[Congressional Record Volume 151, Number 8 (Tuesday, February 1, 2005)]
[Senate]
[Pages S740-S821]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. KENNEDY (for himself, Mr. Corzine, and Mr. Lautenberg):
S. 224. A bill to extend the period for COBRA coverage for victims of
the terrorist attacks of September 11, 2001; to the Committee on
Health, Education, Labor, and Pensions.
Mr. KENNEDY. Mr. President, one of the greatest domestic challenges
facing our country today is the soaring cost of health care. It's a
serious problem for millions of families. But when the chief income
earner in a family suddenly becomes unemployed, the problem can be
critical, and we give a helping hand. We give them the opportunity to
continue their coverage through their employer for a reasonable period.
Families who lost loved ones on September 11 deserve the same
opportunity until they can land on their feet again.
The Continuing Care for Recovering Families Act I am introducing
today in the Senate with Senator Corzine and Senator Lautenberg, and
Congressman Markey is introducing today in the House of
Representatives, recognizes that many of the September 11 families are
still struggling to recover and we have an obligation to assist them.
Some of the families have found ways to cover their health costs by
purchasing private insurance or obtaining grant assistance on their
own. For others, employers have agreed to provide coverage. For still
other families, however, the safety net has fallen apart, because their
coverage has expired under COBRA--the temporary low-cost continuation
of coverage available under current Federal law for those who change
their job, lose their job or for families that lose their chief income
earner through death.
The Continuing Care for Recovering Families Act will give spouses and
children of victims of September 11 the ability to purchase or continue
to purchase coverage under COBRA indefinitely, as long as they enroll
within 120 days after passage of the Act or 120 days after they lose
their COBRA coverage. Eligibility for the program would expire only if
they become eligible for Medicare.
The families of September 11 have shown great courage and
extraordinary resilience. But we still have much more to do to help
them on their long and arduous road to recovery, and I hope very much
that we can pass this legislation this year. It will only affect a
small number of families. But for them, it will make a world of a
difference.
______
By Mr. STEVENS (for himself, Mr. Inouye, and Ms. Murkowski):
S. 225. A bill to direct the Secretary of the Interior to undertake a
program
[[Page S741]]
to reduce the risks from and mitigate the effects of avalanches on
recreational users of public land; to the Committee on Energy and
Natural Resources.
Mr. STEVENS. Mr. President, today I introduce, with Senators Inouye
and Murkowski, the Federal Land Recreational Visitor Protection Act of
2005.
Across our State of Alaska, Western States, and areas of the
Northeast, local governments and businesses struggle each year to
remove potential avalanches or recover from the disastrous effects of
avalanches.
While such damage can bring hardships to many local communities, none
can compare with the loss of a friend or family member. The U.S.
averages over 20 deaths a year from avalanches, a majority of which are
results of recreational activities in unmitigated avalanche areas.
Earlier in January, 3 people were killed in two separate avalanches in
northern Idaho and Utah, bringing the total number of people already
killed in the U.S. this winter season to 16.
Some States try and set aside money for rescues prior to the winter
season, knowing that the resources required to clear all avalanche
threats are not at hand.
This bill brings those resources to the entities that need them the
most, enabling us to significantly reduce the effects of avalanches on
visitors, recreational users, transportation corridors, and our local
communities.
______
By Mr. DeWINE (for himself and Mrs. Clinton):
S. 226. A bill to amend the Public Health Service Act to improve
immunization rates by increasing the supply of vaccines; to the
Committee on Health, Education, Labor, and Pensions.
Mr. DeWINE. Mr. President, I rise today, along with my colleague from
New York, Senator Clinton, to introduce the Improved Vaccine Supply
Act--a bill that would help ensure that our Nation's public health
system has an adequate vaccine supply.
We all know that vaccinations are critical in our efforts to keep our
population, particularly children and the elderly, healthy. They are
key to protecting the elderly from influenza during flu season and
protecting children from contracting polio or the mumps. Vaccinations,
inoculations, immunizations--whatever you want to call them--also help
lessen the threat of bacterial or viral infections and potential
disease outbreaks.
Currently, it is recommended that children receive 12 routine
vaccinations against preventable diseases. These vaccinations are given
in a series of shots and booster shots by the age of two, with an
additional four doses later in life. This ends up being about 16 to 20
doses of vaccines for children.
Any shortage of vaccines is not acceptable, and we should do all we
can to prevent any future shortage. As a Senator, and more importantly,
as a parent of eight and grandparent of eight, I believe that nothing
is more important than the health and safety of our children. While we
are not currently experiencing a shortage, we know that the vaccine
market is unstable and unpredictable. According to the Centers for
Disease Control's National Immunization Program, there were several
reasons for the shortages in past years. The CDC concluded and posted
on its website that the ``reasons for these shortages were multi-
factorial and included companies leaving the vaccine market,
manufacturing or production problems, and insufficient stockpiles.''
The CDC did as good a job as it could, considering the vaccine
shortages our Nation has faced in past years. The agency's website has
posted information about shortages and released revised vaccine
schedules to keep our public informed and knowledgeable about
vaccination shortages. But, even with the strong efforts of the CDC, we
need to work toward preventing a future vaccine shortage. We need a
more permanent solution. The bill I am introducing will go a long way
toward doing just that.
The bill we are introducing today--the Improved Vaccine Supply Act--
would help bring some stability to our fragile vaccine supply. Unlike
drug manufacturers, vaccine manufacturers do not have to give notice
when they stop making a vaccine, whether the vaccine is withdrawn from
the market intentionally or because the manufacturer is simply unable
to continue making the vaccine. Essentially, these manufacturers leave
the marketplace with no notice and no warning. Most doctors and
hospitals--and more importantly parents and older adults--often have no
idea that a vaccine is in short supply until they line up for a flu
shot or go to the doctor for their child's immunizations.
Our bill would change this. It would require any manufacturer of a
vaccine to give a one-year notice of discontinuance. By giving notice,
the Centers for Disease Control (CDC) and the Food and Drug
Administration (FDA) would be better able to ensure an adequate vaccine
supply for our Nation's population. Additionally, our bill would
require all drug and vaccine manufacturers to give notice when they
withdraw from the market. This change would ensure that we have a
better sense of who is making vaccines and drugs and would allow the
CDC and FDA to monitor the manufacturer's production and release of
vaccines.
Let me explain why this is important. Vaccines, or biological
products, are difficult to develop and manufacture. They are more
complex than drugs. Because of this, it takes longer for a biological
product to reach the market. For example, a pharmaceutical company that
manufactured tetanus vaccine stopped producing it, leaving only one
company to produce tetanus vaccine for the entire country. The
remaining company increased production to accommodate all of the needs
of the United States. Despite this, it still required about 11 months
for the vaccine to be ready for release. In other words, it took 11
months for the company to ramp-up production to meet demand. Our bill
would create a notification mechanism to capture those drugs and
vaccines leaving the market so we can avoid future vaccine and drug
shortages.
Our bill also would require the Secretary, acting through the CDC, to
develop a plan for the purchase, storage, and rotation of a supply of
vaccines sufficient to provide routinely recommended vaccinations for a
six-month period for children and adults. Essentially, it would create
a framework for the CDC to develop a national vaccine stockpile to
ensure that childhood vaccine shortages simply do not occur.
Our children need and deserve timely vaccinations. When childhood
vaccinations are in short supply or are unavailable, they do without,
living unprotected against disease. That should never happen. The bill
we are introducing today is another step toward ensuring that children
get the vaccines they need and that they get them at the right time. I
urge my colleagues to join me in support of this important public
health legislation.
I ask unanimous consent that the text the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 226
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improved Vaccine Supply
Act''.
SEC. 2. SUPPLY OF VACCINES.
Title XXI of the Public Health Service Act (42 U.S.C.
300aa-1 et seq.) is amended by adding at the end the
following:
``Subtitle 3--Adequate Vaccine Supply
``SEC. 2141. SUPPLY OF VACCINES.
``(a) In General.--
``(1) Plan.--Not later than 6 months after the date of
enactment of this section, the Secretary, acting through the
Director of the Centers for Disease Control and Prevention,
shall develop a plan for the purchase, storage, and rotation
of a supply of vaccines sufficient to provide routinely
recommended vaccinations for a 6-month period for--
``(A) a national stockpile of vaccines for all children as
authorized under section 1928(d)(6) of the Social Security
Act (42 U.S.C. 1396s(d)(6)); and
``(B) adults.
``(2) Supply.--The supply of vaccines under paragraph (1)
shall--
``(A) include all vaccines routinely recommended for
children by the Advisory Committee on Immunization Practices;
and
``(B) include all vaccines routinely recommended for adults
by the Advisory Committee on Immunization Practices.
``(3) Supply authority.--The Secretary shall carry out--
``(A) paragraph (2)(A) using the authority provided for
under section 1928(d)(6) of the
[[Page S742]]
Social Security Act (42 U.S.C. 1396s(d)(6)); and
``(B) paragraph (2)(B) using--
``(i) the authority provided for under section 317; and
``(ii) any other authority relating to the vaccines
described in such paragraph.
``(b) Submission of Plan.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Secretary shall submit the
plan developed under subsection (a) to--
``(A) the Committee on Health, Education, Labor, and
Pensions of the Senate;
``(B) the Committee on Finance of the Senate; and
``(C) the Committee on Energy and Commerce of the House of
Representatives.
``(2) Inclusions.--The plan shall include a discussion of
the considerations that formed--
``(A) the basis for the plan; and
``(B) the prioritization of the schedule for purchasing
vaccines set forth in the plan.
``(c) Implementation of the Plan.--Not later than September
30, 2007, the Secretary shall fully implement the plan
developed under subsection (a).
``(d) Notice.--
``(1) In general.--For the purposes of maintaining and
administering the supply of vaccines described under
subsection (a), the Secretary shall require by contract that
the manufacturer of a vaccine included in such supply provide
not less than 1 year notice to the Secretary of a
discontinuance of the manufacture of the vaccine, or of other
factors, that may prevent the manufacturer from providing
vaccines pursuant to an arrangement made to carry out this
section.
``(2) Reduction of period of notice.--The notification
period required under paragraph (1) may be reduced if the
manufacturer certifies to the Secretary that good cause
exists for reduction, under the conditions described in
section 506C(b) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 356c).
``(e) Proceeds.--Any proceeds received by the Secretary
from the sale of vaccines contained in the supply maintained
pursuant to this section, shall be available to the Secretary
for the purpose of purchasing additional vaccines for the
supply. Such proceeds shall remain available until expended.
``(f) Ongoing Reports.--
``(1) In general.--Not later than 2 years after submitting
the plan pursuant to subsection (b), and periodically
thereafter, the Secretary shall submit a report to the
Committees identified in subsection (b)(1) that--
``(A) details the progress made in implementing the plan
developed under subsection (a); and
``(B) notes impediments, if any, to implementing the plan
developed under subsection (a).
``(2) Recommendation.--The Secretary shall include in the
first of such reports required under paragraph (1)--
``(A) a recommendation as to whether the vaccine supply
should be extended beyond the 6-month period provided in
subsection (a); and
``(B) a discussion of the considerations that formed the
recommendation under subparagraph (A).
``(g) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section such
sums as may be necessary for each of fiscal years 2006
through 2011.''.
______
By Mr. BINGAMAN (for himself and Mr. Domenici):
S. 229. A bill to clear title to certain real property in New Mexico
associated with the Middle Rio Grande Project, and for other purposes;
to the Committee on Energy and Natural Resources.
Mr. BINGAMAN. Mr. President, today I am pleased to introduce the
Albuquerque Biological Park Title Clarification Act with my colleague
Senator Domenici. This bill, which passed the Senate in the 108th
Congress, is necessary to assist the City of Albuquerque, NM clear
title to two parcels of land located along the Rio Grande. If title is
cleared, the City will be able to move forward with its plans to
improve the properties as part of a Biological Park Project, a city
funded initiative to create a premier environmental educational center
for its citizens, and the entire State of New Mexico.
The Biological Park Project has been in the works since 1987 when the
City began to develop an aquarium and botanic garden along the banks of
the Rio Grande. Those facilities constitute just a portion of the
overall project. As part of this effort, in 1997, the City purchased
two properties from the Middle Rio Grande Conservancy District (MRGCD)
for $3,875,000. The first property, Tingley Beach, had been leased by
the City from MRGCD since 1931 and used for public park purposes. The
second property, San Gabriel Park, had been leased by the City since
1963, and also used for public park purposes.
In the year 2000, the City's plans were interrupted when the U.S.
Bureau of Reclamation asserted that in 1953, it had acquired ownership
of all of MRGCD's property associated with the Middle Rio Grande
Project. The United States' assertion called into question the validity
of the 1997 transaction between the City and MRGCD. Both MRGCD and the
City dispute the United States' claim of ownership.
This dispute is unnecessarily delaying and complicating the City's
progress in developing the Biological Park Project. If the matter is
simply left to litigation, the delay will be indefinite. Reclamation
has already determined that the two properties are surplus to the needs
of the Middle Rio Grande Project. Moreover, the record indicates that
Reclamation had once considered releasing its interest in the
properties for $1.00 each. Obviously, the federal interest in these
properties is low while the local interest is high. This bill is
narrowly tailored to address this local interest, affecting only the
two properties at issue. The general dispute concerning title to
project works is left for the courts to decide.
I hope my colleagues will work with me to help resolve this issue.
While much of what we do here in the Congress is complex and time-
consuming work, we should also have the ability to move quickly when
necessary and appropriate to solve local problems caused by federal
actions. I therefore urge my colleagues to support this legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 229
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Albuquerque Biological Park
Title Clarification Act''.
SEC. 2. PURPOSE.
