Amendments.--Except as otherwise 
     provided in this Act, the amendments made by this Act shall 
     not apply with respect to cases commenced under title 11 of 
     the United States Code before the effective date of this Act.


Modification of Amendment in the Nature of a Substitute No. 11 Offered 
                             by Mr. Nadler

  Mr. NADLER. Mr. Chairman, I ask unanimous consent that the amendment 
in the nature of a substitute be modified in the form I have placed at 
the desk.
  The CHAIRMAN. The Clerk will report the modification.

  The Clerk read as follows:
       Modification of amendment in the nature of a substitute No. 
     11 offered by Mr. Nadler:
       Page 7, lines 19 and 24, strike ``less than or equal to'' 
     each place it appears and insert ``greater than''.
       Page 9, line 8, insert ``allowable'' after ``debtor's''.
       Page 11, line 13, strike ``hall'' and insert ``shall''.
       Page 16, lines 7 and 12, strike ``less than or equal to'' 
     each place it appears and insert ``greater than''.
       Page 17, line 6, strike ``less than or equal to'' and 
     insert ``greater than''.

  Mr. GEKAS (during the reading). Mr. Chairman, I ask unanimous consent 
that the modification be considered as read and printed in the Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Pennsylvania?
  There was no objection.
  The CHAIRMAN. Is there objection to the modification?
  Mr. GEKAS. Mr. Chairman, reserving the right to object, I may object, 
but I probably will not.
  The gentleman from New York has offered through his counsel in 
consultation with me that these are simply technical amendments. They 
do not, I trust, constitute sloppy work on the part of anybody, it is 
simply that we want to make sure that your amendment is technically 
correct. Is that correct, may I ask?
  Mr. NADLER. Mr. Chairman, if the gentleman will yield, I am informed 
by distinguished counsel that they were typos and errors in drafting, 
that he made no substantive changes.
  Mr. GEKAS. No way that that was sloppy handwork of any type, is that 
correct?
  Mr. NADLER. I do not think I would call the work of the staff sloppy. 
I would think in view of the haste it was hasty because of the 
committee schedule.
  Mr. GEKAS. Mr. Chairman, further reserving the right to object, we 
will engage in a spelling bee on ``sloppy'' some other time.
  Mr. Chairman, I withdraw my reservation of objection.

[[Page H2762]]

  The CHAIRMAN. Without objection, the modification is agreed to.
  There was no objection.
  The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from 
New York (Mr. Nadler) and a Member opposed each will control 30 
minutes.
  The Chair recognizes the gentleman from New York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, I yield myself such time as I may consume.
  (Mr. Nadler asked and was given permission to revise and extend his 
remarks.)
  Mr. NADLER. Mr. Chairman, I am reluctantly offering this substitute 
in the hope that it will open the door to rational discussion and an 
eventual compromise that will ensure both that people will be unable to 
game the system and that all parties, debtors and creditors alike, will 
be treated fairly in our bankruptcy courts. It is an attempt to foster 
dialogue and compromise and I hope it will not be misconstrued as my 
idea of an ideal bankruptcy bill.
  I certainly do not agree with everything in the substitute, and I 
hope no one will pull sections out of it and say that I think this is a 
good idea. But I certainly do agree with the main changes we make from 
the Gekas bill.
  In its current form, this bill provides ample loopholes for the 
wealthy, well-advised debtor to escape his or her obligations in 
bankruptcy but sets numerous traps for the middle and low-income debtor 
who will face unnecessary litigation and costs, unrealistic legal 
requirements and legal presumptions which bear no relation to reality. 
The bill will destroy businesses, it will destroy families and it will 
destroy lives. America is better than that.
  We can get at that small percentage of people. The ABI, the American 
Bankruptcy Institute, estimated 3 percent of debtors can afford to 
repay 20 percent or more of their debt. The creditors said oh, no, they 
are wrong, it is double that, 6 percent. We can get at that small 
percentage, 3 or 6 percent of people who are abusing the system, 
without making costs skyrocket and without violating the rights of 
small debtors and creditors.
  The substitute I am offering makes several major changes in the bill 
before us. It makes two changes in the so-called means test. First, it 
would look at a debtor's real income rather than his past income. The 
bill would average the previous 6 months of income and create a legal 
presumption that this is what the debtor will receive every month for 
the next 5 years, but we know this is wrong.
  For example, people are making $50,000 at middle management at IBM 
and they are laid off, now they are making a much less amount of money. 
That is why they are going bankrupt. One cannot presume that they are 
making $50,000. This amendment would look at their real income and it 
looks forward, it does not look back.
  Second, the means test does not look at your actual expenses, it 
looks at what some IRS bureaucrat thinks that the average expense in 
your part of the country ought to be. The substitute makes the same 
change here as the Hyde-Conyers amendment we voted on a few minutes ago 
would have done.
  In the last Congress, the majority declared the IRS to be the great 
Satan and held hearings designed to show that these guys could not be 
trusted. We even passed legislation to reform the IRS which 
specifically directed the IRS to drop these guidelines and to fashion 
new ones with greater leniency because we thought these guidelines were 
inaccurate and too harsh.
  Yet this bill would require that those same guidelines that we judged 
last year to be inflexible, inaccurate and too harsh should now be 
applied without any flexibility at all. We have been told that you 
could just put the debtor through a home computer and find out how much 
bankruptcy relief they are entitled to. The gentleman from Illinois 
(Mr. Hyde) is right, the IRS should not be entrusted with this task.
  If the real circumstances do not match your income from the last 6 
months and what the IRS says your landlord should be charging you, 
never mind what he actually does charge you, the bill allows you to go 
to court and plead extraordinary circumstances. In other words, to get 
the court to look at your real situation, you have to hire a lawyer and 
litigate a motion.
  It is right in the bill, and it is the first roadblock in the path of 
someone with no money who really needs bankruptcy relief. How many 
people who really have no money are going to be able to afford to 
litigate the question of whether their daughter's braces are 
extraordinary circumstances? Why should they have to?
  Any reasonable means test would say, what are your real means, what 
is your real income, what are your real expenses? Not what does the IRS 
think the average rent or the average mortgage payment in the Northeast 
ought to be, what is your mortgage payment? You cannot take the IRS 
estimate to the bank.
  The substitute has the court look at reality from the very beginning 
of the case, no Alice in Wonderland. The substitute allows the debtor 
to bring to the court's attention at the beginning of the case changes 
in his or her circumstances which would make the 6-month lookback for 
income unrealistic. No special motions, no litigation. Part of the 
filing.
  Unlike the bill, in addition to allowing people to pay for private 
school and counting that as part of his expenses, our bill would allow 
expenses for public school, if any, and for home schooling. Private 
school should not get a special preference over public schools and over 
home schooling.
  We have also heard a great deal about the effect nondischargeability 
will have on families and child support. Let us talk about what this 
bill adds, why it is a problem and what this substitute would do.
  The first addition to nondischargeability would make nondischargeable 
purchases in the aggregate of $250 or more in the 90 days before the 
bankruptcy filing, it would assume that that is for luxury goods or 
services. But it presumes that that $250 is for purchase of luxury 
goods. If you put your groceries, your gas and your dry cleaning on a 
credit card for 3 months for your family, do you think that would be 
more than $250?
  Now, the credit card company would get to drag you to court and you 
would have to prove that it is not a luxury good. The presumption would 
be that it is a luxury good and should be nondischargeable in 
bankruptcy. You bought a new dishwasher. Could the old one have been 
fixed? Can you not do it by hand? Go prove it, at the cost of 
litigation.