The purpose of this Act is to direct the Secretary of the
Interior to issue a quitclaim deed conveying any right,
title, and interest the United States may have in and to
Tingley Beach or San Gabriel Park to the City, thereby
removing the cloud on the City's title to these lands.
SEC. 3. DEFINITIONS.
In this Act:
(1) City.--The term ``City'' means the City of Albuquerque,
New Mexico.
(2) Middle rio grande conservancy district.--The terms
``Middle Rio Grande Conservancy District'' and ``MRGCD'' mean
a political subdivision of the State of New Mexico, created
in 1925 to provide and maintain flood protection and
drainage, and maintenance of ditches, canals, and
distribution systems for irrigation and water delivery and
operations in the Middle Rio Grande Valley.
(3) Middle rio grande project.--The term ``Middle Rio
Grande Project'' means the works associated with water
deliveries and operations in the Rio Grande basin as
authorized by the Flood Control Act of 1948 (Public Law 80-
858; 62 Stat. 1175) and the Flood Control Act of 1950 (Public
Law 81-516; 64 Stat. 170).
(4) San gabriel park.--The term ``San Gabriel Park'' means
the tract of land containing 40.2236 acres, more or less,
situated within Section 12 and Section 13, T10N, R2E,
N.M.P.M., City of Albuquerque, Bernalillo County, New Mexico,
and described by New Mexico State Plane Grid Bearings
(Central Zone) and ground distances in a Special Warranty
Deed conveying the property from MRGCD to the City, dated
November 25, 1997.
(5) Tingley beach.--The term ``Tingley Beach'' means the
tract of land containing 25.2005 acres, more or less,
situated within Section 13 and Section 24, T10N, R2E,
N.M.P.M., City of Albuquerque, Bernalillo County, New Mexico,
and described by New Mexico State Plane Grid Bearings
(Central Zone) and ground distances in a Special Warranty
Deed conveying the property from MRGCD to the City, dated
November 25, 1997.
SEC. 4. CLARIFICATION OF PROPERTY INTEREST.
(a) Required Action.--The Secretary of the Interior shall
issue a quitclaim deed conveying any right, title, and
interest the United States may have in and to Tingley Beach
and San Gabriel Park to the City.
(b) Timing.--The Secretary shall carry out the action in
subsection (a) as soon as practicable after the date of
enactment of this title and in accordance with all applicable
law.
(c) No Additional Payment.--The City shall not be required
to pay any additional costs to the United States for the
value of San Gabriel Park and Tingley Beach.
SEC. 5. OTHER RIGHTS, TITLE, AND INTERESTS UNAFFECTED.
(a) In General.--Except as expressly provided in section 4,
nothing in this Act shall be construed to affect any right,
title, or interest in and to any land associated with the
Middle Rio Grande Project.
(b) Ongoing Litigation.--Nothing contained in this Act
shall be construed or utilized to affect or otherwise
interfere with any position set forth by any party in the
[[Page S743]]
lawsuit pending before the United States District Court for
the District of New Mexico, No. CV 99-1320 JP/RLP-ACE,
entitled Rio Grande Silvery Minnow v. John W. Keys, III,
concerning the right, title, or interest in and to any
property associated with the Middle Rio Grande Project.
______
By Mr. ROBERTS:
S. 233. A bill to increase the supply of quality child care; to the
Committee on Health, Education, Labor, and Pensions.
Mr. ROBERTS. Mr. President, I am pleased and honored today to
introduce the ``Caring for Children Act''--a bill designed to help meet
the child care challenges facing families, child care providers and
small businesses around the Nation.
Child care, in the home when possible and outside the home when both
parents work, goes right to the heart of keeping families strong.
Unfortunately, finding quality, affordable child care is one of the
most pressing problems for families in Kansas and around the country.
It is estimated that quality child care can cost as much or more than
college tuition in some areas.
The ``Caring for Children Act'' takes the first steps in addressing
this challenge through a responsible approach. This legislation expands
child care opportunities without unnecessary government intervention or
mandates. This legislation will help working families who want quality
child care for their children, child care providers who aim to provide
the highest quality of care, and small businesses who currently may not
have the resources to provide child care for their employees.
The ``Caring for Children Act'' recognizes that small businesses play
a critical role in providing child care options to millions of working
parents. Unfortunately, small businesses generally do not have the
resources required to start up and support a child care center. This
legislation includes a short-term, flexible grant program to encourage
small businesses to work together or with established local child care
organizations to provide child care services for employees. This
program is more of a demonstration project that will sunset at the end
of five years. In the meantime, small businesses will be eligible for
grants up to $250,000 for start-up costs, training, scholarships, or
other related activities. Businesses, however, will be required to
match Federal funds to encourage self-sustaining facilities well into
the future. Business must continue to meet State quality and health
standards. In essence, this grant program takes the necessary steps to
ensuring small businesses and other local organizations are able to
work together to provide child care for employees.
The ``Caring for Children Act'' also addresses another key component
of quality child care: child care training. My bill creates a new grant
program to allow organizations to develop and operate distance learning
child care training infrastructures and to develop model technology-
based training courses for child care providers. These infrastructures
and courses will enable child care providers to receive the training,
education and support they need to improve the quality of child care.
The ``Caring for Children Act'' encourages grantees to work with
secondary schools, institutions of higher education, state and local
governments, and child care organizations to promote networking,
information sharing, and resource sharing. These grants will be
targeted to those areas with the fewest training opportunities for
child care providers.
Child care is an issue that impacts each and every one of us. While
parents continue to struggle to meet the constant demand of work and
family, we must continue to do our part to expand child care options
and protect our nation's most valuable resource, our children. I look
forward to working with all of my colleagues in this important effort.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 233
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Caring for Children Act''.
TITLE I--CHILD CARE TRAINING THROUGH DISTANCE LEARNING
SEC. 101. GRANTS FOR THE DEVELOPMENT OF A CHILD CARE TRAINING
INFRASTRUCTURE.
(a) Authority to Award Grants.--The Secretary of Health and
Human Services shall award grants to eligible entities to
develop distance learning child care training technology
infrastructures and to develop model technology-based
training courses for child care providers and child care
workers, to be provided through distance learning programs
made available through the infrastructure. The Secretary
shall, to the maximum extent possible, ensure that such
grants are awarded in those regions of the United States with
the fewest training opportunities for child care providers.
(b) Eligibility Requirements.--To be eligible to receive a
grant under subsection (a), an entity shall--
(1) develop the technological and logistical aspects of the
infrastructure described in this section and have the
capability of implementing and maintaining the
infrastructure;
(2) to the maximum extent possible, develop partnerships
with secondary schools, institutions of higher education,
State and local government agencies, and private child care
organizations for the purpose of sharing equipment, technical
assistance, and other technological resources, including--
(A) developing sites from which individuals may access the
training;
(B) converting standard child care training courses to
programs for distance learning; and
(C) promoting ongoing networking among program
participants; and
(3) develop a mechanism for participants to--
(A) evaluate the effectiveness of the infrastructure,
including the availability and affordability of the
infrastructure, and the training offered through the
infrastructure; and
(B) make recommendations for improvements to the
infrastructure.
(c) Application.--To be eligible to receive a grant under
subsection (a), an entity shall submit an application to the
Secretary at such time and in such manner as the Secretary
may require, and that includes--
(1) a description of the partnership organizations through
which the distance learning programs will be made available;
(2) the capacity of the infrastructure in terms of the
number and type of distance learning programs that will be
made available;
(3) the expected number of individuals to participate in
the distance learning programs; and
(4) such additional information as the Secretary may
require.
(d) Limitation on Fees.--No entity receiving a grant under
this section may collect fees from an individual for
participation in a distance learning program funded in whole
or in part under this section that exceed the pro rata share
of the amount expended by the entity to provide materials for
the program and to develop, implement, and maintain the
infrastructure (minus the amount of the grant awarded under
this section).
(e) Rule of Construction.--Nothing in this section shall be
construed as requiring a child care provider to subscribe to
or complete a distance learning program made available under
this section.
SEC. 102. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out this
title $50,000,000 for each of fiscal years 2006 through 2010.
TITLE II--REMOVAL OF BARRIERS TO INCREASING THE SUPPLY OF QUALITY CHILD
CARE
SEC. 201. SMALL BUSINESS CHILD CARE GRANT PROGRAM.
(a) Establishment.--The Secretary of Health and Human
Services (referred to in this section as the ``Secretary'')
shall establish a program to award grants to States, on a
competitive basis, to assist States in providing funds to
encourage the establishment and operation of employer
operated child care programs.
(b) Application.--To be eligible to receive a grant under
this section, a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require,
including an assurance that the funds required under
subsection (e) will be provided.
(c) Amount of Grant.--The Secretary shall determine the
amount of a grant to a State under this section based on the
population of the State as compared to the population of all
States receiving grants under this section.
(d) Use of Funds.--
(1) In general.--A State shall use amounts provided under a
grant awarded under this section to provide assistance to
small businesses located in the State to enable the small
businesses to establish and operate child care programs. Such
assistance may include--
(A) technical assistance in the establishment of a child
care program;
(B) assistance for the startup costs related to a child
care program;
(C) assistance for the training of child care providers;
(D) scholarships for low-income wage earners;
(E) the provision of services to care for sick children or
to provide care to school aged children;
[[Page S744]]
(F) the entering into of contracts with local resource and
referral or local health departments;
(G) assistance for care for children with disabilities; or
(H) assistance for any other activity determined
appropriate by the State.
(2) Application.--To be eligible to receive assistance from
a State under this section, a small business shall prepare
and submit to the State an application at such time, in such
manner, and containing such information as the State may
require.
(3) Preference.--
(A) In general.--In providing assistance under this
section, a State shall give priority to applicants that
desire to form a consortium to provide child care in a
geographic area within the State where such care is not
generally available or accessible.
(B) Consortium.--For purposes of subparagraph (A), a
consortium shall be made up of 2 or more entities that may
include businesses, nonprofit agencies or organizations,
local governments, or other appropriate entities.
(4) Limitation.--With respect to grant funds received under
this section, a State may not provide in excess of $250,000
in assistance from such funds to any single applicant.
(e) Matching Requirement.--To be eligible to receive a
grant under this section a State shall provide assurances to
the Secretary that, with respect to the costs to be incurred
by an entity receiving assistance in carrying out activities
under this section, the entity will make available (directly
or through donations from public or private entities) non-
Federal contributions to such costs in an amount equal to--
(1) for the first fiscal year in which the entity receives
such assistance, not less than 50 percent of such costs ($1
for each $1 of assistance provided to the entity under the
grant);
(2) for the second fiscal year in which the entity receives
such assistance, not less than 66\2/3\ percent of such costs
($2 for each $1 of assistance provided to the entity under
the grant); and
(3) for the third fiscal year in which the entity receives
such assistance, not less than 75 percent of such costs ($3
for each $1 of assistance provided to the entity under the
grant).
(f) Requirements of Providers.--To be eligible to receive
assistance under a grant awarded under this section a child
care provider shall comply with all applicable State and
local licensing and regulatory requirements and all
applicable health and safety standards in effect in the
State.
(g) State-level Activities.--A State may not retain more
than 3 percent of funds for State administration and other
State-level activities.
(h) Administration.--
(1) State responsibility.--A State shall have
responsibility for administering a grant awarded for the
State under this section and for monitoring entities that
receive assistance under such grant.
(2) Audits.--A State shall require each entity receiving
assistance under the grant awarded under this section to
conduct an annual audit with respect to the activities of the
entity. Such audits shall be submitted to the State.
(3) Misuse of funds.--
(A) Repayment.--If the State determines, through an audit
or otherwise, that an entity receiving assistance under a
grant awarded under this section has misused the assistance,
the State shall notify the Secretary of the misuse. The
Secretary, upon such a notification, may seek from such an
entity the repayment of an amount equal to the amount of any
such misused assistance plus interest.
(B) Appeals process.--The Secretary shall by regulation
provide for an appeals process with respect to repayments
under this paragraph.
(i) Reporting Requirements.--
(1) 2-year study.--
(A) In general.--Not later than 2 years after the date on
which the Secretary first awards grants under this section,
the Secretary shall conduct a study to determine--
(i) the capacity of entities to meet the child care needs
of communities within States;
(ii) the kinds of partnerships that are being formed with
respect to child care at the local level to carry out
programs funded under this section; and
(iii) who is using the programs funded under this section
and the income levels of such individuals.
(B) Report.--Not later than 28 months after the date on
which the Secretary first awards grants under this section,
the Secretary shall prepare and submit to the appropriate
committees of Congress a report on the results of the study
conducted in accordance with subparagraph (A).
(2) 4-year study.--
(A) In general.--Not later than 4 years after the date on
which the Secretary first awards grants under this section,
the Secretary shall conduct a study to determine the number
of child care facilities funded through entities that
received assistance through a grant awarded under this
section that remain in operation and the extent to which such
facilities are meeting the child care needs of the
individuals served by such facilities.
(B) Report.--Not later than 52 months after the date on
which the Secretary first awards grants under this section,
the Secretary shall prepare and submit to the appropriate
committees of Congress a report on the results of the study
conducted in accordance with subparagraph (A).
(j) Definition.--In this section, the term ``small
business'' means an employer who employed an average of at
least 2 but not more than 50 employees on business days
during the preceding calendar year.
(k) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated to
carry out this section, $50,000,000 for the period of fiscal
years 2006 through 2010.
(2) Evaluations and administration.--With respect to the
total amount appropriated for such period in accordance with
this subsection, not more than $2,500,000 of that amount may
be used for expenditures related to conducting evaluations
required under, and the administration of, this section.
(l) Termination of Program.--The program established under
subsection (a) shall terminate on September 30, 2011.
______
By Mr. NELSON of Nebraska (for himself, Ms. Collins, Ms.
Cantwell, and Mrs. Murray):
S. 236. A bill to amend title XVIII of the Social Security Act to
clarify the treatment of payment under the medicare program for
clinical laboratory tests furnished by critical access hospitals; to
the Committee on Finance.
Mr. NELSON of Nebraska. Mr. President. Today, I introduce legislation
that will overturn a new regulation that is putting critical access
hospitals (CAH) at risk by arbitrarily lowering the Medicare
reimbursement for laboratory services. Sixty rural hospitals in
Nebraska will be negatively impacted unless this regulation is
reversed.
This legislation would repeal a Center for Medicare and Medicaid
Services' (CMS) regulation that would prohibit critical access
hospitals from being reimbursed at-cost for laboratory services, unless
patients are ``physically present in a critical access hospital'' when
laboratory specimens are collected. Many CAHs provide laboratory
services in rural health clinics (RHCs) and nursing homes in smaller,
neighboring communities, as well as in home-health settings; however,
the elimination of cost-based reimbursement may make it prohibitive for
them to continue offering off-site laboratory testing. In short, under
the new regulation, lab services would not be reimbursed by CMS unless
the patient is at the facility where testing will occur.
This change jeopardizes rural Americans' access to care by imposing
an additional burden on the frail elderly by requiring them to visit
the hospital to get simple lab tests done. The additional time and
expense incurred by the patient is unnecessary if the CAR is willing
and able to conduct tests at the point of patient care and transport it
back to the hospital for analysis.
Congress created the CAR program in 1997 to ensure that those in
isolated, rural communities have access to health care. To protect the
viability of these hospitals, often a community's only source of vital
health care services, Congress established cost-based reimbursement for
Medicare inpatient and outpatient services--regardless of where the
services are provided. The new regulation would fundamentally alter
this well-established practice.
We have tried to work with CMS to change the rule. In November of
2003, I was joined by 28 Senators in a bipartisan letter to the
Administrator of CMS asking for his assistance in constructing a rule
that does not penalize CAHs for offering off-site laboratory services.
Unfortunately, CMS responded that the rule would stay intact.
I am pleased to be joined in this effort by Senator Susan Collins.
Senator Collins has been a strong advocate for rural health care, and I
look forward to working together on this legislation.
The Nebraska critical access hospitals affected by the regulation
are:
Harlan County Health System in Alma
Fillmore County Hospital in Geneva
Pawnee County Memorial Hospital in Pawnee City
Niobrara Valley Hospital Corporation in Lynch
Thayer County Health Services in Hebron
Kimball County Hospital in Kimball
Kearney County Health Services/Hospital in Minden
Saunders County Health Services in Wahoo
Henderson Health Care Services in Henderson
[[Page S745]]
Community Memorial Hospital in Syracuse
Garden County Hospital & Nursing Home in Oshkosh
Franklin County Memorial Hospital in Franklin
Genoa Community Hospital in Genoa
Gothenburg Memorial Hospital in Gothenburg
Annie Jeffrey Memorial County Health Center in Osceola
Brodstone Memorial Nuckolls County Hospital in Superior
Webster County Community Hospital in Red Cloud
Tilden Community Hospital in Tilden
Morrill County Community Hospital in Bridgeport
Jefferson Community Health Center in Fairbury
Memorial Hospital in Aurora
Oakland Memorial Hospital in Oakland
St. Francis Memorial Hospital in West Point
Alegent Health Memorial Hospital in Schuyler
Nemaha County Hospital in Auburn
Brown County Hospital in Ainsworth
Antelope Memorial Hospital in Neligh
Cozad Community Hospital in Cozad
Litzenberg Memorial County Hospital in Central City
Avera St. Anthony's Hospital in O'Neill
Warren Memorial Hospital in Friend
Creighton Area Health Services in Creighton
Butler County Health Care Center in David City
Rock County Hospital in Bassett
Boone County Health Center in Albion
Callaway District Hospital in Callaway
York General Hospital in York
Howard County Community Hospital in St. Paul
Memorial Hospital CAH in Seward
Dundy County Hospital in Benkelman
Chadron Community Hospital Health Services in Chadron
St. Mary's Hospital in Nebraska City
West Holt Memorial Hospital in Atkinson
Cherry County Hospital in Valentine
Providence Medical Center in Wayne
Plainview Public Hospital in Plainview
Osmond General Hospital in Osmond
Tri Valley Health System in Cambridge
Pender Community Hospital in Pender
Johnson County Hospital in Tecumseh
Chase County Community Hospital in Imperial
Community Medical Center in Falls City
Valley County Hospital in Ord
Crete Area Medical Center in Crete
Ogallala Community Hospital in Ogallala
Perkins County Health Services in Grant
Memorial Health Center in Sidney
Gordon Memorial Hospital District in Gordon
Memorial Community Hospital in Blair
Box Butte General Hospital in Alliance
______
By Mr. LAUTENBERG:
S. 237. A bill to amend title 23, United States Code, to ensure that
certain states remain eligible for Federal highway funds; to the
Committee on Environment and Public Works.
Mr. LAUTENBERG. Mr. President, I rise to introduce a bill to correct
a serious problem in Federal law which prevents States like New Jersey
from receiving vital Federal highway funds under certain conditions.
On September 22, 2004, former New Jersey Governor James McGreevey
issued an Executive Order that prohibited the State from entering into
certain contracts. Governor McGreevey took this step to ensure fairness
and transparency in the contracting process, and under current Federal
laws, our State is being punished for it.
Bush administration officials interpreted Federal law as prohibiting
this type of action by New Jersey and consequently withheld
authorization of Federal funding for highway projects in our State,
putting some $250 million in highway projects at risk.
I worked with Department of Transportation Secretary Norman Mineta in
an attempt to resolve this problem quickly. Ultimately, Acting Governor
Richard Codey reluctantly suspended the part of the Executive Order
causing the problem. But since that's not really a permanent solution,
I am introducing this legislation today.
New Jersey's transportation infrastructure is vital to millions of
travelers and the entire East Coast economy. It is estimated that some
70 billion vehicle miles are traveled in New Jersey each year, but only
6 million drivers are licensed in our State. In addition, projected
increases in port traffic will put 80 percent more trucks on the roads
in the next 15 years, which will exacerbate congestion and continue to
tax our infrastructure.
In short, I believe that New Jersey's good intentions should not cost
our State the Federal highway funding we need so desperately.
I thank my colleague and friend Senator Corzine for co-sponsoring
this legislation, and I look forward to working with my colleagues in
getting it enacted.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 237
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pay to Play Reform
Protection Act''.
SEC. 2. PAY TO PLAY REFORM.
Section 112 of title 23, United States Code, is amended by
adding at the end the following:
``(h) Construction.--Nothing in this section prohibits a
State from enacting a law or issuing an order that limits the
amount of money an individual who is doing business with a
State agency for a Federal-aid highway project may contribute
to a political campaign.''.
______
By Ms. SNOWE (for herself, Mr. Wyden, Mr. McCain, Mrs. Feinstein,
and Mr. Feingold):
S. 239. A bill to reduce the costs of prescription drugs for medicare
beneficiaries, and for other purposes; to the Committee on Finance.
Ms. SNOWE. Mr. President, Senator Wyden and I broke new ground
together when we introduced the first bipartisan Medicare Prescription
drug bill known as SPICE back in 1999. And after Congress passed the
historic Medicare Modernization Act of 2003, Senator Wyden and I
authored legislation aimed at ensuring long term value of the drug
benefit to seniors. Today we are joined again by Senator Feinstein, who
has been committed with us to forging a bipartisan effort to do what we
must today--to move beyond offering a benefit and ensure that we meet
our obligation to address affordability.
When we consider both a recent ten year cost estimate of over $534
billion for the prescription drug benefit, and drug price increases
which have rapidly outpaced inflation and earnings, we could see the
benefit to seniors depreciated--and the cost to the Federal Government
increased. So today we introduce The Medicare Enhancements for Needed
Drugs Act of 2005, MEND, today to manage costs, and assure seniors will
receive better value for their dollar.
This bill provides both better consumer information to help
beneficiaries and the negotiation power to assure that the power of
millions of seniors will result in competitive pricing. That is why two
of our colleagues--Senators McCain and Feingold--have now joined us in
this effort.
Ours is a simple approach informed by a ``healthy dosage'' of common
sense. It simply makes no sense to cut off the ability of the HHS
Secretary--the individual who is responsible for the success of this
benefit--from negotiating on behalf of beneficiaries. That's why our
legislation repeals the ``noninterference provision'' of the
prescription drug bill and authorizes the Secretary of Health and Human
Services to participate in negotiations on drug prices. Last month when
Secretary Thompson announced his departure from HHS, he described
several issues of critical concern--one of these was that he had been
barred from negotiating on behalf of beneficiaries. He noted, ``I would
like to have had the opportunity to negotiate''. And for good reason!
The Congressional Budget
[[Page S746]]
Office has confirmed that this negotiation authority can help us
realize savings, particularly for drugs that lack significant
competition.
When Senator Gregg recently queried Secretary Leavitt about keeping
the cost of the Part D program within the original $400 billion budget,
and the Secretary asserted that ``It's my practice as a manager to act
within my budget''. That will require competition, so I ask why
wouldn't we employ negotiation to do what it does best--drive costs
down? I asked Secretary Leavitt about negotiation at his confirmation
hearing in the Finance Committee and he told me, ``I know little about
negotiation authority, but there are times when the national government
should play a role''. Well, that time is now. Senator Wyden and I have
received our first report on drug price trends from the GAO, and the
news isn't good. Since 2000, the increase in prescription drug prices
has increase at two to three times the rate of inflation. And worse, we
found the rate spiked in 2002, just as we were working to create a
prescription drug benefit. It's no wonder that the Congressional Budget
Office projects an annual increase of about 8.5 percent in costs, most
of which can be attributed to the rise in prices. But we can address
this problem, and avoid depreciating the value of this long sought
benefit.
To do so you must do more than simply end the prohibition on the
Secretary negotiating, you must do more than simply granting permissive
authority, you must actually ensure that when needed, the Secretary
will negotiate.
So our legislation will not only empower the HHS Secretary to
negotiate but, under two circumstances, requires it. For those
beneficiaries who do not have access to two prescription drug plans,
the Secretary steps in with a fallback plan, and this plan must be
competitive--so the Secretary must assure that he negotiates on behalf
of those beneficiaries. In addition, the Secretary must be responsive
to the needs of the plan providers. When a manufacturer simply is not
inclined to negotiate--as may occur when competition for a drug is
lacking--then the Secretary must respond when plans request his
assistance in negotiations.
Some will say this will compel excessive involvement by the
Secretary, but the truth is quite to the contrary. Plans will compete
to gain advantage, and it is when they are stymied and cannot achieve
reasonable discounts that they will call upon the Secretary. CBO
foresaw one such situation--when a drug lacks significant competition--
and those are among our most expensive drugs!
The buying power of millions of seniors should produce substantial
savings, but at the same time, competitive plans won't help if seniors
cannot identify which plan is right for them.
Senator Wyden and I believe we must arm beneficiaries with
information. Our bill requires GAO to track not only the price of drugs
under the Medicare program, but calls for that price to be compared to
the price negotiated by the VA, DOD and other privately run systems. We
will have a measure of how well the seniors are being served.
This bill will also help seniors determine which Medicare plan offers
the most savings by requiring that beginning in 2007 the Centers for
Medicare and Medicaid Services will determine the savings received from
each plan by the average Medicare beneficiary, using a market basket of
commonly-used drugs. This will allow seniors to make the proverbial
``apples to apples'' comparison. This information will be shared with
all beneficiaries during the annual enrollment period each fall, and
will be a great help as a starting point for seniors to compare plans.
Our legislation will make annual the report Senator Wyden and I first
requested following passage of the prescription drug bill in 2003. We
asked the GAO to review changes in drug prices from 2000 through 2003,
focusing on the drugs most likely to be used by seniors, and the
results are in: Prescription drug prices have increased at two to three
times the rate of inflation.
Finally, many advocates and seniors alike have raised questions about
the restriction of Medigap policies under the new Part D benefit. The
prohibition of the sale of new Medigap policies which include
prescription drug coverage has prompted the need for a re-examination
of the role of Medigap plans. So we have directed the Secretary to work
with the National Association of Insurance Commissioners to conduct a
review of the changes to the Medigap policies and to evaluate the
impact on Medicare beneficiaries. It is an important step in looking at
the future of Medigap plans. With this report in hand, we will have the
information necessary to make wise adjustments.
Some say we don't need to act now. But we have seen drug price
increases which are driving costs upwards--contributing to the
estimated 8.5 percent annual increases in costs projected by CBO. We
simply cannot wait until 2006 to address the issue of drug prices. This
bill provides beneficiaries and our government with the information and
tools necessary to achieve access to low-cost prescription drugs. I
urge my colleagues to join me in support of this bill so that we can
pass it quickly.
Mr. WYDEN. Mr. President, Senator Snowe and I are once again teaming
up to work on a bipartisan commonsense proposal to help America's
seniors receive affordable prescription drugs. Our bill, ``The Medicare
Enhancement for Needed Drugs Act'' or ``MEND Act'' focuses on cost
containment.
At our request, the U.S. Government Accountability Office (GAO)
recently reviewed drug cost trends. For 77 prescription drugs
frequently used by seniors on Medicare the usual and customary price
increased 21.8 percent from January 2000 through June 2004, a 4.6
percent average annual rate of increase. They also found that the
process for the brand drugs increased 26.4 percent for that same time
period whereas prices for generic drugs increased 8.3 percent. We need
to make sure that Medicare has every weapon in its arsenal to assure
seniors and Medicare get the best deal possible on prescription drug
prices.