  But the main point is that this is a litigation trap for people who 
are really broke and cannot afford a lawyer to defend the discharge 
action.
  The same with the other section which makes nondischargeable debts on 
a credit card incurred to pay nondischargeable debts. We have seen 
today that banks are sending live checks and preapproved credit cards 
to people, even kids, and saying use it for whatever you want. Now the 
same banks want to say, ``Hey, wait a minute, you paid your tax bill 
with your credit card. We want our debt on the credit card that you 
used to pay your tax to survive bankruptcy because you should not have 
paid it with your credit card.''
  They do not have to prove any improper intent. They simply make the 
debt nondischargeable. The result, these credit card debts would 
survive a bankruptcy discharge and would compete with other more 
important nondischargeable debts after the case is over.
  Your ex-wife wants to collect child support. Too bad. Let her go and 
compete with a lawyer for Chemical Bank, which would now be made 
nondischargeable. That is why advocates for women, for families with 
kids, for crime victims, Mothers Against Drunk Driving have spoken out 
so consistently against this provision of the bill.
  The substitute also includes improvements to Chapter 11 which 
protects family farms. The substitute raises, to keep pace with 
inflation, the limit on who can file for Chapter 12, and it assures 
that proceeds from the sale of farm equipment are used to help 
reorganize the farm and not to go only to taxes. Like the bill, it also 
makes Chapter 12 permanent. It is the same language that is in the 
bipartisan bill introduced by the gentleman from Michigan (Mr. Smith) 
and the gentleman from Minnesota (Mr. Minge).
  We have played politics with family farms too long. There is a crisis 
in the farm belt. They need these improvements to the law and they need 
Chapter 12 to be permanent. We should do it whether the big banks that 
hold farm mortgages like it or not.

[[Page H2763]]

  There are a number of provisions in this bill for credit card 
disclosure, the same provisions that were in the amendment that the 
gentleman from Massachusetts (Mr. Delahunt) offered in committee, that 
the Committee on Rules refused to make permanent. I will just mention 
one.
  Under this bill, the credit card companies tell you the interest rate 
is X and your minimum payment is $10, but they do not tell you that if 
you pay the minimum, how long it will take you to repay. It will take 
you 200 years to repay your debt. And what percentage of income you 
will pay, 300 percent. They would have to tell you those kinds of 
disclosures so you would know that.
  The last piece I want to discuss concerns a matter that is very 
important to me, child support enforcement. As a member of the New York 
State Assembly, I wrote most of the State's child support enforcement 
laws.

                              {time}  1730

  There have been a great many fig leafs placed on this bill to make it 
appear as if the bill is not anti-family and would not very greatly 
damage child support enforcement, but the truth is it most certainly 
would.
  There are two ways in which this bill would hurt child support 
enforcement. In Chapter 7 we are making credit card debts or many of 
them, as I have already mentioned, nondischargeable. So mom, after the 
bankruptcy is finished now, now has to compete with the bill collector 
or the attorney from Chemical Bank to collect the nondischargeable 
debt, because there is more debt that is now nondischargeable. She has 
got to compete for it.
  But the sponsors of the bill say, no, no, no. We are giving child 
support a priority so she will not have to compete. But of course, as 
any bankruptcy attorney knows, priorities only exist in bankruptcy 
court. Once one has the discharge, they are no longer in bankruptcy 
court, the priorities are wiped out, the Federal jurisdiction is wiped 
out, the bankruptcy proceeding is over, and now she is still stuck 
trying to compete in the real world out there, perhaps in State court 
with Chemical Bank's attorney or whoever, to collect her child support 
as against their nondischarged credit card debt, and priorities do not 
exist and do not help us.
  Second, the bill defines debts owed to the government for past-due 
child support as domestic support. In a Chapter 13 repayment proceeding 
the bill says we cannot approve, the judge cannot approve, a Chapter 13 
repayment plan to pay the debts unless the plan includes payment of all 
the child support due. Period. But it defines the child support as 
debts owed to the government for past-due support as well as debts owed 
to the custodial parent, to mom, to care for the child.
  So if the means test that is inserted into Chapter 13 finds that 
there is enough disposable income to pay the child support to mom but 
there is not enough disposable income to pay the child support to mom 
and pay the government the debts that are owed, we cannot confirm the 
Chapter 13 plan, there is no Chapter 13, they cannot go bankrupt. They 
are too rich for Chapter 7, they are too poor for Chapter 13, they 
cannot get any bankruptcy protection, and mom is left out there trying 
to collect her child support against every other debtor, every other 
creditor, with no protection at all.
  The last issue of debtor coercion I want to address involves 
something called reaffirmation agreements. There has been a great deal 
of publicity about people being coerced into signing away their rights 
to a discharge or agreeing to waive that right without fully 
understanding what they are signing. This amendment would require court 
review for reaffirmations of unsecured debts and of very small amounts. 
It would also require disclosure to the debtor so he knows, so he 
understands, what he is agreeing to. Placing some limits on 
reaffirmations, requiring some disclosure and some court oversight, not 
in every case but in those cases that are most likely to result in 
abuses, is important. To the extent that reaffirmation is like 
nondischargeable debts, limit a debtor's post-discharge resources, they 
interfere with child support.
  The bill would abolish the right to bring a class action. We all 
remember a few years ago when Sears Roebuck cheated over a million 
people through fraud into fraudulent reaffirmations. A class action 
suit was brought, and $168 million in damages was paid to over a 
million people. The average recovery was $150 per person. Sixty million 
dollars criminal penalty was assessed.
  This bill says: We want to crack down on the little guy, but the big 
guys, if they are crooks, we do not want them to be subject to class 
action lawsuits. They cannot maintain a class action lawsuit, and so 
Sears Roebuck would get away with it if they only had delayed until 
this bill has passed.
  This substitute would remove this provision. The only way one can sue 
the little guys, can sue the big guys, is through a class action suit.
  I hope that Members will support the substitute instead of H.R. 833. 
The substitute is supported by the administration. It is a giant step 
toward a fair and balanced bill and a giant step away from the gridlock 
we experienced in the last Congress. If my colleagues want real and 
fair bankruptcy reform, support the substitute. If they do not want a 
bill that will be vetoed and leaving us with nothing at the end of the 
session, support the substitute.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GEKAS. Mr. Chairman, I yield myself such time as I might consume.
  I ask the Members to vote no on the Nadler substitute. What it does 
in its provisions one by one is erase the progress that we have made 
already indicated by the votes taken in this Chamber. For instance, one 
of the main objects, targets, of the Nadler substitute would be to 
eliminate the means test, the needs test which is so vital to a real 
reform in bankruptcy.
  We have already voted on the Hyde-Conyers amendment. We indicated the 
will of the House of Representatives on that very same feature. Now the 
gentleman from New York (Mr. Nadler) asks us to repeat the 
consideration of that item. The vote naturally will be no. I ask for 
that repeat vote.
  Mr. Nadler makes a big deal out of some of the provisions in his 
proposal that fly right in the face of what we have already 
accomplished and what we are trying to accomplish. For instance, we 
consulted for weeks and months with residential landlords who were 
vexed and are still vexed by the havoc, the absolute havoc that can be 
wreaked upon an investment by the automatic stay that would benefit 
debtors, and that is tenants who want to stay on, and on, and on 
without paying rent. The bill that we have gives relief to the 
residential landlords. That is a big step forward, and we really 
studied that provision and consulted with a lot of people and heard 
testimony to that effect. Mr. Nadler would wipe it out with this 
amendment. I think that is retrogressive, completely retrogressive, 
anti-reform.
  Beyond that, the gentleman from New York makes a big cry out of the 
reaffirmation language that we have in the bill. He fails to note, and 
this is important for us to recall, that the credit unions who have 
supported our bill from the beginning to the end and who have lent 
their voices, loaned their voices to us on many different occasions on 
this bill, they like our language on reaffirmations.
  If my colleagues like credit unions and the work they do and the 
loans they provide and the capitalization that they indulge, they will 
not support the Nadler substitute. They will be destroying the credit 
unions' reliance on our language on reaffirmations just for one item.
  Mr. Chairman, there are 10 other flaws in this bill. I do not want to 
take up extra time. I will enumerate them for anyone who wants to 
corner me in the cloakroom for that purpose, but from time to time I 
will remind some of our Members of some of those flaws.
  Mr. Chairman, I insert the following for the Record:

         National Governors Association, General Debate Nadler

                                      Washington, DC, May 5, 1999.
     Hon. J. Dennis Hastert,
     Speaker of the House,
     House of Representatives, Washington, DC.
     Hon. Richard A. Gephardt,
     House Minority Leader,
     House of Representatives, Washington, DC.
       Dear Speaker Hastert and Minority Leader Gephardt: Our 
     economy has been setting the right kind of records in the 
     1990s in terms of real economic growth, low inflation, 
     declining welfare rolls, and falling unemployment rates. 
     During the same period,

[[Page H2764]]

     however, personal bankruptcy filings have repeatedly set the 
     wrong kind of records, reaching new highs each of the last 
     three years. Governors accordingly support revising federal 
     bankruptcy laws to curb the increasing number of bankruptcy 
     filings in our nation and to stem abuses to the bankruptcy 
     system.
       Specifically, Governors support efforts to prevent debtors 
     from filing Chapter 7 bankruptcy in lieu of Chapter 13 when 
     they are financially capable of repaying part or all of their 
     unsecured debts. We also encourage Congress to place the 
     highest possible priority on payment of domestic support 
     obligations in bankruptcy proceedings. Preservation of 
     states' existing rights to determine their own standards 
     dealing with homestead exemptions is another important 
     provision that needs to be included in any bankruptcy 
     legislation that Congress passes this year.
       We applaud the Judiciary Committee's recent efforts to 
     address this issue. Passage of H.R. 833 by the House 
     represents an important step to ensuring enactment of 
     meaningful bankruptcy reform this year. We look forward to 
     working with Congress to achieve this goal.
           Sincerely,
     Governor Thomas R. Carper.
     Governor Michael O. Leavitt.
     Governor George E. Pataki,
       Chairman,
       Committee on Economic Development and Commerce.
     Governor Jeanne Shaheen,
       Vice Chair,
       Committee on Economic Development and Commerce.