One of the most important tools for Medicare to use to assure better
prescription drug prices for seniors is bargaining power. That tool is
missing from the legislation Congress passed in 2003. The legislation
that Senator Snowe and I are introducing today, the MEND Act, would
provide the Secretary of Health and Human Services that tool. As
responsible stewards of the taxpayers' money, Congress must provide
Medicare all the tools, including bargaining power, in its cost
containment arsenal.
This concept was endorsed by the outgoing Secretary of Health and
Human Services, Tommy Thompson. The Congressional Budget Office in a
letter to me last March stated that striking the so-called ``non
interference'' provision in the Medicare Prescription Drug Improvement
and Modernization Act could provide opportunities for savings.
In addition to providing the Secretary with bargaining power, the
MEND Act will require the Secretary to negotiate on behalf of what are
known as ``fall back'' plans, those plans that are provided when there
is no choice of a drug plan and the company administering the benefit
is not at risk. In addition, if any plan asks the Secretary for
assistance in negotiations for any covered drug, the Secretary must
assist the plan. Lower drug prices should mean lower premiums; lower
out of pocket costs and a better benefit.
America's seniors are savvy and they will shop around for a plan that
is going to provide them the best deal on prescriptions. That is why
the MEND Act also requires Medicare to provide a comparison of how much
a plan is saving seniors on the cost of the most commonly used drugs.
Giving seniors more control over their health care and health care
dollars will also help keep costs down.
Mrs. FEINSTEIN. Mr. President, I rise today to join my colleagues
Senator Snowe, Senator Wyden and Senator McCain in introducing the
bipartisan Medicare Enhancement for Needed Drugs, MEND, Act of 2005.
This legislation is an important step toward controlling the spiraling
cost of prescription drugs for America's seniors.
The MEND Act addresses what I saw as a major weakness of the Medicare
Modernization Act of 2003 when I voted for the bill. The Medicare
Modernization Act offers an opportunity for the Federal Government via
the Secretary of Health and Human Services to harness its bulk
purchasing power to deliver lower drug prices for our seniors.
[[Page S747]]
However, the Medicare bill prohibits the HHS Secretary from doing
just that.
I have said several times that I would work to see that this
prohibition on the HHS Secretary from negotiating with drug
manufacturers be stricken and I was pleased that Secretary Tommy
Thompson, upon announcing his departure as HHS Secretary, acknowledged
publicly that he sought the negotiating power that this legislation
provides. Secretary Thompson said, ``I would have liked to have had the
opportunity to negotiate.''
First and foremost the bill strikes the prohibition language in the
Medicare bill, also called the noninterference provision.
I strongly believe that the HHS Secretary should be given the
authority similar to that of other Federal entities that purchase
prescription drugs in bulk to negotiate prices with manufacturers of
prescription drugs to ensure that beneficiaries pay the lowest possible
price for their prescription drug plans.
The CBO has told us that the effect of striking the
``noninterference'' provision would have a ``negligible effect'' on
federal spending. CBO's conclusion is based on their prediction that
private plans will be able to obtain savings that will be greater than
what the Secretary will be able to achieve and that simply striking
this provision does not ensure that the Secretary will use the
negotiation authority.
Meanwhile, our seniors are being given no guarantee that private plan
competition will mean lower drug prices for them. So while CBO makes
this conclusion that private market forces will bring about savings,
the federal government is forced to sit on the sidelines, unable to
leverage its purchasing power to negotiate lower drug prices. The
Federal Government cannot even participate in negotiations for
prescription drug plans for which it assumes the risk.
That is simply wrong and the MEND Act corrects this flaw in the
Medicare bill.
Second, if a future HHS Secretary does not agree with Secretary
Thompson's view that he be given the opportunity to negotiate with drug
manufacturers, there must be circumstances under which the Secretary is
required by law to negotiate.
The MEND Act mandates two scenarios under which the Secretary must
negotiate with manufacturers. First, the Secretary must negotiate with
manufacturers of covered Part D drugs for the fallback prescription
drug plan.
The ``fallback'' plan is a guaranteed drug benefit to beneficiaries
living in areas where only one private plan, or none, shows up. In
areas where a ``fallback'' prescription drug plan is triggered, the
federal government must offer the standard drug benefit and assume
performance risk. However, the Federal Government does not have a say
in the prices manufacturers charge them in the ``fallback.''
To ensure that the Federal Government achieves the lowest available
price for enrollees in a ``fallback'' plan, the MEND Act requires that
the Secretary negotiate drug prices in such plans.
The MEND Act also requires the Secretary to participate in
negotiations upon the request of an approved prescription drug plan or
Medicare Advantage prescription drug plan.
If the untested theory that private plans can achieve larger drug
price discounts than the Secretary could negotiate proves to be false
because the smaller insurers in the private market cannot achieve the
savings larger, more established companies can, a company can petition
the Secretary to negotiate with drug manufacturers on their behalf.
So that seniors can make an ``apples to apples'' comparison when
determining which drug plan offers them the most competitive drug
prices, the bill requires that the Secretary of HHS determine the
average aggregate beneficiary costs and savings basic prescription drug
plans are able to achieve to better inform seniors about which plan
might suit them best.
I have heard concerns raised by many of my constituents about the
impact the Medicare bill will have on their Medigap plans. This bill
directs the HHS Secretary to work with the National Association of
Insurance Commissioners to conduct a review of the changes to the
Medigap policies in the new drug benefit for the purpose of evaluating
its impact on Medicare beneficiaries.
Lastly, the bill requires GAO to conduct a review of the retail cost
of prescription drugs in the U.S. during 2000 through 2003 with an
emphasis on the prescription drugs most utilized for individuals age 65
or older. Subsequent reviews will be required annually through 2007.
And, it requires GAO to conduct an annual study that compares the
average retail cost in the U.S. for each of the 20 most utilized
prescription drugs for individuals 65 or older with the average price
at which private health plans acquire each such drug, the average price
at which the Department of Defense and Veterans Administration each
acquire such drug, and the average negotiated price for each such drug
that eligible beneficiaries enrolled in a prescription drug plan under
Part D of Medicare pay.
As someone who voted for the Medicare bill and has seen the cost
estimate of that bill go from $400 billion to $534 billion and someone
who is very concerned about the growth of entitlement spending, I
believe that this bill will shed light on one of the big drivers of
health care costs, the cost of prescription drugs.
CBO projects that Americans over 65 will spend $1.8 trillion on
prescription drugs over the next ten years. Recent studies of U.S. and
Canadian drug-price comparisons show that, on average, prices charged
by manufacturers, wholesalers, and retailers were higher in the U.S.,
most recently by about 70 percent.
For example, an American consumer pays $62.99 for a 30-day supply of
the popular cholesterol-lowering drug Lipitor. The same consumer in
Canada is paying $35.42. For Prevacid, used to treat acid reflux, an
American consumer pays $120.99 for a 30-day supply whereas a Canadian
consumer pays $44.27.
If we do not address the exorbitant costs of prescription drugs in
this country today, we threaten the viability of programs like Medicare
for future generations. I am pleased to join Senators Snowe, Wyden and
McCain in the fight for lower prescription drug prices for our seniors.
I urge my colleagues to join me in supporting this important
legislation.
______
By Mr. KERRY (for himself, Mr. Leahy, Mrs. Murray, Mr.
Rockefeller, Mr. Durbin, and Ms. Stabenow):
S. 240. A bill to mend the Internal Revenue Code of 1986 to allow
small business employers a credit against income tax with respect to
employees who participate in the military reserve components and are
called to active duty and with respect to replacement employees and to
allow a comparable credit for activated military reservists who are
self-employed, and for other purposes; to the Committee on Finance.
Mr. KERRY. Mr. President, the continuing activation of military
reservists to serve in Iraq and the war on terror has imposed a
tremendous burden on many of our country's small businesses, their
employees and their employees' families. Too many small businesses,
when their employees are asked to leave their jobs and serve the
Nation, are unable to continue operating successfully and face severe
financial difficulties, even bankruptcy. At the same time, more than 40
percent of military reservists and National Guard members suffer a pay
cut when they're called to defend our Nation. Most large businesses
have the resources to provide supplemental income to resist employees
called up for active duty and to replace them with a temporary
employee. However, too many small businesses are unable to provide this
assistance (or temporarily replace the employee called up to active
duty. I believe the Federal Government must take action to help small
businesses weather the loss of an employee to active duty and protect
small business employees and their families from suffering unnecessary
financial hardship to serve our Nation. That is why I am again
introducing legislation that will provide an immediate tax credit
assist both military reservists who are called to active duty and the
small businesses who must endure their absence.
The Small Business Military Reservist Tax Credit Act that I am
introducing today will provide immediate
[[Page S748]]
help to affected small businesses through a Federal income tax credit
and a reduced withholding requirement to help pay the difference in
salary for a reservist called up to active duty and the cost of
temporarily replacing that employee while he or she is serving our
Nation. Specifically, the bill will provide a tax credit of up to
$21,000 to any very small business, defined as any business with up to
50 employees, whose employee has been called up for active duty. Up to
$15,000 for businesses that pay any difference in salary for the
activated reservist and up to an additional $6,000 for the business to
offset the cost of hiring a temporary replacement. For small
manufacturers with up to 100 employees, the bill will provide a tax
credit of up to $30,000, up to $20,000 for small manufacturers that pay
all or part of the difference in salary for the reservist called to
duty and up to $10,000 for small manufacturers to offset the cost of
hiring a temporary replacement. This tax credit is critically necessary
if we are to immediately help struggling entrepreneurs keep their small
businesses running after the loss of an employee to temporary military
service. Too many American small manufacturers are already facing a
difficult economy and strong international competition. This
legislation provides higher thresholds for small manufacturers because
they need greater help and they employ more technical workers who
typically command higher salaries and are more difficult to replace. It
will also help cushion the financial cost of being a citizen solder for
our reservists.
To fight our wars and to meet our military responsibilities, the
United States supplements its regular, standing military with
reservists, citizen soldiers who serve nobly. Since 1973, the United
States has built an all-volunteer military of which reservists are an
essential part. Our reservists are much more than weekend warriors.
When they are called to active duty, they are an essential ingredient
of any long-term or significant deployment of American forces. Everyone
knows the contributions our reservists have made in the Army, Navy, Air
Force, Marines and Coast Guard. They have been serving our country with
distinction and pride for many years and should not be penalized
financially for their honorable service. The use of reservists is a
significant way to reduce the costs of maintaining a standing army, and
those costs, in lieu of having a critical reservist component, are far
higher than the cost of providing the small, targeted tax credit
offered by this legislation.
Reservists have become a vital component of U.S. forces in Iraq and
the war on terror. On September 14, 2001, President Bush issued
Executive Order 13223 authorizing the activation of up to 1 million
military reservists for up to 2 years of active duty. Since October
2002, there has been a presidentially approved ceiling of 300,000 on
the number of reservists that can be on duty at anyone time. Some
475,000 reserves have been called up cumulatively since the issuance of
the original Executive Order. Today, there are about 193,458 reserves
on active duty in the war against terrorism. Of the approximately
150,000 troops serving in Iraq, 40 percent are reserves. This number is
expected to increase to approximately 50 percent in the near future as
current troop deployments mobilize.
Earlier this month, published reports showed that Lt. Gen. James R.
Helmly, the Commander of the Reserve, has told Army Chief of Staff
General Peter J. Schoomaker that the burdens placed on military
reservists since the September 11, 2001 attacks, combined with
dysfunctional Pentagon policies, have damaged morale and retention and
threaten to turn the Army Reserve into a broken force. Lt. Gen. Helmly
criticized Pentagon decisions to extend reservists tours in war zones,
giving troops as little as 3 days' notice before mobilizations, and
calling reservists to active duty after they had served and returned to
civilian life. Such policies have strained the Army Reserve to the
point that the 200,000 force could be unable to carry out future
missions.
Both the Army Reserve and National Guard have suffered shortfalls in
recruitment because of the unpredictability, extended call-ups and stop
loss policies associated with the Iraq war. National Guard officials
said last month that the service must be overhauled.
Everyone knows that small businesses continue to be a most effective
at creating new jobs and spurring economic growth nationwide. Small
businesses employ over 50 percent of the nation's workforce.
Nationwide, small businesses are currently creating 75 percent of new
jobs. Furthermore, many of these small businesses provide quality goods
and services that are a vital link in the supply chain for our national
defense. Many of these small companies need immediate help to keep
their business going while their employees are sacrificing for our
country in Iraq and elsewhere.
Many of our reservists left their companies in good shape. They were
profitable, providing goods or services, creating jobs, adding to the
tax base. Our Nation should do everything possible to ensure that upon
their return, reservists and their businesses do not suffer unnecessary
hardships, which range from impaired operations and financial ruin to
deserted clients, layoffs, and even closure. Pedro Sotelo, a 33-year-
old veteran from Kansas City, MO, was a reservist for 9 years. From
1997 to 2004 he was called up to active duty 10 times. Each time he was
activated, he saw his income drop from $60,000 a year as a small
business sheet metal worker to about $30,000 the Army paid him as a
staff sergeant. While he was away serving his country, the bills would
just keep pilling up. Eventually his credit rating plummeted. The
continual financial strain contributed to the end of his first
marriage, and after 9 years of service, Mr. Sotelo left the military to
take a job selling cars. He is still recovering from the financial ruin
created by his service, but I am happy to say that Mr. Sotelo has
remarried and was recently promoted to manager at his dealership. Had
the bill I introduce today been available for Staff Sergeant Sotelo,
his small business employer could have kept his income steady and
received a tax credit to cover half of the costs of doing so.
Beyond the hardship of leaving their families, their homes and their
regular employment, 41 percent of military reservists and National
Guard members, like Staff Sergeant Sotelo, face a pay cut when they're
called for active duty in our armed forces. Many of these reservists
have families who depend upon that paycheck to survive and can least
afford a substantial reduction in pay. Unlike many big businesses that
can afford to provide supplemental income to make up for the salary
disparity for military reservists called to active duty, most small
businesses cannot afford to provide this benefit. This makes it more
difficult for small businesses to attract and keep workers. I think it
is imperative that we help families of reservists maintain their
standard of living while their loved one serves our Nation. We must
ensure that our great tradition of citizen soldiers does not fade or
stop because of the effect service has on work and family.
Back in 1999, I wrote the Military Reservist Small Business Relief
Act, which was enacted into law during the 106th Congress and
authorized the Small Business Administration (SBA) to defer existing
loan repayments and to reduce the interest rates on direct loans that
may be outstanding, including disaster loans, for small businesses that
have had a military reservist called up for active duty. It also
established a low-interest economic injury loan program administered by
the SBA through its disaster loan program. These loans have been
available to provide interim operating capital to any small business
when the departure of a military reservist for active duty causes
economic injury. However, in today's economy, many small businesses are
unable to take on additional debt to continue their operations. These
small businesses need immediate tax relief to assist them in hiring a
replacement and to pay their reservist worker who is away serving our
country.
This bill will help every small business whose owner, manager or
employee is called to active duty. Most immediately, this bill will
assist those small businesses whose employees are in service in Iraq
and elsewhere but the act also applies to future contingency
operations, military conflicts, or national emergencies.
By helping our reservists and the small businesses that employ them,
we can ensure that our great tradition of
[[Page S749]]
citizen soldiers does not fade or stop because of the effect service
has on work and family.
I ask all my colleagues to support this important legislation to help
both military reservists and the small businesses they are forced to
leave when they are called up for active duty.
______
By Ms. SNOWE (for herself, Mr. Rockefeller, Mr. Stevens, and Mr.
Inouye):
S. 241. A bill to amend section 254 of the Communications Act of 1934
to provide that funds received as universal service contributions and
the universal service support programs established pursuant to that
section are not subject to certain provisions of title 31, United
States Code, commonly known as the Antideficiency Act; to the Committee
on Commerce, Science, and Transportation.
Ms. SNOWE. Mr. President, I rise today along with Senator Rockefeller
and the distinguished Chairman and Ranking Member of the Committee on
Commerce, Science, and Transportation, Senators Stevens and Inouye, to
introduce legislation to safeguard the Universal Service Fund, or
``USF,'' the institution that allows rural and low-income Americans to
obtain affordable telephone service, allows America's schools and
libraries to provide Internet access to all segments of society through
the E-Rate program, and permits rural health care providers to obtain
telecommunications and Internet services at reduced rates. The concept
of Universal Service has been with us nearly as long as the telephone
itself, and this bill today marks one key step in ensuring that this
vital policy remains intact in the 21st Century.
The legislation introduced today pertains specifically to the
Universal Service Administration Company, or ``USAC,'' the private,
nonprofit corporation that Congress created to administer the USF. This
bill is very similar to S. 2994, a Universal Service bill that I
introduced during the last session of Congress and that was passed
right before adjournment as part of a larger telecommunications
package, H.R. 5419. That bill temporarily exempted USAC from complying
with new, arbitrarily-imposed accounting rules that had severely
disrupted the E-Rate program and threatened to cause huge spikes in
consumers' telephone bills. Many will recall that hundreds of millions
of dollars in E-Rate funding for schools and libraries stayed unissued
for months because of the accounting rule change, and immediate action
was necessary to resolve the problem.
According to USAC's Federal regulators, these new accounting rules
needed to be imposed to ensure that the USF was compliant with the
federal Anti-Deficiency Act, a law which prevents government agencies
from incurring financial obligations beyond the amount that has been
appropriated to them by Congress. However, USAC, in administering the
USF, does not receive any appropriated funds from Congress. Rather, the
USF is funded by a regular disbursement, on a more-or-less monthly
basis, of monies derived from a surcharge placed on the revenue
generated from interstate telephone calls. The existence of this
predictable revenue stream negates any of the risks and concerns that
the Anti-Deficiency Act was designed to prevent.
After government accounting rules were imposed on USAC last summer,
the entire E-Rate program was frozen. On the eve of the start of the
school year, this program--which has enabled 93 percent of schools and
libraries in the country to hook up to the Internet--was unable to
review and act upon the funding recommendations of thousands of
applicants. Many recipients of E-Rate funding actually shut off their
Internet connections because they had no money available to maintain
service. In order to alleviate this problem, Congress decided last fall
to exempt the USF from the Anti-Deficiency Act for one year until a
permanent solution to this problem was found. Senator Rockefeller and I
decided to pursue a one-year exemption in order to ensure speedy
passage of the legislation before adjournment, so that schools and
libraries could receive their funding again. Today's legislation
provides that permanent solution: a permanent exemption from the Anti-
Deficiency Act.
Clear precedent exists for such an exemption. Numerous other federal
programs already are exempt from complying with the Anti-Deficiency
Act, including the National Park Service and the Conservation Trust.
Moreover, an exemption is the rational solution to ensure that this
problem does not continue to recur. As I previously mentioned, an
exemption is particularly appropriate in this instance because the USF
has a funding mechanism different from most federal programs. The USF
functioned very well for many years utilizing the Generally Accepted
Accounting Principles used by the entire American business world.
Trying to engraft special government rules onto USF is akin to forcing
a square peg into a round hole. And the result would be another
stoppage in E-Rate--and likely the USF Rural High Cost Fund as well--
and also a spike in the USF surcharge on consumers' telephone bills.
Finally, I want to ensure my colleagues that a permanent exemption
from the Anti-Deficiency Act poses no risk of increased fraud or abuse
in the E-Rate Program or in Universal Service as a whole. Some well-
publicized abuses of E-Rate did in fact occur, and I will fully support
efforts to stamp out such government waste. But the Federal
Communications Commission has repeatedly stated that there is
absolutely no connection between the Anti-Deficiency Act land the
ability of the Inspector General to effectively monitor the program to
stamp out waste, fraud, and abuse. As such, government waste cannot be
used as a valid reason for opposing this bill.
Last fall we undertook a bipartisan effort among Members on the
committees of jurisdiction in both Houses of Congress to enact a
temporary exemption for the USF from unnecessary, burdensome
regulations. In undertaking that effort we worked closely with the
Federal Communications Commission, and enjoyed widespread support among
the telecom industry, educators, and State and local governments. I am
grateful of the continuing bipartisan support of the Chairman and
Ranking Member, as well as of Senator Rockefeller, and it is my hope
that we can proceed in similar fashion to make this exemption
permanent.
______
By Mrs. HUTCHISON (for herself and Mr. Cornyn):
S. 242. A bill to establish 4 memorials to the Space Shuttle Columbia
in the State of Texas; to the Committee on Energy and Natural
Resources.
Mrs. HUTCHISON. Mr. President, today in honor of the memory and
sacrifice of seven astronauts whose lives were tragically cut short two
years ago in the destruction of the Space Shuttle Columbia, I bring to
the floor a bill to authorize the construction of several memorials in
communities along the Space Shuttle Columbia Recovery Corridor;
specifically, Lufkin, Hemphill, Nacogdoches, and San Augustine, TX.
Each of these communities will memorialize the disaster and the
indomitable spirit of adventure and courage, the spirit that defies
complacency and accepts challenge, the spirit that each of these
astronauts and each of these communities showed.
This search for adventure turned space travel from dreams to a
reality. It is this spirit of challenge which fueled the courage and
ambition of seven men and women into the sky on January 6, 2003. It is
also this same spirit that drives these communities to permanently
commemorate the high price we sometimes pay for reaching new horizons.
Hemphill, TX, where the nose cone of the Shuttle was found, is also
where the remains of the crew were recovered. The VFW post in Hemphill
fed thousands of volunteers for weeks without so much as a complaint or
a dime. The men and women of Hemphill did not take their task lightly,
but rather with a solemn grace and dignity.
The greatest amount of debris came down in the populated areas of
Nacogdoches, TX. Backyards and streets were littered with debris,
permanently altering the community. The citizens of Nacogdoches pulled
together and focused on the recovery, working day and night with NASA
until the job was complete. A spirit of courage filled the community of
Nacogdoches and their efforts should never be forgotten.
The population of Lufkin, TX doubled overnight as the retrieval
effort
[[Page S750]]
started. The community's residents welcomed thousands with hospitality
and made their civic center NASA's Columbia retrieval command center.
From combing the streets and fields for debris to making home cooked
meals for the recovery workers, the people of Lufkin mustered around
the Columbia tragedy.
The citizens of San Augustine, TX were a driving force behind the
recovery effort. Local elected officials and countless volunteers
opened their hearts and their homes to strangers also affected by the
tragedy. Searching the piney woods of deep east Texas on horseback and
walking the streets in search of shuttle fragments, the spirit of San
Augustine could not be crushed.
In recent years, America has experienced grief with the loss of many
heroes. But our collective loss with the Columbia tragedy still sears
our souls and the pain is never easy to bear. Today, two years after
they vanished into the deep blue skies of Texas, we pause to remember
and honor Rick Husband, Kalpana Chawla, Laurel Clark, Ilan Roman,
William McCool, David Brown, and Michael Anderson.
And though the families' losses cannot be diminished, their pain and
grief is shared around the world and our prayers are with them. This
bill will memorialize their sacrifice and will honor the courageous
spirit of the communities affected. Their sacrifices will never be
forgotten.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 242
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Columbia Space Shuttle
Memorials Act of 2005''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Memorial.--The term ``memorial'' means each of the
memorials to the Space Shuttle Columbia established by
section 3(a).
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the National
Park Service.
SEC. 3. MEMORIALS TO THE SPACE SHUTTLE COLUMBIA.
(a) Establishment.--There are established, as units of the
National Park System, 4 memorials to the Space Shuttle
Columbia to be located on the 4 parcels of land in the State
of Texas described in subsection (b) on which large debris
from the Space Shuttle Columbia was recovered.
(b) Description of Land.--The parcels of land referred to
in subsection (a) are--
(1) the parcel of land owned by the Fredonia Corporation,
located at the southeast corner of the intersection of East
Hospital Street and North Fredonia Street, Nacogdoches,
Texas;
(2) the parcel of land owned by Temple Inland Inc., 10
acres of a 61-acre tract bounded by State Highway 83 and
Bayou Bend Road, Hemphill, Texas;
(3) the parcel of land owned by the city of Lufkin, Texas,
located at City Hall Park, 301 Charlton Street, Lufkin,
Texas; and
(4) the parcel of land owned by San Augustine County,
Texas, located at 1109 Oaklawn Street, San Augustine, Texas.
(c) Administration.--The memorials shall be administered by
the Secretary.
(d) Additional Sites.--The Secretary may recommend to
Congress additional sites in the State of Texas related to
the Space Shuttle Columbia for establishment as memorials to
the Space Shuttle Columbia.
______
By Mr. THOMAS:
S. 243. A bill to establish a program and criteria for National
Heritage Areas in the United States, and for other purposes; to the
Committee on Energy and Natural Resources.
Mr. THOMAS. Mr. President, I rise today to introduce the ``National
Heritage Partnership Act,'' a bill to establish a program and criteria
for National Heritage Areas in the United States.
Twenty-seven National Heritage Areas currently exist in this country,
including 4 new areas designated in appropriations bills by the 108th
Congress. Six occur in the State of Pennsylvania alone. They range in
size from a 10-mile canal in Augusta, GA, to the entire State of
Tennessee. Specific areas are designated to recognize and preserve the
cultural heritage of the oil industry, coal mining, the evolution of
manned flight, and the Civil War, just to name a few. The National Park
Service has responsibility for advising heritage area managers and
providing Federal funds, but a formal process and criteria for
designating new areas do not exist.
State delegations are planning to introduce legislation to designate
13 new National Heritage Areas and authorize studies on an additional
5. Hundreds of State heritage areas currently exist and all could
potentially become National Heritage Areas under the current process.
This program is out of control. We are continuing to put unnecessary
fiscal and resource demands on the National Park Service at a time when
a significant maintenance backlog exists in park units throughout the
Nation. We have no established criteria to ensure the recognition of
truly nationally important areas.
During the 108th Congress, the National Parks Subcommittee conducted
two hearings on heritage areas and received a review from the General
Accounting Office. My legislation combines the recommendations of the
National Park Service, General Accounting Office, and witness testimony
by establishing criteria such as national importance, creating a
process for studying and reviewing new areas, requiring fiscal
accountability and protecting the rights of property owners.
This legislation is overdue. It provides a balanced approach to
National Heritage Area designation, management, and oversight.
______
By Ms. COLLINS (for herself, Ms. Cantwell, Ms. Snowe, Mrs.
Murray, Mr. Jeffords, and Mr. DeWine):
S. 245. A bill to provide for the development and coordination of a
comprehensive and integrated United States research program that
assists the people of the United States and the world to understand,
assess, and predict human-induced and natural processes of abrupt
climate change; to the Committee on Commerce, Science, and
Transportation.
Ms. COLLINS. Mr. President, I rise to introduce the Abrupt Climate
Change Research Act of 2005. This bill would authorize $10 million per
year for the next six years for the National Oceanic and Atmospheric
Administration, in partnership with universities across the Nation, to
conduct research on abrupt climate change.
The subject of climate change remains controversial. Nevertheless, I
believe there is one issue on which almost everyone can agree: A great
deal more scientific research is necessary in order to better
understand the potential risk of abrupt climate change.
Understanding and predicting climate change are enormous scientific
challenges. The challenges are made even more difficult with the
recognition that the climate system is capable of dramatic and abrupt
changes. Scientists have determined that past global temperatures have
swung as much as 20 deg. F within a decade, accompanied by drought in
some places and catastrophic floods in other places. An abrupt climate
change triggered by the ongoing buildup of greenhouse gases in the
atmosphere would also likely result in the redistribution of
atmospheric moisture and rainfall, with substantial impact on the
world's food supplies. Unfortunately, we have no satisfactory
understanding of what triggers abrupt climate changes.