  Mr. Chairman, I reserve the balance of my time.
  Mr. NADLER. Mr. Chairman, I yield 4 minutes to the distinguished 
gentleman from Michigan (Mr. Conyers), the ranking member of the 
Committee on the Judiciary.
  (Mr. CONYERS asked and was given permission to revise and extend his 
remarks.)
  Mr. CONYERS. Mr. Chairman, I first want to commend the gentleman from 
New York (Mr. Nadler) who has worked indefatigably on this bill. No one 
has put in more time than him, and as a result we have crafted a 
democratic substitute that I am proud to urge my colleagues' 
consideration of.
  This amendment retains the vast majority of the provisions in the 
underlying bill, but at the same time responds to the most egregious 
and one-sided provision in the legislation. In addition to fixing the 
problems with the use of IRS expense standards, which is an anathema, 
and the bill's impact on jobs also would be corrected, the substitute 
also eliminates many of the problems the bill creates for single 
mothers and their children as well as the problem of credit card abuse.
  So here we are. Here is an amendment that deals with the IRS expense 
standards, the small business loss of jobs, the problems created for 
single mothers and their children and the problem of credit card abuse. 
These four items are so critical to any kind of reasonable bill.
  As the bill presently stands, it is a disaster for single mothers and 
their children. There has been a lot of conversation that it is not, 
but that is the bare truth revealed now at the end of a day's debate.
  In addition to the overall impact of the bill on women struggling to 
raise families and make ends meet, the legislation will have a 
particularly harsh impact on the payment of alimony and child support. 
The problem arises from the fact that bankruptcy and insolvency are, by 
definition, a zero sum gain. By design, this bill will increase the 
amount of funds being paid to unsecured creditors, and it therefore 
comes as no surprise that such payments will often come at the expense 
of other less aggressive creditors, those without lawyers such as women 
and children owed child support or alimony. This problem is by no means 
insignificant given that an estimated 243,000 maybe to 325,000 
bankruptcy cases per year involve child support and alimony orders.
  And so, Mr. Chairman, for these Members who want to support real and 
balanced bankruptcy reform without unnecessarily piling on the middle 
class, the mothers and their children and without giving the credit 
industry a complete pass, I urge a yes vote for the democratic 
substitute now being debated.
  Mr. GEKAS. Mr. Chairman, I yield 4 minutes to the gentleman from 
California (Mr. Royce).
  Mr. ROYCE. Mr. Chairman, enacting a substitute bill on which there 
has been no hearings or public comment is no way to approach a task as 
important as reforming the Nation's bankruptcy system. Our bankruptcy 
laws play an important and necessary role in protecting Americans who 
really need these laws, and that is the key, need. But what our act 
intends to do is to make the existing bankruptcy system a needs-based 
system, addressing the flaw in the current system that encourages 
people to file for bankruptcy and walk away from debts regardless of 
whether they are able to repay any portion of what they owe, and it 
does this while protecting those who truly need protection.
  Between September of 1997 and September of 1998 in my home State of 
California there were 203,000 personal bankruptcy petitions filed. This 
translates into one bankruptcy petition filed for every 56 households. 
Now that is almost three times the next highest State, New York. 
Moreover, the number of bankruptcies in California has more than 
doubled since 1990.
  The cost to all of us is very great for the rest of the country. This 
is the cost borne not only by the business community but by the 
consumers who pay their bills responsibly and end up having these costs 
shifted to them.
  Last year, the 55 of 56 households in my State who paid their bills 
on time were forced to pick up the $550 per household tab for those who 
walked away from their debts. That is a $550 bill that my colleagues 
and I pay when irresponsible spenders who can afford to pay all or some 
of their debt declare bankruptcy, and this is the problem that the 
Bankruptcy Reform Act addresses.
  Therefore, Mr. Chairman, I rise today in strong support of the 
Bankruptcy Reform Act of 1999, of which I am a cosponsor, and in 
opposition to this substitute. The Bankruptcy Reform Act is almost 
identical to legislation passed by the House of Representatives last 
year by an overwhelming bipartisan vote. Unfortunately, that 
legislation ultimately stalled late in the year in the Senate. We have 
another opportunity today to pass this much-needed reform act and send 
the Senate a bill with strong bipartisan support, and I urge my 
colleagues to vote for this bill and defeat this substitute amendment.

                              {time}  1745

  Mr. NADLER. Mr. Chairman, I yield 3 minutes to the gentleman from 
Massachusetts (Mr. Meehan).
  Mr. MEEHAN. Mr. Chairman, I rise today in support of the Conyers-
Nadler-Meehan-Berman substitute bankruptcy amendment. There have been 
debates on bankruptcy reform both last session and this year. I have 
been alarmed by the rise in the number of consumer bankruptcies in this 
country and have been convinced that changes need to be made in the 
bankruptcy system.
  We can all agree that debtors should be obliged to pay more of their 
debts to their creditors. I fully support the concept of means testing 
to determine which debtors can pay at least some of their debts. In 
fact, last year I offered a means test amendment to the bankruptcy bill 
that would have done just that.
  Today I am a cosponsor of this substitute bill, which includes a key 
provision, an improved means test, over the one used in the underlying 
bill.
  The means test used in H.R. 833 uses an elaborate standard in tests 
to determine which debtors would be shifted to Chapter 13 and which 
would remain in Chapter 7. In all of those convoluted and exacting 
calculations, the test leaves out one fundamental element: Fairness.
  The bankruptcy system was designed to provide a fresh start for those 
who have fallen on hard times, frequently through little fault of their 
own.
  Let us look at who is declaring bankruptcy. In 1997, 280,000 older 
Americans filed for bankruptcy, two-thirds due to an unsuspected 
illness or job loss. 300,000 bankruptcy cases involved child support or 
alimony orders, as women could not collect what they were owed or tried 
to stabilize their post-divorce economic condition.
  We can all agree that these debtors are entitled to a fresh start and 
should not be forced to repay their debts for

[[Page H2765]]

the rest of their lives and beyond by leaving debts for their heirs.
  This substitute provides fairness by including a realistic means test 
which takes into account the real world circumstances of the debtor. 
Yet the amendment ensures that debtors who can repay their debts will 
repay their debts.
  Unlike the underlying bill, this amendment also understands that 
blame should not be solely shouldered by the debtors. This amendment 
considers the fact that the increasing availability of consumer credit 
corresponds with the increased number of bankruptcy filings.
  Moving more debtors into repayment plans, even if done correctly, is 
not the sole solution to the increased number of bankruptcies. Credit 
card applications with large limits are routinely sent to the poor, to 
college students, to family pets, and even dead people, and this 
significantly contributes to the number of bankruptcies.
  In 1997, over 250,000 Americans filed for bankruptcy before their 
25th birthday; 250,000. How can people so young have a line of credit 
so large that they cannot repay it? Because credit card companies are 
sending them all kinds of promises for spring break if they put it on a 
credit card.
  Mr. Chairman, let us have fair bankruptcy reform.
  Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from 
Tennessee (Mr. Bryant), a member of the committee.
  (Mr. BRYANT asked and was given permission to revise and extend his 
remarks.)
  Mr. BRYANT. Mr. Chairman, before I get into my remarks, I want to 
express my personal appreciation for the way the gentleman from 
Pennsylvania (Mr. Gekas) has chaired the committee and has managed this 
bill throughout the years that I have been involved, especially over 
the last couple of weeks when we have been in markup with intense 
debate and good healthy debate on both sides; as well as thanking the 
ranking member, the gentleman from New York (Mr. Nadler) for the 
outstanding job that he has done certainly representing the view that 
he has and I think is exemplified by this amendment, which I must 
oppose.
  This amendment effectively undermines many of the most important 
provisions of this Bankruptcy Reform Act that have been part of the 
House approach to bankruptcy reform since the last Congress.
  This amendment should be opposed for many reasons. The Nadler 
amendment would do little, if anything, to address the abuse of the 
bankruptcy system that has become increasingly prevalent. For instance, 
this amendment would strike from the bill key provisions that aim to 
prevent debtors from loading up on debt just before declaring 
bankruptcy, thereby obtaining a discharge of this debt. Such loading up 
has occurred more frequently as bankruptcy planning becomes more common 
in this day and age.
  In addition, this amendment would eliminate from the bill's needs-
based test the use of clear, objective standards. By doing so, the 
Nadler amendment would reverse the bill's efforts to bring significant 
administrative efficiencies to the already overburdened U.S. bankruptcy 
system.
  Moreover, by eliminating the clear objective standards for debtors to 
follow in applying the bill's needs-based formula, this amendment would 
harm debtors by subjecting them to endless litigation, and I might add 
expensive litigation, of which expenses may be taken into account in 
that formula.
  Furthermore, H.R. 833 already contains provisions that address the 
vast majority of concerns that this amendment claims to address. For 
instance, H.R. 833 already addresses issues related to reaffirmation 
agreements and would impose significant new disclosure requirements on 
credit cards and other lenders.
  Finally, there has been no prior congressional consideration of most, 
if not all, of the provisions of this amendment.
  I would urge my colleagues to oppose this, since enacting a 
substitute bill on which there have been no hearings or public comment 
is no way to approach a task as important as reforming this Nation's 
bankruptcy code.
  Mr. NADLER. Mr. Chairman, I yield myself 1 minute.
  Mr. Chairman, the gentleman from Pennsylvania (Mr. Gekas) talked 
about a provision in the bill, in his bill, which would allow landlords 
to evict debtors without obtaining permission of the bankruptcy court, 
and that that substitute would eliminate that provision, which it would 
do.
  Every other creditor has to get permission of the bankruptcy court to 
have an exemption from the automatic stay. Advocates of battered women 
and those involved in rehabilitating debtors have expressed concerns 
that these unsupervised evictions would pose a threat to the debtor's 
safety and to the safety of his family, and would pose a threat to 
debtors' ability to remain productive wage earning citizens.
  There is a fundamental question. Why should a property owner be in a 
different position to be exempt from an automatic stay, a different 
position than any other creditor? We do not see an answer to that 
question. Every creditor has the same provisions. There is no reason 
why one creditor should be in a preferred position, and that is why the 
provision is in the substitute.
  Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from 
Arkansas (Mr. Hutchinson).
  Mr. HUTCHINSON. Mr. Chairman, I thank the gentleman from Pennsylvania 
(Mr. Gekas) for yielding and I want to congratulate him on the 
outstanding work that he has done on this particular bill and in the 
leadership he has provided in the committee.
  I think we have had a very good process through the Committee on the 
Judiciary. This is not an example of where every amendment that was 
offered by the Democrats was defeated on a party line vote or vice 
versa. There was really an open debate and there were many amendments 
that my Democrat colleagues offered that were adopted, and I think that 
it is a good product that came through that bill. It is the kind of 
process I think we need to have more of in the Committee on the 
Judiciary.
  As I look at this entire issue of bankruptcy reform, I believe that 
bankruptcy is important in America and that we should not do anything 
to destroy that system which was really a hallmark of our country, 
where people came to this country getting away from debtor's prison, 
moving to the United States of America for a fresh start. That is an 
important part of our country, to give debtors a fresh start when there 
is not any alternative.
  I for one would not want to do anything to erode that important part 
of our country's history and our country's legal system. So I believe 
the fresh start is important. This bill, H.R. 833, preserves that 
important right.
  I think we all have to concede that there has been some abuse in the 
system. Certainly the gentleman from New York (Mr. Nadler) agrees with 
that because he has offered a bill before this committee.
  Look at the facts that historically bankruptcies have been filed 
because of a loss of job or extraordinary circumstances. We almost have 
full employment in America and yet bankruptcies still are going up at 
almost 20 percent. So this bill preserves the recourse of bankruptcy 
for those who truly need it.
  Ernst & Young did a study that I thought was very significant, and in 
that study it looked at the 10 percent of the people who filed 
bankruptcy that would be impacted by a needs-based system, and the 
study indicated that those 10 percent of filers would have an average 
income of almost $52,000. So clearly we are looking at people who have 
an ability to pay a portion of their debt over a period of time based 
upon that income.
  That study assured me that this approach is reasonable, that it is 
going after those who abuse the system and not those who are 
legitimately claiming to look to the system for their legitimate 
relief.
  Also, the means test that is provided here gives something that is 
very important to the bankruptcy judge, and that is discretion. Again, 
I looked at the bill and on page 10 it says that the judge, under 
extraordinary circumstances, can revise the means test to make sure 
that the debtor would not be forced into repaying a portion of the debt 
when they have some special circumstance that would justify a complete 
discharge from bankruptcy.

[[Page H2766]]

  Then finally, I think this bill is important because the claim is 
that perhaps we should have individual responsibility, but those have 
open-ended credit responsibilities; credit card companies should have 
more disclosure. It does require this, and so it balances individual 
responsibility with the recognition that there are legitimate 
circumstances that require bankruptcy.
  Mr. NADLER. Mr. Chairman, I yield 2\1/2\ minutes to the distinguished 
gentlewoman from California (Ms. Lee).
  Ms. LEE. Mr. Chairman, I want to first thank the gentleman from New 
York (Mr. Nadler) for this time and also for his very diligent and hard 
work on this issue, to really clarify these very important issues which 
are very complicated and very important to consumers in this country.
  Mr. Chairman, I rise to support the Democratic substitute and in 
opposition to H.R. 833. I too am troubled by the increase in bankruptcy 
filings since 1980. I am very concerned about the rise in individual 
consumer debt, but I am disappointed that we are failing to bring 
legislation that is balanced between creditors and debtors.
  As drafted, many of the provisions of H.R. 833 are unfair to middle- 
and low-income debtors. At the same time, the bill fails to close 
loopholes that currently protect the wealthiest debtors.
  H.R. 833 focuses on the perceived abuse of the bankruptcy system by 
debtors without adequately addressing the abuses by creditors, and 
takes a rigid approach to a citizen's ability to discharge debt.
  A majority of people surveyed by Consumer Federation of America 
believe credit card companies share the blame with debtors for the 
rising tide of personal bankruptcies, yet nowhere in H.R. 833 is there 
mention of preventing or curbing credit card companies from targeting 
people with low incomes.
  Credit card companies are actively targeting vulnerable potential new 
members. We have seen an increase in the number of bank card mailings 
sent out to potential new members. From 1992 to 1998, the numbers 
mailed increased by 255 percent. It comes as no surprise that the 
amount of per person debt also increased 225 percent in 6 years.
  When credit card companies consolidate, cardholders are left without 
any protection from rate increases. Credit cards are not like mortgages 
or car loans that may be resold but their rates do not change. Not 
credit cards. In fact, new owners of credit card businesses are free to 
impose whatever interest rates the traffic will bear and are subject to 
few remaining State fee ceilings.