Both the National Academy of Sciences and the Administration's
Strategic Climate Change Science Plan identify abrupt climate change as
a key priority for additional research. In a 2002 report, the National
Academy of Sciences stated that ``Large, abrupt climate changes have
repeatedly affected much or all of the Earth.'' Furthermore, the report
stated that ``abrupt climate changes are not only possible but likely
in the future, potentially with large impacts on ecosystems and
societies.'' The report noted that we're not doing nearly enough to
identify even the threat of abrupt climate change. My bill would lay
the framework and provide the funds for the United States to understand
and address abrupt climate change.
One reason this funding is so urgent is that we're rapidly losing one
of the greatest sources of information: Ice cores from glaciers. The
University of Maine's Climate Change Institute has one of the best
abrupt climate change research programs in the world. The Climate
Change Institute uses ice cores from glaciers and ice sheets around the
world to make discoveries that change the way we think about climate
change. Unfortunately, numerous glaciers around the world are melting;
and
[[Page S751]]
when they go, we lose the very record that has given us so much of this
critical climatic history.
I recently had the opportunity to see for myself how scientists are
able to use glaciers and ice sheets to understand climate change. In
August, I traveled with Senators McCain, Sununu, and others to the
northernmost community in the world. We visited Ny-Alesund on the
Norwegian island of Spitsbergen. Located at 79 degrees north, Ny-
Alesund lies well north of the Arctic Circle and is much closer to the
North Pole than to Oslo, the country's capital. It has even served as a
starting point for several polar expeditions, although thankfully,
Senator McCain did not include an attempt to reach the North Pole on
our itinerary.
The scientists we met with told us that the global climate is
changing more rapidly now than at any time since the beginning of
civilization. They further state that the region of the globe changing
most rapidly is the Arctic. The changes are remarkable and disturbing.
In the last 30 years, the Arctic has lost sea-ice cover over an area
10 times as large as the State of Maine. In the summer, the change is
even more dramatic, with twice as much ice loss. The ice that remains
is as much as 40 percent thinner than it was just a few decades ago. In
addition to disappearing sea-ice, Arctic glaciers are also rapidly
retreating. In Ny-Alesund, Senator McCain and I witnessed massive
blocks of ice falling off glaciers that had already retreated well back
from the shores where they once rested.
The melting of glaciers and sea ice, the thawing of permafrost, and
the increases in sea levels resulting from warming are already
beginning to cause environmental, social, and economic changes. Indeed,
the social and economic disruption resulting from climate change is
already evident in a number of regions throughout the Arctic, including
Alaska. Some coastal communities in Alaska are facing increased
exposure to storms and coastal erosion as a reduction in sea ice allows
higher waves and storm surges to reach shore. In other areas, thawing
ground is disrupting transportation, buildings, and other
infrastructure. Some indigenous communities are already facing the
prospect of relocating. If these changes were to be compounded with an
abrupt climate change on the scale seen in our climatic history, the
result could be devastating.
I know that my colleague, the chairman of the Commerce Committee and
senior Senator from Alaska, is very concerned about how Arctic climate
changes are affecting his State. I know he recognizes that more
research funding is necessary in order to understand future climate
changes. I look forward to working with Chairman Stevens, Ranking
Member Inouye, and other members of the Commerce Committee to address
this extremely important issue in the 109th Congress.
I am grateful to my cosponsors, Senators Cantwell, Snowe, Murray,
Jeffords, and DeWine. I look forward to working with all of my
colleagues over the coming months in order to address this important
issue.
Ms. SNOWE. Mr. President, I rise today to cosponsor the Abrupt
Climate Change Research Act of 2005, legislation which will address the
critical, comprehensive and integrated research needed for abrupt
climate change. In the 108th, this legislation was passed by the Senate
Commerce Committee. Its merits are just as pressing, if not more
critical, for the 109th Congress as the legislation calls for
developing and coordinating a research program over 6 years aimed at
understanding, assessing, and predicting both human-induced and natural
processes of abrupt climate change.
The abrupt climate change research issue is one that the Maine Senate
delegation has been working on for the past 3\1/2\ years, the genesis
of which goes back to a Climate Change Conference in Maine in October
2001, which was attended by a wide array of stakeholders in the State
who have been active in climate change issues for a number of years.
I believe we all ought to be concerned by the picture scientific
research is painting, which points to the reality and potential impact
of abrupt shifts in climate. The December 2001 National Academy of
Sciences report documented a growing body of scientific evidence that
suggests our global climate can swing abruptly, not gradually over
time. Moreover, such sudden jumps, and I quote from the Academies'
report, ``are not only possible but likely in the future.''
Rather than dismiss this, as some have, as the ``science de jour'' I
prefer to take this as a serious warning, based on the best available
evidence and analysis. The risk of complacency is to gamble immense
environmental and societal consequences. That's why the NAS report
urged that a new research program be initiated to examine the potential
impact of a sudden change in climate in response to global warming. And
that's also why, back in May of 2002, when NOAA's Admiral Lautenbacher
was before the Commerce Committee testifying on NOAA's FY 2003 Budget,
I raised the need for abrupt climate change studies, and the Admiral
agreed this is a pressing priority. Since the introduction of the
research bill in the 108th Congress, NOAA, in a January 15, 2004
report, stated that calendar year 2003 tied 2002 as the 2nd warmest
year on record.
Mr. President, as co-chair of the independent International Climate
Change Taskforce, I was pleased to disseminate to my colleagues the
recently published Taskforce report, ``Meeting the Climate Challenge.''
The ICCT includes leaders from public service, science, business and
civil society, from both developed and developing countries. Our goal
was to find common ground through recommendations that could be helpful
to all governments and policymakers worldwide for developing solutions
to address climate change.
Indeed, our first recommendation calls for a long-term objective to
prevent global average temperature from rising more than 2 degrees
Centigrade, or 3.6 degrees Fahrenheit, above the pre-industrial level
by 2100. This target would limit the extent and magnitude of the
impacts of climate change if all countries take various actions. I will
ask unanimous consent to submit the ICCT's ten recommendations for the
Record. In the upcoming weeks and months, I will be introducing
legislation that reflects these public policy recommendations.
The temperature goal is crucial to the debate on abrupt climate
change because, if the earth goes beyond the 2 degree C level,
scientists have suggested that risks to both ecosystems and humans
increase significantly. As the risks of accelerated or--as our report
stated--``runaway'' climate change increases, a ``tipping point'' could
be reached that would include the loss of the West Antarctic and
Greenland ice sheets, leading to the rise of sea levels.
On this score, abrupt and paleoclimate research can greatly enhance
the evolving body of scientific evidence, and that is why Senator
Lautenberg and I spearheaded the effort last year to restore the FY2005
National Oceanic and Atmospheric Administration, NOAA, research
programs that will enable us to examine past climate change patterns.
This information will guide the development of future models to assist
both scientists and policymakers to improve their understanding of
climate change through, for instance, the CORC-ARCHES program and
paleo-
climate research. The University of Maine, under the direction of Dr.
George Denton, has been part of the decades-long consortium that has
been studying deep ocean currents in the Weddell Sea in Antarctica, and
ice core samples from northern latitudes, which is helping scientists
command a greater understanding of abrupt climate change.
There have also been other, newer scientific reports that should give
us great pause. Among those reports, the Arctic Climate Impact
Assessment states, ``Arctic average temperature has risen at almost
twice the rate as the rest of the world in the past few decades.
Widespread melting of glaciers and sea ice and rising permafrost
temperatures present additional evidence of strong arctic warming.
These changes in the Arctic provide an early indication of the
environmental and societal significance of global warming.''
There is scientific observational evidence that indicates that
regional changes in climate, particularly increases in temperature, are
already affecting a diverse set of physical and biological systems in
many parts of the
[[Page S752]]
world. Off the coast of Canada lies a 150-square mile, 100-foot thick
mass of ice that has existed on the coast for 3,000 years, but it is
now disintegrating. That melting has been accelerating over the past 2
years. In addition, coral reefs, an irreplaceable marine resource
around the world, are under tremendous stress as coral bleaching is
induced by high water temperatures. Indeed, there are reports of a
massive region-wide decline of coral which supports a huge variety of
sea life across the entire Caribbean Basin.
As we turn to the future, we should harbor no illusions that we are
looking at a timetable measured in epochs. We are talking about tens of
thousands of years. To the contrary, observed changes tell us that the
snows of Kilimanjaro could vanish in 15 years, the glaciers in the
Bolivian Andes that once appeared indestructible may disappear in
another 10 years, and in Alaska, where the average temperature has
risen almost 5 and one half degrees over the past 30 years, there is
evidence of melting permafrost and dying forests.
So my question is, what are we waiting for? Is this the kind of
legacy we want to leave to future generations and the next millennium?
Why not apply now the lessons of the past and present?
Indeed, if ``past is prologue,'' and I believe it is, this bill will
improve our understanding of climate change by calling for research to
bolster existing, global records of past abrupt climate change, through
the study of ice cores, for instance. In this manner we can improve
scientific understanding of the mechanisms of abrupt climate change,
and incorporate this knowledge into current scientific models. Even for
those who question prevailing scientific opinion on the climate change
issue, this bill should hold the appeal of increasing our stock of
knowledge, wherever it may lead.
In the final analysis, we need to carry out research that will allow
us to gauge climate change secrets of the past, so we in turn might
develop future models that will assist both scientists and policymakers
in understanding climate change. The reality is, there is no doubt our
global climate has changed in the past. There should similarly be no
question that it would be beneficial to understand the manner in which
that change has occurred and why, and so I urge my colleague's support
for this legislation, and will work for its passage out of the Commerce
Committee and to the Senate floor.
I ask unanimous consent that the Summary of Main Recommendations be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Summary of Main Recommendations
1. A long-term objective be established to prevent global
average temperature from rising more than 2 deg.C (3.6 deg.F)
above the pre-
industrial level, to limit the extent and magnitude of
climate-change impacts.
2. A global framework be adopted that builds on the UNFCCC
and the Kyoto Protocol, and enables all countries to be part
of concerted action on climate change at the global level in
the post-2012 period, on the basis of equity and common but
differentiated responsibilities.
3. G8 governments establish national renewable portfolio
standards to generate at least 25% of electricity from
renewable energy sources by 2025, with higher targets needed
for some G8 governments.
4. G8 governments increase their spending on research,
development, and demonstration of advanced technologies for
energy-efficient and low- and zero-carbon energy supply by
two-fold or more by 2010, at the same time as adopting near-
term strategies for the large-scale deployment of existing
low- and no-carbon technologies.
5. The G8 and other major economies, including from the
developing world, form a G8+ Climate Group, to pursue
technology agreements and related initiatives that will lead
to large emissions reductions.
6. The G8+ Climate Group agree to shift their agricultural
subsidies from food crops to biofuels, especially those
derived from cellulosic materials, while implementing
appropriate safeguards to ensure sustainable farming methods
are encouraged, culturally and ecologically sensitive land
preserved, and biodiversity protected.
7. All developed countries introduce national mandatory
cap-and-trade systems for carbon emissions, and construct
them to allow for their future integration into a single
global market.
8. Governments remove barriers to and increase investment
in renewable energy and energy efficient technologies and
practices through such measures as the phase-out of fossil
fuel subsidies and requiring Export Credit Agencies and
Multilateral Development Banks to adopt minimum efficiency or
carbon intensity standards for projects they support.
9. Developed countries honour existing commitments to
provide greater financial and technical assistance to help
vulnerable countries adapt to climate change, including the
commitments made at the seventh conference of the parties to
the UNFCCC in 2001, and pursue the establishment of an
international compensation fund to support disaster
mitigation and preparedness.
10. Governments committed to action on climate change raise
public awareness of the problem and build public support for
climate policies by pledging to provide substantial long-term
investment in effective climate communication activities.
______
By Mr. BUNNING (for himself, Mr. Nelson of Nebraska, Mr. DeMint,
Mr. Craig, Mr. Inhofe, Mr. Brownback, Mr. Lugar, Mr. Santorum,
Mr. Coleman, and Mr. Domenici):
S. 246. A bill to repeal the sunset of the Economic Growth and Tax
Relief Reconciliation Act of 2001 with respect to the expansion of the
adoption credit and adoption assistance programs; to the Committee on
Finance.
Mr. BUNNING. Mr. President, I rise today to introduce the Adoption
Tax Relief Guarantee Act of 2005. This legislation will help American
families break the financial barriers to successfully adopting a child,
especially those children with special needs who cannot take care of
themselves. By helping to ease this financial burden, we can encourage
the development of more stable families and provide a brighter future
for thousands of children.
These important goals prompted us to act 4 years ago, when we passed
adoption tax incentives in the 2001 tax bill. However, they are set to
sunset and will expire on December 31, 2010. I believe it is essential
that we support the American family and extend these provisions.
This bill repeals the sunset for adoption tax credits. Specifically,
this will allow those Americans who adopt a child to continue to
receive a credit in the amount of their qualified expenses and
guarantees the maximum $10,000 credit for those who adopt children with
special needs. If we fail to act, these credits would revert to $5,000.
This legislation also continues the expanded eligibility for adoption
assistance programs for those earning up to $150,000, rather than
allowing it to fall back to $75,000.
I am pleased that a bipartisan group of Senators has cosponsored this
legislation, and that it has been endorsed by the National Council for
Adoption. Those children without parents and those parents without
children need our help to bring them together. We owe it to them to act
now.
______
By Mr. DeMINT:
S. 248. A bill to amend title 23, United States Code, to permit
States to carry out surface transportation program projects on local
roads to address safety concerns; to the Committee on Environment and
Public Works.