                              {time}  1800

  With increased consolidation of credit card companies, payment 
periods have really been shortened, grace periods for late payments 
have been eliminated, and stiff penalties of up to $29 are now incurred 
by cardholders on a regular basis.
  I strongly support the Democratic alternative offered by the 
gentleman from New York (Mr. Nadler), the gentleman from Michigan (Mr. 
Conyers), and the gentleman from Massachusetts (Mr. Meehan), which is a 
moderate and balanced approach to behavior.
  It offers a realistic means test, allows child support to precede 
other debts, requires credit card companies to provide information so 
borrowers may avoid bankruptcy, and eliminates new rules for making 
credit card debts nondischargeable. It leaves intact pre-bankruptcy 
debt run-ups and fraudulently-incurred debt nondischargeable, and 
includes bipartisan farm bankruptcy legislation.
  Mr. GEKAS. Mr. Chairman, I am pleased to yield 6 minutes to the 
gentleman from Virginia (Mr. Goodlatte), who has been extraordinarily 
helpful in every stage of the bankruptcy reform effort.
  Mr. GOODLATTE. Mr. Chairman, I thank the gentleman from Pennsylvania 
for his kind words, and for his leadership in this excellent piece of 
legislation that I rise today to strongly support, H.R. 833, the 
Bankruptcy Reform Act, and to oppose the Nadler substitute, which would 
take us back to the current situation where we reward people who act 
irresponsibly and penalize hardworking consumers who make every effort 
to pay their bills on time; pay their own bills, and pay a portion of 
someone else's bills when that person files bankruptcy and does not 
take responsibility for their actions.
  With a record high 1.4 million bankruptcy filings last year, every 
American must pay more for credit, goods, and services when others go 
bankrupt. I worked to pass H.R. 3150 last year, which passed the House 
by a vote of 300 to 125 in the final conference report, which this 
legislation is very similar to, and am pleased to cosponsor this 
legislation this year because it is high time that we relieve consumers 
from the burden of paying for the debts of others.
  The Bankruptcy Reform Act of 1999 restores personal responsibility, 
fairness, and accountability to our bankruptcy laws, and will be of 
great benefit to consumers.
  For too long our bankruptcy laws have allowed individuals to walk 
away from their debts, even though many are able to repay them. That is 
not fair to millions of hardworking families who pay their bills, 
mortgages, car loans, student loans, and credit card bills every month.
  The loopholes in our bankruptcy laws have led to a 400 percent 
increase in personal bankruptcy filings since 1980, at a cost of $40 
billion per year. These costs have been passed directly to consumers, 
costing the average household that pays its bills an average of $400 
each year.
  Under the current system, some irresponsible people filing for 
bankruptcy run up their credit card debt immediately prior to filing, 
knowing that their debts will soon be wiped away. These debts, however, 
do not just disappear, they are passed along to hardworking folks who 
play by the rules and pay their own bills on time.
  The Bankruptcy Reform Act ends this practice by requiring bankruptcy 
filers to pay back nondischargeable debts made in the period 
immediately preceding their filing. In addition, new debts for luxury 
goods incurred during this period would be presumed nondischargeable.
  While ending the abuses of our bankruptcy laws, the Bankruptcy Reform 
Act is strongly pro-consumer in other ways, as well. This legislation, 
for example, helps children by strengthening protections in the law 
that prioritize child support and alimony payments.
  Additionally, the bill protects consumers from bankruptcy mills that 
encourage folks to file for bankruptcy without fully informing them of 
their rights and the potential harms that bankruptcy can cause.
  Mr. Chairman, the gentleman from Pennsylvania (Mr. Gekas) outlined 
some of the problems that we have with the Nadler substitute. I would 
like to point out some others. The so-called refinements of the 
gentleman from New York (Mr. Nadler) are simply inexplicable, or even 
worse, inane.
  For instance, we allow the debtor's income to be adjusted upward in a 
fixed amount on an annual basis if the number of individuals in the 
debtor's household exceeds four. The substitute of the gentleman from 
New York (Mr. Nadler) takes that annual figure and converts it into a 
monthly figure.
  As a result, he would allow an adjustment in that in an amount that 
is 12 times greater than the amount contemplated in our bill. Thus, for 
a family of let us say eight members, their income could be as high as 
$79,000 per year and still not be subject to their so-called needs-
based test.
  The substitute is also substantively flawed. We spent many months 
examining the current consumer bankruptcy law and crafting ways to 
reintroduce balance into the bankruptcy system.
  One important principle that we wanted to achieve was to allow 
greater creditor participation in the system. The substitute in many 
respects undercuts that principle. One example is the provision on page 
12 of the substitute that would prohibit a creditor from filing a 
Section 707(b) motion until the United States Trustee has acted. This 
provision is simply unfair to creditors, and effectively resuscitates 
current law, which prevents creditors from filing these motions.
  Another substantive flaw in the substitute is its provision for 
determining a debtor's income. It excepts from the income side of the 
needs-based formula a series of items that, under current law, are 
considered as income. If we do not take into consideration all of the 
debtor's income, but we do take into

[[Page H2767]]

consideration all of the debtor's expenses, the result is a 
mathematical imbalance that frustrates the purpose of the formula.
  The substitute contains what is in effect a back door effort to amend 
the Truth-in-Lending Act. Section 112 would disallow a claim for the 
creditor's failure to comply with any of a very long series of 
requirements spelled out in that section. Without even reading this 
section, one can simply tell from its near seven pages that the 
substitute essentially wants to establish an entire new set of 
requirements for lenders that do not even exist under the Truth-in-
Lending Act.
  This tactic is simply wrong. The Truth-in-Lending Act already imposes 
various penalties for violations of its provisions. The effect of this 
substitute would be to establish two sets of standards that lenders 
would have to comply with, one for purposes of the Truth-in-Lending Act 
and the other for purposes of establishing a claim in bankruptcy.
  Mr. Chairman, bankruptcy should remain available to folks who truly 
need it, but those who can afford to repay their debts should not be 
able to stick other folks with the tab. Enactment of this carefully-
crafted legislation by the gentleman from Pennsylvania (Mr. Gekas) and 
opposition to the legislation by the gentleman from New York (Mr. 
Nadler) would send a big signal towards those who would abuse our 
bankruptcy system that the free ride is over.
  I want to commend my colleague, the gentleman from Pennsylvania (Mr. 
Gekas) for his outstanding work on this issue, and I urge my colleagues 
to support this fair and reasonable bill.
  Mr. NADLER. Mr. Chairman, I yield 3 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the gentleman from 
New York for yielding time to me, I thank him for his leadership.
  Mr. Chairman, it fascinates me to hear this debate go in the 
direction that it is going. That is that this country is falling under 
the weight of debt, that we are a country of abusers of debt or debtors 
who do not want to pay their debt.
  It is well known in hearings that we have had on the Committee on the 
Judiciary on this very topic that out of the credit card debt that this 
Nation has, only 4 percent of it is in default. People do pay their 
bills. Now, as those who score credit, they may pay their bills a 
little slower than the creditors may like, but they do pay their bills.
  In the present bill, the underlying legislation unfortunately does 
not seek a level of bipartisanship. It has aspects of mean-
spiritedness, and that is why I am supporting the Nadler-Conyers-Meehan 
substitute, because it fairly addresses the concerns we have. It 
provides a realistic means test which takes into account the debtor's 
actual income and expenses.
  Frankly, Mr. Chairman, the National Bankruptcy Review Commission 
never supported the means test. The means test, of course, is a 
barrier, a bar, a closed door to those who are seeking debt relief. It 
suggests that everyone runs to the courthouse to try and file a Chapter 
7 as opposed to a Chapter 13.
  Knowing many people who tragically have had to file bankruptcy in 
light of the economic situation my State of Texas faced with the 
falling oil prices in the 1980s, I know that those people were not in 
any way championing running away from debt. They were, if you will, 
enormously saddened by losing their homes and other assets that they 
had, but they went to the bankruptcy court in order to get a fresh 
start, or in many instances, to try to find out how to repay their 
debt.
  Mr. Chairman, this is a wrongheaded, misdirected piece of 
legislation, and the Nadler amendment helps to fix the dilemma between 
child support that should be paid to help the custodial parent versus 
having to have the custodial parent fight the government in order to 
get their monies, with some sort of misguided effort to pay back the 
government if that person was on welfare.
  When we first started out with this legislation, we indicated how 
important it was for that woman who had that child to make sure she 
does not have to fight against big government or big corporations to 
get child support.
  It also provides a balance by requiring credit card lenders to behave 
responsibly. It was a terrible shame that we did not allow an amendment 
in the rules process that would put the burden of responsibility on the 
solicitation or the oversolicitation on the credit card companies.
  The Nadler-Conyers-Meehan substitute, Mr. Chairman, is a fair and 
direct response to the minimal concern that we have that some credit or 
debt use or lack of payment may be abused. I would offer that we 
support this, and that we vote no on the underlying bill.
  As we reject this rule, I would like to voice my support for an 
amendment that was jointly offered by myself with Congressman Nadler to 
the Rules Committee.
  We all know that this bill, as it currently reads, has garnered a 
great deal of negative commentary from women's and children's 
organizations, and appropriately so. That is because the provisions in 
this bill which change the rules on dischargeability, skew the delicate 
balance between creditors and debtors, and remain silent on consumer 
protection issues hurt families--especially those headed by a single 
parent.
  Our amendment would make this bill more amenable to families. It is 
an omnibus child support amendment because it carries a full set of 
technical corrections and substantive revisions.
  Our amendment would fix Section 1112, which under the current version 
of the bill, could be interpreted to require that all debts to a 
custodial parent and the government be paid before a trustee can 
approve a repayment plan. This amendment remedies that provision by 
allowing a repayment plan to be drafted that only provides funding for 
the custodial parent. The result is that funds can flow to children 
without being held up by government debt.
  Our amendment also makes changes to Section 1113, eliminating its 
provision that allows residential landlords to escape the automatic 
stay provisions contained in this section. This was done at the request 
of women's advocacy groups, who feared that landlords would have too 
much discretion in times of alleged domestic violence and divorce. We 
must make sure in these delicate times that our courts do not 
completely abdicate their responsibility to ensure the safety and well-
being of the people seeking their assistance.
  This Omnibus Child Support amendment also contains other exceptions 
to the automatic stay mechanism that are aimed to make the bankruptcy 
process smarter in domestic support cases. It allows a continuation of 
an action, notwithstanding the automatic stay, in order to determine 
some facts vitally important in these cases, such as paternity. It also 
allows certain issues to be resolved that immediately pay dividends to 
women and children. These issues include: the establishment of 
modification of a domestic support order; wage garnishment; the 
interception of tax refunds; and the enforcement of medical obligations 
under the federal child support program. All of these issues are 
vitally important, and our system should allow them to move forward in 
these cases so as to prevent them from becoming part of the bankruptcy 
quagmire.
  Finally, our amendment contains an important provision originally 
penned by Congressman Shaw last session. It provides that funds 
received by a creditor, which have been converted from dischargeable to 
non-dischargeable debt under the new provisions in this bill, be held 
in trust for five years. Furthermore, during that time, the creditor 
must make every effort to pay those funds to individuals who have a 
claim of domestic support against the debtor. Simply said, this 
provision makes sure that scarce funds that are being parsed by this 
bill will always be available to the women and children that deserve 
them rather than to the credit card companies. It is a common sense 
solution to a problem that needs to be addressed if we are to have an 
acceptable bankruptcy reform bill.
  Mr. NADLER. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, we have heard in the last few minutes echoes of the 
propaganda of the credit card industry. But the facts are, we have 
heard that lots of people can pay their bills and are not. The American 
Bankruptcy Institute, in the first nonbipartisan study that was not 
bought and paid for by the credit card industry, said and concluded 
earlier this year that 3 percent of bankruptcy filers could afford to 
pay 20 percent or more of their bills.
  The creditors say that is not true, it is twice as much. All right, 
granted, maybe 6 percent, between 3 and 6 percent can afford to pay 20 
percent or more of their bills. So let us not continue to hear this 
slander against American citizens as deadbeats.

[[Page H2768]]

  We also heard that because all these people are not paying their 
bills to the credit card companies, the average American pays $400 or 
$500 more in credit card fees. The fact is, credit card fees 10 years 
ago were 16, 17, 18 percent. Interest rates have come down, mortgage 
rates have come down, the prime rate has come down, car loan fees have 
come down, but credit card rates are still 16, 17, 18, 19 percent, and 
they will stay there, no matter what we do with this bill.
  This bill will not result in any pass-through to consumers. It will 
simply mean more profits for the credit card companies. If Members 
think differently, I have a few bridges in my home district I would 
like to sell to Members.
  Secondly, we have heard about the means test. This substitute imposes 
a fairer means test, a means test that looks at real income; not what 
you used to make before you were fired and laid off, which is why you 
went bankrupt, but what you are making now and likely to make; and real 
expenses, not what the IRS thinks the rent ought to be, but what the 
rent actually is. That is the only fair means test.
  Do not forget, the means test is used in Chapter 13 for everybody, 
not just in Chapter 7 with a safe harbor. The bill provides no class 
actions against the greatest malefactors. Let Sears Roebuck get away 
with stealing $168 million from people in bankruptcy. The substitute 
says no, if you are cracking down on the little guys, crack down on 
tort feasors and crooks who are big guys. Do not stop the class action.
  The bill says we are going to, or it does not say so, but the effect 
is to murder child support enforcement. We know some people, that the 
supporters of this bill say they have fixed it, but they have not fixed 
it. The so-called priority does not survive the bankruptcy and the 
discharge, post-discharge. Mom still has to compete with Chemical 
Bank's attorney, because the priority does not survive the bankruptcy 
proceeding.
  And in Chapter 13, if you cannot pay the government, if the means 
test says you do not have enough money to pay the government, then you 
cannot confirm the plan and you cannot pay the child support.
  That is why the only people concerned with child support in any way 
who are supporting this bill are the people in charge of collecting 
money for the government, the Fort Dietrick people, the Attorneys 
General, not the people concerned with the women.
  This bill murders small businesses. We have a way of saving that in 
this provision, and ditto for farmers. We heard the gentleman from 
Virginia (Mr. Goodlatte) say it is a balanced bill. It is not a 
balanced bill. The substitute makes it more balanced. The 
administration says they will veto it because it is not a balanced 
bill.
  The gentleman from Illinois (Mr. Hyde), who is not exactly a noted 
liberal, says this bill is imbalanced. He says, ``I asked staff to give 
me a list of what the creditors are getting out of this bill. I have 
pages and pages and pages of advantages that the creditor community is 
getting from this bill. I was going to read a list of what the 
creditors were getting under this bill. I will not do it, I assume you 
know, but there are 12 or 13 pages of single-spaced printed changes 
that benefit the creditors.''

                              {time}  1815

  Very imbalanced. That is why this bill is opposed. It is opposed by 
all the labor unions, by the Leadership Conference on Civil Rights, by 
the National Partnership for Women and Families, the National Women's 
Law Center, the consumer groups; and all the bankruptcy groups that 
know about bankruptcy, the Bankruptcy Conference, the Commercial Law 
League, and the National Association of Bankruptcy Trustees and 
Bankruptcy Attorneys.
  Mr. Chairman, I urge support for the substitute to make this a more 
balanced bill, and I yield back the balance of my time.
  Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, we have debated these issues very thoroughly, and the 
ultimate decision still rests with the Members of the House, of course. 
We have voted on several portions of this substitute amendment in 
different fashions starting from last year and ending with even the 
votes that were cast today. So we urge again that the Members vote 
``no'' on the substitute amendment.
  One thing that has rankled me in this whole debate from the beginning 
was the blitheness with which people who are opposed to the bankruptcy 
reform measure that we have produced criticize and bash and ridicule 
and attack the credit industry. Now, no one is an apologist or should 
be an apologist for the credit industry as such, but to make them the 
villain is really unfair and misleads the American public.
  What we have got to understand is that this economy of ours that is 
so wonderful, that is the wonder of the world, actually the envy of the 
world, is based substantially on the extension of credit. Every 
household in our Nation is a beneficiary of the credit system. Every 
piece of merchandise, every automobile, every item that uplifts the 
life of even the lowest of the lowest household in our country has 
credit extension to thank for its uplifting in the economic sphere of 
our country. So when we consider the credit industry, recognize that 
they make things hum. They are the ones that have spread the American 
goods and services across the world.
  So let us look at the good that our competitive free enterprise 
system has done through this global extension of credit of which we are 
the beneficiaries, and then look for abuses, perhaps by debtors and 
then by creditors, but do not, I beg of my colleagues, continue to 
vilify the creditors as being the cause of people going bankrupt. That 
is disingenuous, unfair and should be rejected out of hand.
  I ask the Members to vote ``no'' on the Nadler amendment.
  Mr. MEEKS of New York. Mr. Chairman, I rise today to support the 
Democratic Substitute--the Nadler amendment. Specifically, I would like 
to point out that this amendment eliminates a provision of H.R. 833 
which would have allowed landlords to evict debtors once they have 
filed for bankruptcy. This provision is key because of the assistance 
it gives to battered women as they seek financial support for 
themselves and for their children.
  Many times, battered women must file for bankruptcy in order to not 
get evicted from the homes they once shared with their spouses. They 
may have no financial means because they are not the sole providers of 
their family's income. When their spouse leaves the home, these women 
have no choice but to file for bankruptcy in order to delay eviction. 
We must not roll back provisions that have assisted women who are 
victims of domestic violence. We must help them reconstruct their life 
by first making certain they maintain a place to live.
  Since the Bankruptcy code was enacted, the automatic stay that 
becomes effective upon the filing of a bankruptcy petition has always 
prohibited a landlord from evicting a tenant unless the landlord 
obtains permission from the bankruptcy court.
  The stay serves several purposes: In chapter 13, a tenant has a right 
to assume a lease and to cure a default. In chapter 7, the debtor 
receives a short ``breathing spell''--which is very much needed in 
domestic violence cases.
  The right to avoid eviction is extremely important to tenants who 
would suffer the hardships of moving and having to find new housing and 
to tenants in rent controlled or rent-subsidized apartments, who would 
lose valuable property rights.
  I urge my colleagues to support the Nadler amendment because of 
provisions that will assist the helpless and the needy as in the case 
of battered women.
  Mr. DELAHUNT. Mr. Chairman, I rise in support of the Nadler-Conyers-
Meehan-Berman substitute.
  I am particularly pleased to see that the substitute incorporates a 
series of consumer credit disclosure provisions which Mr. LaFalce and I 
had attempted to offer as a free-standing amendment in an effort to 
bring some balance to this legislation.
  We all know there are some individuals who abuse the bankruptcy 
system. And we all agree that people who let their financial affairs 
get out of control should take responsibility for the consequences of 
their actions.
  But responsibility is a two-way street. And instead of encouraging 
responsible use of credit cards and reduction of credit card debt, the 
credit card lenders who have promoted this legislation have done all 
they can to induce consumers to take on ever-increasing amounts of 
debt. They have increased interest rates and fees on current accounts--
often providing inadequate or misleading disclosures. They have imposed 
penalties on responsible