Mr. DeMINT. Mr. President, each State has unique road needs and
different transportation priorities. In order to more effectively
leverage limited dollars, State transportation agencies need increased
flexibility to use Federal funds for projects identified as safety
concerns.
Currently, when an urgent need arises, a State must apply to the
Secretary of Transportation for a waiver and fill out mountains of
paperwork in order to transfer funds to critical priorities. We need to
empower States to make their own decisions when it comes to meeting
their most urgent safety needs.
Today, I introduce legislation called the Surface Transportation
Adaptability to Ensure Safety Act or ``STATES Act,'' which allows
States to undertake a surface transportation project on any State-
maintained public road if the State determines that the project is
necessary to address high fatality rates or other safety concerns.
This bill empowers States, such as South Carolina, to respond to
serious needs quickly, while also allowing them to make the most
efficient use of the transportation dollars they receive. Under this
legislation, a State can decide to use its Surface Transportation
Program funding on a road functionally classified as a rural or minor
collector without getting permission from Washington.
[[Page S753]]
No red tape. No Federal bureaucracy. Just a decision made at the
local level by the people with the best understanding of the situation.
It is time to bring safety decisions down to the local level and give
each State the discretion to allocate funds to the most pressing safety
concerns in its highway program.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 248
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Surface Transportation
Adaptability to Ensure Safety (STATES) Act of 2005''.
SEC. 2. LOCATION OF SURFACE TRANSPORTATION PROGRAM PROJECTS.
Section 133(c) of title 23, United States Code, is
amended--
(1) by striking ``Except'' and inserting the following:
``(1) In general.--Except''; and
(2) by adding at the end the following:
``(2) Safety projects.--Notwithstanding paragraph (1), a
State may undertake a surface transportation program project
on any State-maintained public road, including a road
functionally classified as a local or rural minor collector,
if the State determines that the project is necessary to
address high fatality rates or other safety concerns.''.
______
By Mr. REID (for himself, Mr. Ensign, and Mr. Bennett):
S. 249. A bill to establish the Great Basin National Heritage Route
in the States of Nevada and Utah; to the Committee on Energy and
Natural Resources.
Mr. REID. Mr. President, I rise today for myself, Senator Ensign and
Senator Bennett to introduce this bill, which will establish a National
Heritage Route in eastern Nevada and western Utah.
National Heritage areas, corridors, and routes are designated regions
in which residents and businesses, as well as local and tribal
governments join together in partnership to conserve and celebrate
cultural heritage and special landscapes. The Great Basin National
Heritage Route includes historic mining camps and ghost towns, Mormon
and other pioneer settlements, as well as Native American communities.
The Route passes through classic Great Basin country along the trails
of the Pony Express and the Overland Stage. Cultural resources within
the route include highly valued Native American archaeological sites
dating back to the Fremont Culture.
The creation of this Heritage Route will bring much deserved
attention to the Great Basin's natural wonders. Passing through Millard
County, UT, and parts of the Duckwater Reservation and White Pine
County in Nevada, the Route contains items of great biological and
geological interest. In Nevada, it encompasses forests of bristlecone
pine, the oldest living things on the earth. In Utah, the Route
includes native Bonneville cutthroat trout as well as other distinctive
species and ecological communities.
Designation of the corridor as a Heritage Route will also ensure
long-term protection of key educational and recreational opportunities
without compromising traditional local use of the land. The Great Basin
National Heritage Route will provide a framework for celebrating
Nevada's and Utah's rich historic, archaeological, cultural, and
natural resources for both visitors and residents.
The bill will establish a board of directors consisting of local
officials from both counties and tribes to manage the designated route.
The board will develop a management plan within 3 years of the bill's
passage, and the Secretary of the Interior will enter into a memorandum
of understanding with the Board of Directors for the management of the
resources of the heritage route. Our legislation authorizes up to $10
million to carry out the Act but limits Federal funding to no more than
50 percent of the project's cost. The bill allows the Secretary to
provide assistance for 15 years after the bill is enacted.
Our bill benefits not just the people of Nevada and Utah, but
citizens of every State in our Union. It highlights an area of
outstanding cultural and natural value and brings people together to
celebrate common values and a common history of which we all can be
proud.
I was pleased that my distinguished colleagues recognized the value
of this legislation during the 108th Congress and supported its passage
by the Energy and Natural Resources Committee and by the Senate as a
whole. I look forward to working with my friends to move this bill in a
timely manner during the current session.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 249
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Great Basin National
Heritage Route Act''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) the natural, cultural, and historic heritage of the
North American Great Basin is nationally significant;
(2) communities along the Great Basin Heritage Route
(including the towns of Delta, Utah, Ely, Nevada, and the
surrounding communities) are located in a classic western
landscape that contains long natural vistas, isolated high
desert valleys, mountain ranges, ranches, mines, historic
railroads, archaeological sites, and tribal communities;
(3) the Native American, pioneer, ranching, mining, timber,
and railroad heritages associated with the Great Basin
Heritage Route include the social history and living cultural
traditions of a rich diversity of nationalities;
(4) the pioneer, Mormon, and other religious settlements,
and ranching, timber, and mining activities of the region
played and continue to play a significant role in the
development of the United States, shaped by--
(A) the unique geography of the Great Basin;
(B) an influx of people of Greek, Chinese, Basque, Serb,
Croat, Italian, and Hispanic descent; and
(C) a Native American presence (Western Shoshone, Northern
and Southern Paiute, and Goshute) that continues in the Great
Basin today;
(5) the Great Basin housed internment camps for Japanese-
American citizens during World War II, 1 of which, Topaz, was
located along the Heritage Route;
(6) the pioneer heritage of the Heritage Route includes the
Pony Express route and stations, the Overland Stage, and many
examples of 19th century exploration of the western United
States;
(7) the Native American heritage of the Heritage Route
dates back thousands of years and includes--
(A) archaeological sites;
(B) petroglyphs and pictographs;
(C) the westernmost village of the Fremont culture; and
(D) communities of Western Shoshone, Paiute, and Goshute
tribes;
(8) the Heritage Route contains multiple biologically
diverse ecological communities that are home to exceptional
species such as--
(A) bristlecone pines, the oldest living trees in the
world;
(B) wildlife adapted to harsh desert conditions;
(C) unique plant communities, lakes, and streams; and
(D) native Bonneville cutthroat trout;
(9) the air and water quality of the Heritage Route is
among the best in the United States, and the clear air
permits outstanding viewing of the night skies;
(10) the Heritage Route includes unique and outstanding
geologic features such as numerous limestone caves, classic
basin and range topography with playa lakes, alluvial fans,
volcanics, cold and hot springs, and recognizable features of
ancient Lake Bonneville;
(11) the Heritage Route includes an unusual variety of open
space and recreational and educational opportunities because
of the great quantity of ranching activity and public land
(including city, county, and State parks, national forests,
Bureau of Land Management land, and a national park);
(12) there are significant archaeological, historical,
cultural, natural, scenic, and recreational resources in the
Great Basin to merit the involvement of the Federal
Government in the development, in cooperation with the Great
Basin Heritage Route Partnership and other local and
governmental entities, of programs and projects to--
(A) adequately conserve, protect, and interpret the
heritage of the Great Basin for present and future
generations; and
(B) provide opportunities in the Great Basin for education;
and
(13) the Great Basin Heritage Route Partnership shall serve
as the management entity for a Heritage Route established in
the Great Basin.
(b) Purposes.--The purposes of this Act are--
(1) to foster a close working relationship with all levels
of government, the private sector, and the local communities
within White Pine County, Nevada, Millard County,
[[Page S754]]
Utah, and the Duckwater Shoshone Reservation;
(2) to enable communities referred to in paragraph (1) to
conserve their heritage while continuing to develop economic
opportunities; and
(3) to conserve, interpret, and develop the archaeological,
historical, cultural, natural, scenic, and recreational
resources related to the unique ranching, industrial, and
cultural heritage of the Great Basin, in a manner that
promotes multiple uses permitted as of the date of enactment
of this Act, without managing or regulating land use.
SEC. 3. DEFINITIONS.
In this Act:
(1) Great basin.--The term ``Great Basin'' means the North
American Great Basin.
(2) Heritage route.--The term ``Heritage Route'' means the
Great Basin National Heritage Route established by section
4(a).
(3) Management entity.--The term ``management entity''
means the Great Basin Heritage Route Partnership established
by section 4(c).
(4) Management plan.--The term ``management plan'' means
the plan developed by the management entity under section
6(a).
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the National
Park Service.
SEC. 4. GREAT BASIN NATIONAL HERITAGE ROUTE.
(a) Establishment.--There is established the Great Basin
National Heritage Route to provide the public with access to
certain historical, cultural, natural, scenic, and
recreational resources in White Pine County, Nevada, Millard
County, Utah, and the Duckwater Shoshone Reservation in the
State of Nevada, as designated by the management entity.
(b) Boundaries.--The management entity shall determine the
specific boundaries of the Heritage Route.
(c) Management Entity.--
(1) In general.--The Great Basin Heritage Route Partnership
shall serve as the management entity for the Heritage Route.
(2) Board of directors.--The Great Basin Heritage Route
Partnership shall be governed by a board of directors that
consists of--
(A) 4 members who are appointed by the Board of County
Commissioners for Millard County, Utah;
(B) 4 members who are appointed by the Board of County
Commissioners for White Pine County, Nevada; and
(C) a representative appointed by each Native American
Tribe participating in the Heritage Route.
SEC. 5. MEMORANDUM OF UNDERSTANDING.
(a) In General.--In carrying out this Act, the Secretary,
in consultation with the Governors of the States of Nevada
and Utah and the tribal government of each Indian tribe
participating in the Heritage Route, shall enter into a
memorandum of understanding with the management entity.
(b) Inclusions.--The memorandum of understanding shall
include information relating to the objectives and management
of the Heritage Route, including--
(1) a description of the resources of the Heritage Route;
(2) a discussion of the goals and objectives of the
Heritage Route, including--
(A) an explanation of the proposed approach to
conservation, development, and interpretation; and
(B) a general outline of the anticipated protection and
development measures;
(3) a description of the management entity;
(4) a list and statement of the financial commitment of the
initial partners to be involved in developing and
implementing the management plan; and
(5) a description of the role of the States of Nevada and
Utah in the management of the Heritage Route.
(c) Additional Requirements.--In developing the terms of
the memorandum of understanding, the Secretary and the
management entity shall--
(1) provide opportunities for local participation; and
(2) include terms that ensure, to the maximum extent
practicable, timely implementation of all aspects of the
memorandum of understanding.
(d) Amendments.--
(1) In general.--The Secretary shall review any amendments
of the memorandum of understanding proposed by the management
entity or the Governor of the State of Nevada or Utah.
(2) Use of funds.--Funds made available under this Act
shall not be expended to implement a change made by a
proposed amendment described in paragraph (1) until the
Secretary approves the amendment.
SEC. 6. MANAGEMENT PLAN.
(a) In General.--Not later than 3 years after the date of
enactment of this Act, the management entity shall develop
and submit to the Secretary for approval a management plan
for the Heritage Route that--
(1) specifies--
(A) any resources designated by the management entity under
section 4(a); and
(B) the specific boundaries of the Heritage Route, as
determined under section 4(b); and
(2) presents clear and comprehensive recommendations for
the conservation, funding, management, and development of the
Heritage Route.
(b) Considerations.--In developing the management plan, the
management entity shall--
(1) provide for the participation of local residents,
public agencies, and private organizations located within the
counties of Millard County, Utah, White Pine County, Nevada,
and the Duckwater Shoshone Reservation in the protection and
development of resources of the Heritage Route, taking into
consideration State, tribal, county, and local land use plans
in existence on the date of enactment of this Act;
(2) identify sources of funding;
(3) include--
(A) a program for implementation of the management plan by
the management entity, including--
(i) plans for restoration, stabilization, rehabilitation,
and construction of public or tribal property; and
(ii) specific commitments by the identified partners
referred to in section 5(b)(4) for the first 5 years of
operation; and
(B) an interpretation plan for the Heritage Route; and
(4) develop a management plan that will not infringe on
private property rights without the consent of the owner of
the private property.
(c) Failure to Submit.--If the management entity fails to
submit a management plan to the Secretary in accordance with
subsection (a), the Heritage Route shall no longer qualify
for Federal funding.
(d) Approval and Disapproval of Management Plan.--
(1) In general.--Not later than 90 days after receipt of a
management plan under subsection (a), the Secretary, in
consultation with the Governors of the States of Nevada and
Utah, shall approve or disapprove the management plan.
(2) Criteria.--In determining whether to approve a
management plan, the Secretary shall consider whether the
management plan--
(A) has strong local support from a diversity of
landowners, business interests, nonprofit organizations, and
governments associated with the Heritage Route;
(B) is consistent with and complements continued economic
activity along the Heritage Route;
(C) has a high potential for effective partnership
mechanisms;
(D) avoids infringing on private property rights; and
(E) provides methods to take appropriate action to ensure
that private property rights are observed.
(3) Action following disapproval.--If the Secretary
disapproves a management plan under paragraph (1), the
Secretary shall--
(A) advise the management entity in writing of the reasons
for the disapproval;
(B) make recommendations for revisions to the management
plan; and
(C) not later than 90 days after the receipt of any
proposed revision of the management plan from the management
entity, approve or disapprove the proposed revision.
(e) Implementation.--On approval of the management plan as
provided in subsection (d)(1), the management entity, in
conjunction with the Secretary, shall take appropriate steps
to implement the management plan.
(f) Amendments.--
(1) In general.--The Secretary shall review each amendment
to the management plan that the Secretary determines may make
a substantial change to the management plan.
(2) Use of funds.--Funds made available under this Act
shall not be expended to implement an amendment described in
paragraph (1) until the Secretary approves the amendment.