[[Page H2769]]

debtors who pay off their card balances without incurring interest 
charges. They have engaged in relentless marketing efforts that target 
students with no credit histories and consumers already heavily in 
debt.
  We cannot deal with the rise in consumer bankruptcies if we ignore 
the causes. And there is a strong correlation between the bankruptcy 
rate and these kinds of irresponsible lending practices. If we are to 
fix the problem, we must demand greater responsibility not only from 
debtors but from creditors as well.
  The substitute would do this by disallowing claims in bankruptcy 
arising from various reckless lending practices. Those practices 
include the failure to provide complete and conspicuous disclosure of 
credit terms--including low temporary ``teaser'' rates; the imposition 
of unjustifiable penalties and fees against cardholders who pay their 
monthly balances on time or who do not engage in account transactions 
that result in finance charges; the issuance of credit cards to minors 
without the signature of a parent or guardian or proof of independent 
means of repayment; the failure to highlight due dates and penalties 
for late payments in monthly billing statements, and to inform 
cardholders of the consequences of paying only the minimum due each 
month; and the failure to permit consumers to respond to interest rate 
increases by canceling their credit cards and paying off their balances 
under the old rate.
  These are reasonable measures that would help sever the link between 
irresponsible credit card lending and the rise in bankruptcy filings. 
That is what needs to occur, Mr. Chairman, and I urge support for the 
substitute.
  Mr. GEKAS. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time has expired.
  The question is on the amendment in the nature of a substitute, as 
modified, offered by the gentleman from New York (Mr. Nadler).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. NADLER. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 149, 
noes 272, not voting 12, as follows:

                             [Roll No. 114]

                               AYES--149

     Abercrombie
     Ackerman
     Allen
     Baird
     Baldwin
     Barrett (WI)
     Berkley
     Bishop
     Blagojevich
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Danner
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Dixon
     Doggett
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Gejdenson
     Gonzalez
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Nadler
     Napolitano
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Schakowsky
     Scott
     Serrano
     Shows
     Spratt
     Stabenow
     Stark
     Stupak
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Wise
     Woolsey
     Wu

                               NOES--272

     Aderholt
     Andrews
     Archer
     Armey
     Bachus
     Baker
     Baldacci
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bentsen
     Bereuter
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Davis (FL)
     Davis (VA)
     Deal
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dooley
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kennedy
     King (NY)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Menendez
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Neal
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pastor
     Paul
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rivers
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanchez
     Sandlin
     Sanford
     Saxton
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shuster
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Stearns
     Stenholm
     Strickland
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Toomey
     Turner
     Upton
     Walden
     Walsh
     Wamp
     Watkins
     Weldon (FL)
     Weldon (PA)
     Weller
     Weygand
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)

                             NOT VOTING--12

     Becerra
     Berman
     Brown (CA)
     Cooksey
     Gephardt
     Luther
     Scarborough
     Simpson
     Slaughter
     Watts (OK)
     Wynn
     Young (FL)

                              {time}  1837

  Mr. TERRY and Mr. BALDACCI changed their vote from ``aye'' to ``no.''
  Mr. DINGELL changed his vote from ``no'' to ``aye.''
  So the amendment in the nature of a substitute, as modified, was 
rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. BERMAN. Mr. Speaker, I was unable to cast a vote on the Nadler 
substitute due to a family emergency. However, had I been present, I 
would have voted ``aye.''
  The CHAIRMAN (Mr. Nethercutt). The question is on the committee 
amendment in the nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Kolbe) having assumed the chair, Mr. Nethercutt, Chairman of the 
Committee of the Whole House on the State of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 833) to 
amend title 11 of the United States Code, and for other purposes, 
pursuant to House Resolution 158, he reported the bill back to the 
House with an amendment adopted by the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on any amendment to the committee 
amendment in the nature of a substitute, adopted by the Committee of 
the Whole? If not, the question is on the amendment.
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Mr. Conyers

  Mr. CONYERS. Mr. Speaker, I offer a motion to recommit the bill, H.R. 
833, with instructions.

[[Page H2770]]

  The SPEAKER pro tempore. Is the gentleman from Michigan opposed to 
the bill?
  Mr. CONYERS. Yes, I am, in its present form, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:
       Mr. Conyers moves to recommit the bill (H.R. 833) to the 
     Committee on the Judiciary, with instructions to report the 
     bill back to the House forthwith, with the following 
     amendment:
       Page 15, line 19, insert ``and benefits received under the 
     Social Security Act'' after ``humanity''.

  The SPEAKER pro tempore. The gentleman from Michigan (Mr. Conyers) is 
recognized for 5 minutes in favor of his motion to recommit.
  Mr. CONYERS. Mr. Speaker, my motion to recommit is simple. It 
excludes Social Security and Medicare benefits from the definition of 
``income'' for purposes of the bill's means test.
  As the law currently stands, any senior is eligible for bankruptcy 
relief. The bill, however, would force millions of seniors living on 
fixed incomes into mandatory repayment plans. This is because there is 
no exclusion from the definition of ``income'' for payments received 
for Social Security, retirement, for disability insurance, for 
supplemental security income, or for unemployment insurance.
  As a matter of fact, there is no exclusion for third-party medical 
payments made on behalf of seniors. What does it mean? That anytime a 
senior becomes ill and receives substantial Medicare benefits, they 
could be denied basic bankruptcy relief.

                              {time}  1845

  This amendment has strong support among senior citizens. It is 
supported by the National Committee to Preserve Social Security and 
Medicare and the National Council of Senior Citizens. I have letters I 
would like to introduce into the Record.
  This amendment by no means cures the worst problems in the bill, the 
use of IRS standards and its impact on child care and jobs, to name a 
few. But it does help fix a problem for seniors. I urge its adoption.
  Mr. Speaker, I include the following material for the Record:

         National Committee to Preserve Social Security and 
           Medicare,
                                      Washington, DC, May 3, 1999.
       On behalf of the millions of members and supporters of the 
     National Committee to Preserve Social Security and Medicare, 
     I strongly urge you to oppose H.R. 833, the bankruptcy reform 
     legislation, when it comes up for a vote this week. We, too, 
     are concerned about the increase in bankruptcy filings since 
     1980 and the rise in consumer debt per household. However, in 
     its current form H.R. 833 would seriously weaken bankruptcy 
     protections for vulnerable older and disabled Americans, 
     while doing nothing to prevent credit card companies from 
     targeting people with low incomes.
       Debtors would be subject to an income-based means test 
     intended to steer people away from Chapter 7, which allows 
     consumers to liquidate their assets and divide them among 
     their creditors in exchange for being discharged from the 
     majority of their debts. Instead, debtors who are projected 
     to have $5,000 in disposable income over the next five years 
     will have to file for Chapter 13 bankruptcy, which requires a 
     repayment plan.
       A debtor's disposable income would be determined by 
     subtracting allowable expenses such as housing costs and 
     taxes from an individual's overall income. As reported by the 
     Judiciary Committee, Social Security, disability and 
     veteran's benefits are not exempted from overall income. At 
     the same time an amendment to include medical expenses and 
     the costs of caring for an elderly parent in the list of 
     allowable expenses also failed, although private school 
     tuition was allowed.
       In 1997, an estimated 280,000 older Americans filed for 
     bankruptcy. Since 1993, more than a million people aged 50 
     and older have turned to the bankruptcy courts to receive 
     help in dealing with financial catastrophes. Our nation's 
     senior have worked hard and played by the rules. Most older 
     American's filing for bankruptcy are not profligate spenders. 
     Instead, the two major reasons why people over 50 are in 
     financial difficulty are lost jobs and medical problems.
       Many people in their late 50s and early 60s have serious 
     medical conditions and no health insurance. Even among those 
     eligible for Medicare, skyrocketing drug costs and other out-
     of-pocket medical expenses can spell economic disaster. Among 
     bankruptcy filers age 65 and older, 37 percent are pushed 
     into financial collapse by medical debts. Another 33 percent 
     of those over 65 explain that losing a job has made this 
     difference between getting by and bankruptcy.
       If H.R. 833 is enacted, a senior who has just $100/per 
     month in ``disposable income'' would meet the means test and 
     be unable to file under Chapter 7. Since out-of-pocket 
     medical costs would not generally be considered allowable 
     expenses, this person could easily be placed in a situation 
     of having to pay a credit card company instead of purchasing 
     his blood-pressure medicine.
       We believe that most Americans, particularly most seniors, 
     want to pay their debts. Bankruptcy reform should not punish 
     vulnerable older Americans who face financial catastrophe 
     because of a job loss or medical crisis. I hope that you will 
     oppose H.R. 833 when it is brought to the House floor this 
     week.
           Sincerely,
                                                Martha A. McSteen,
                                                        President.


                          National Council of Senior Citizens,

                                   Silver Spring, MD, May 5, 1999.
     Hon. John Conyers, Jr.,
     U.S. House of Representatives,
     Washington, DC.
       Dear Representative Conyers: The National Council of Senior 
     Citizens supports your motion to recommit H.R. 833. This 
     legislation is pernicious and destructive of the core 
     economic rights of seniors and working families. It would 
     force millions of seniors to make mandatory payments based on 
     a definition of income that would include payments for social 
     security, disability, unemployment compensation, supplemental 
     security income and other income security and welfare needs. 
     We believe that such payments or resources should be excluded 
     from a reasonable definition of income for Federal bankruptcy 
     purposes.
       For million of seniors, these payments are the difference 
     between depravation and survival. They do not fit the 
     definition of disposable income.
       In recent years, fewer than a quarter of a million seniors 
     have annually filed for bankruptcy protection. They are not 
     noted as abusers of bankruptcy systems nor as profligate 
     spenders using credit cards or other forms of credit 
     purchasing.
       However, persons between the ages of 55 and 65 represent 
     the most rapidly growing group of Americans without health 
     insurance. Medical crisis is the most important single cause 
     of credit problems after job loss.
       H.R. 833 would force seniors to put credit card debts ahead 
     of housing needs, family needs, and costs associated with 
     chronic or disabling illness or disease. No provision citing 
     ``extraordinary circumstances'' claims or potential court 
     relief will take away the sense of panic which will strike 
     seniors if current reasonable protections are stripped away 
     for the convenience of predatory financial organizations.
       We urge the recommitment and defeat of H.R. 833.
           Sincerely,
                                                   Steve Protulis,
                                               Executive Director.

  Mr. GEKAS. Mr. Speaker, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Pennsylvania.
  Mr. GEKAS. Mr. Speaker, for the information of the Members, we are 
prepared to accept the motion to recommit with the change as to Social 
Security. It is a welcome change to the language already in the bill. 
We ask that the Members vote in favor of recommittal, and then vote 
``yes'' on final passage.
  Mr. CONYERS. Mr. Speaker, I thank the subcommittee chair.
  Mr. Speaker, I yield to the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, this was an amendment that I 
offered in committee. I thank the chairman for acknowledging the 
importance of the question of protecting Social Security. With that, I 
hope we will claim unanimous victory in protecting our senior citizens 
and making sure that they do not have to choose between medicine and 
food.
  The SPEAKER pro tempore (Mr. Kolbe). Without objection, the previous 
question is ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The motion to recommit was agreed to.
  Mr. GEKAS. Mr. Speaker, pursuant to the instructions of the House, I 
report the bill, H.R. 833, back to the House with an amendment.
  The SPEAKER pro tempore. The Clerk will report the amendment.
  The Clerk read as follows:
  Amendment:

       Page 15, line 19, insert ``and benefits received under the 
     Social Security Act'' after ``humanity''.

  The SPEAKER pro tempore. The question is on the amendment.
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.

[[Page H2771]]

  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. CONYERS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 313, 
nays 108, not voting 13, as follows:

                             [Roll No. 115]

                               YEAS--313

     Aderholt
     Andrews
     Archer
     Armey
     Bachus
     Baird
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bentsen
     Bereuter
     Berkley
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Cardin
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Costello
     Cox
     Cramer
     Crane
     Crowley
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dooley
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Etheridge
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hyde
     Inslee
     Isakson
     Istook
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Kaptur
     Kasich
     Kelly
     Kennedy
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Lampson
     Largent
     Larson
     Latham
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Maloney (NY)
     Manzullo
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Meeks (NY)
     Menendez
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Minge
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Napolitano
     Neal
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ortiz
     Ose
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Paul
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Riley
     Rivers
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sandlin
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Stenholm
     Strickland
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Toomey
     Turner
     Upton
     Velazquez
     Walden
     Walsh
     Wamp
     Watkins
     Weldon (FL)
     Weldon (PA)
     Weller
     Weygand
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Wu
     Young (AK)

                               NAYS--108

     Abercrombie
     Allen
     Baldacci
     Baldwin
     Barrett (WI)
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capuano
     Carson
     Clay
     Clayton
     Clyburn
     Conyers
     Coyne
     Cummings
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dingell
     Dixon
     Doggett
     Doyle
     Edwards
     Engel
     Eshoo
     Evans
     Farr
     Fattah
     Filner
     Ford
     Gejdenson
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hilliard
     Hinchey
     Hoeffel
     Jackson (IL)
     Jackson-Lee (TX)
     Jones (OH)
     Kanjorski
     Kildee
     Kilpatrick
     Klink
     Kucinich
     LaFalce
     Lantos
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Markey
     Martinez
     Mascara
     Matsui
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Murtha
     Nadler
     Oberstar
     Obey
     Olver
     Owens
     Payne
     Pelosi
     Rahall
     Rodriguez
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sawyer
     Schakowsky
     Scott
     Serrano
     Stark
     Stupak
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Udall (CO)
     Udall (NM)
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey

                             NOT VOTING--13

     Ackerman
     Becerra
     Berman
     Brown (CA)
     Gephardt
     Hutchinson
     LaTourette
     Luther
     Simpson
     Slaughter
     Watts (OK)
     Wynn
     Young (FL)

                              {time}  1907

  Mr. HILLIARD changed his vote from ``yea'' to ``nay.''
  Mr. MEEKS of New York and Mr. LAMPSON changed their vote from ``nay'' 
to ``yea.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. LaTOURETTE. Mr. Speaker, if I were present, I would have voted 
``yea'' on final passage of H.R. 833, the Bankruptcy Reform Act.
  Stated against:
  Mr. BERMAN. Mr. Speaker, I was unable to cast a vote on final passage 
of H.R. 833 due to a family emergency. However, had I been present, I 
would have voted ``nay.''

                          ____________________