SEC. 7. AUTHORITY AND DUTIES OF MANAGEMENT ENTITY.
(a) Authorities.--The management entity may, for purposes
of preparing and implementing the management plan, use funds
made available under this Act to--
(1) make grants to, and enter into cooperative agreements
with, a State (including a political subdivision), an Indian
tribe, a private organization, or any person; and
(2) hire and compensate staff.
(b) Duties.--In addition to developing the management plan,
the management entity shall--
(1) give priority to implementing the memorandum of
understanding and the management plan, including taking steps
to--
(A) assist units of government, regional planning
organizations, and nonprofit organizations in--
(i) establishing and maintaining interpretive exhibits
along the Heritage Route;
(ii) developing recreational resources along the Heritage
Route;
(iii) increasing public awareness of and appreciation for
the archaeological, historical, cultural, natural, scenic,
and recreational resources and sites along the Heritage
Route; and
(iv) if requested by the owner, restoring, stabilizing, or
rehabilitating any private, public, or tribal historical
building relating to the themes of the Heritage Route;
(B) encourage economic viability and diversity along the
Heritage Route in accordance with the objectives of the
management plan; and
(C) encourage the installation of clear, consistent, and
environmentally appropriate signage identifying access points
and sites of interest along the Heritage Route;
(2) consider the interests of diverse governmental,
business, and nonprofit groups associated with the Heritage
Route;
[[Page S755]]
(3) conduct public meetings in the region of the Heritage
Route at least semiannually regarding the implementation of
the management plan;
(4) submit substantial amendments (including any increase
of more than 20 percent in the cost estimates for
implementation) to the management plan to the Secretary for
approval by the Secretary; and
(5) for any year for which Federal funds are received under
this Act--
(A) submit to the Secretary a report that describes, for
the year--
(i) the accomplishments of the management entity;
(ii) the expenses and income of the management entity; and
(iii) each entity to which any loan or grant was made;
(B) make available for audit all records pertaining to the
expenditure of the funds and any matching funds; and
(C) require, for all agreements authorizing the expenditure
of Federal funds by any entity, that the receiving entity
make available for audit all records pertaining to the
expenditure of the funds.
(c) Prohibition on the Acquisition of Real Property.--The
management entity shall not use Federal funds made available
under this Act to acquire real property or any interest in
real property.
(d) Prohibition on the Regulation of Land Use.--The
management entity shall not regulate land use within the
Heritage Route.
SEC. 8. DUTIES AND AUTHORITIES OF FEDERAL AGENCIES.
(a) Technical and Financial Assistance.--
(1) In general.--The Secretary may, on request of the
management entity, provide technical and financial assistance
to develop and implement the management plan and memorandum
of understanding.
(2) Priority for assistance.--In providing assistance under
paragraph (1), the Secretary shall, on request of the
management entity, give priority to actions that assist in--
(A) conserving the significant archaeological, historical,
cultural, natural, scenic, and recreational resources of the
Heritage Route; and
(B) providing education, interpretive, and recreational
opportunities, and other uses consistent with those
resources.
(b) Application of Federal Law.--The establishment of the
Heritage Route shall have no effect on the application of any
Federal law to any property within the Heritage Route.
SEC. 9. LAND USE REGULATION; APPLICABILITY OF FEDERAL LAW.
(a) Land Use Regulation.--Nothing in this Act--
(1) modifies, enlarges, or diminishes any authority of the
Federal, State, tribal, or local government to regulate by
law (including by regulation) any use of land; or
(2) grants any power of zoning or land use to the
management entity.
(b) Applicability of Federal Law.--Nothing in this Act--
(1) imposes on the Heritage Route, as a result of the
designation of the Heritage Route, any regulation that is not
applicable to the area within the Heritage Route as of the
date of enactment of this Act; or
(2) authorizes any agency to promulgate a regulation that
applies to the Heritage Route solely as a result of the
designation of the Heritage Route under this Act.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated to
carry out this Act $10,000,000, of which not more than
$1,000,000 may be made available for any fiscal year.
(b) Cost Sharing.--
(1) Federal share.--The Federal share of the cost of any
activity assisted under this Act shall not exceed 50 percent.
(2) Form of non-federal share.--The non-Federal share may
be in the form of in-kind contributions, donations, grants,
and loans from individuals and State or local governments or
agencies.
SEC. 11. TERMINATION OF AUTHORITY.
The authority of the Secretary to provide assistance under
this Act terminates on the date that is 15 years after the
date of enactment of this Act.
______
Mr. ENZI (for himself and Mr. Kennedy):
S. 250. A bill to amend the Carl D. Perkins Vocational and Technical
Education Act of 1998 to improve the Act; to the Committee on Health,
Education, Labor, and Pensions.
Mr. ENZI: Mr. President, I rise today to introduce the Carl D.
Perkins Vocational and Technical Education Improvement Act of 2005. The
Perkins Act, together with the Workforce Investment Act, the Higher
Education Act, and other federal education and programs, provides
important resources that are needed to help adequately prepare students
of all ages for jobs in high-wage and highskilled occupations. It is
part of a group of federal education and programs that are critical to
a lifelong of learning. In this technology driven, global economy,
school is never out. Everyone is a student who must adapt to the
changing needs of their jobs and the workforce by continuing to pursue
an education in their chosen field. In turn, Congress must ensure that
education and training are connected to the needs of business,
including small businesses, now and into the future.
It is my hope that this body will take the necessary action to
reauthorize the Carl D. Perkins Vocational and Technical Education Act.
The Act works together with a combination of federal education and
training programs that will strengthen our workforce and enable America
to compete--and succeed--in the global economy.
At a hearing held on June 24, 2004, before the Health, Education,
Labor and Pensions Committee, members heard testimonies from leaders in
career and technical training emphasizing the importance of constant
training, retraining and upgrading of the skills today's jobs require.
One of the things we learned at that hearing is that many students
leaving high school or college and entering the workforce find
themselves unprepared for life because they lack the skills they need
to succeed in the workforce. This country created over 2 million new
jobs since January 2001. That's great news. Unfortunately, the
complaint heard from employers is that there are too few skilled
workers to meet their needs. We have a strong interest in making sure
this is corrected. The Perkins Act would provide both strong academic
and relevant job skill training to promote and sustain the long-term
competitiveness of this country.
A unique aspect of the Perkins program that addresses the needs of
the changing workforce is that it targets funds to both secondary and
postsecondary schools. This approach provides a good platform from
which we can better coordinate workforce preparation policy and
training with an emphasis on lifelong learning. It is essential to
facilitate a sequence of career or technical education courses that a
student can complete before they even get to college, and that they can
continue at the postsecondary level, whenever they decide to go on.
This legislation introduced today is the result of a bipartisan
process that began in the 108th Congress. I'm pleased to have worked
with the Members of the Committee and stakeholders on a bipartisan bill
that will improve the Perkins Act to better meet the needs of students,
workers, and business. This legislation will help strengthen the
Perkins program by improving accountability, involving businesses in
career and technical education programs, emphasizing challenging
academic instruction, and advancing the field of career and technical
education by linking those programs to advances in industry.
This legislation would also encourage greater collaboration between
state agencies responsible for education and training activities. It
requires state agencies to work together on identifying the needs of
the workforce and designing curriculum to match those needs. It also
emphasizes the needs of nontraditional students and other lifelong
learners, who are returning to school for the first time, or those who
are seeking additional skill training.
This legislation also continues to emphasize the need to introduce
women and girls to high skill, high wage jobs. It is important that we
help expand the vision of our students to ensure they consider all the
options that are available to them, not just the ones that fit general,
and sometimes erroneous, conceptions.
I hope our bipartisan efforts will continue to produce results as we
move the bill through the Senate and into Conference. I do not wish to
see another piece of bipartisan legislation lost in the legislative
limbo of election year politics. An important step that the Senate must
take is to appoint conferees to finish the reauthorization of the
Workforce Investment Act. That program offers the resources that are
needed to help adequately prepare more than 900,000 unemployed workers
find work each year. It passed the Senate unanimously, both in
Committee and the floor. Conferees must now be appointed before the
August recess. If we are going to help workers in this country, we must
send this important legislation to Conference so that it will
ultimately reach the President and be signed into law.
I cannot stress enough the importance of Federal initiatives like the
Carl D. Perkins Vocational and Technical Education Act and the
Workforce
[[Page S756]]
Investment Act to keep American workers and businesses competitive. The
Perkins Act can help close the gap that threatens America's long-term
competitiveness. It is essential that we take advantage of the
opportunity we have during this reauthorization process to improve the
link between education and relevant academic and skills preparation. By
so doing, we will create a pathway to prosperity for American workers
and businesses alike, that both will make good use of for years to
come.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 250
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 ``Carl D.
Perkins Career and Technical Education Improvement Act of
2005''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Purpose.
Sec. 4. Definitions.
Sec. 5. Transition provisions.
Sec. 6. Limitation.
Sec. 7. Authorization of appropriations.
TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES
Sec. 101. Career and technical education assistance to the States.
Sec. 102. Reservations and State allotment.
Sec. 103. Within State allocation.
Sec. 104. Accountability.
Sec. 105. National activities.
Sec. 106. Assistance for the outlying areas.
Sec. 107. Native American program.
Sec. 108. Tribally controlled postsecondary career and technical
institutions.
Sec. 109. Occupational and employment information.
Sec. 110. State administration.
Sec. 111. State plan.
Sec. 112. Improvement plans.
Sec. 113. State leadership activities.
Sec. 114. Distribution of funds to secondary school programs.
Sec. 115. Distribution of funds for postsecondary career and technical
education programs.
Sec. 116. Special rules for career and technical education.
Sec. 117. Local plan for career and technical education programs.
Sec. 118. Local uses of funds.
Sec. 119. Tech-Prep education.
TITLE II--GENERAL PROVISIONS
Sec. 201. Redesignation of title.
Sec. 202. Fiscal requirements.
Sec. 203. Voluntary selection and participation.
Sec. 204. Limitation for certain students.
Sec. 205. Authorization of Secretary; participation of private school
personnel.
Sec. 206. Student assistance and other Federal programs.
Sec. 207. Table of contents.
SEC. 2. REFERENCES.
Except as otherwise expressly provided, wherever in this
Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Carl D. Perkins Vocational and
Technical Education Act of 1998 (20 U.S.C. 2301 et seq.).
SEC. 3. PURPOSE.
Section 2 (20 U.S.C. 2301) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) in paragraph (1), by striking ``standards'' and
inserting ``and technical standards, and to assist students
in meeting such standards, especially in preparation for high
skill, high wage, or high demand occupations in emerging or
established professions'';
(3) in paragraph (2), by inserting ``challenging'' after
``integrate'';
(4) in paragraph (3), by striking ``and'' after the
semicolon;
(5) in paragraph (4)--
(A) by inserting ``conducting and'' before ``disseminating
national'';
(B) by inserting ``disseminating information on best
practices,'' after ``national research,''; and
(C) by striking the period at the end and inserting a
semicolon; and
(6) by adding at the end the following:
``(5) promoting leadership and professional development at
the State and local levels, and developing research and best
practices for improving the quality of career and technical
education teachers, faculty, principals, administrators, and
counselors;
``(6) supporting partnerships among secondary schools,
postsecondary institutions, area career technical centers,
business and industry, professional associations, and
intermediaries; and
``(7) developing a highly skilled workforce needed to keep
America competitive in the global economy in conjunction with
other Federal education and training programs, including
workforce investment programs, that provide lifelong learning
for the workforce of today and tomorrow.''.
SEC. 4. DEFINITIONS.
Section 3 (20 U.S.C. 2302) is amended--
(1) in paragraph (2), by inserting ``, including employment
statistics and information relating to national, regional,
and local labor market areas, as provided pursuant to section
118, and career ladder information, where appropriate'' after
``to enter'';
(2) in paragraph (3)--
(A) in the paragraph heading, by striking ``vocational''
and inserting ``career''; and
(B) by striking ``vocational'' each place the term appears
and inserting ``career'';
(3) by striking paragraph (4);
(4) by redesignating paragraphs (5) through (30) as
paragraphs (10) through (35), respectively;
(5) by inserting after paragraph (3) the following:
``(4) Articulation agreement.--The term `articulation
agreement' means a written commitment, approved annually by
the relevant administrators of the secondary and
postsecondary institutions, to a program that is designed to
provide students with a nonduplicative sequence of
progressive achievement leading to technical skill
proficiency, a credential, a certificate, or a degree, and
linked through credit transfer agreements.
``(5) Career and technical education.--The term `career and
technical education' means organized educational activities
that--
``(A) offer a sequence of courses (which may include
technical learning experiences) that--
``(i) provides individuals with the challenging academic
and technical knowledge and skills the individuals need to
prepare for further education and for careers in emerging and
established professions; and
``(ii) may lead to technical skill proficiency, a
credential, a certificate, or a degree; and
``(B) include competency-based applied learning that
contributes to the academic knowledge, higher-order reasoning
and problem-solving skills, work attitudes, general
employability skills, technical skills, and occupation-
specific skills, of an individual.
``(6) Career and technical education student.--The term
`career and technical education student' means a student who
enrolls in a clearly defined sequence of career and technical
education courses leading to attainment of technical skill
proficiency, a credential, a certificate, or a degree.
``(7) Career and technical student organization.--
``(A) In general.--The term `career and technical student
organization' means an organization for individuals enrolled
in a career and technical education program that engages in
career and technical education activities as an integral part
of the instructional program.
``(B) State and national units.--An organization described
in subparagraph (A) may have State and national units that
aggregate the work and purposes of instruction in career and
technical education at the local level.
``(8) Career guidance and academic counseling.--The term
`career guidance and academic counseling' means providing
access to information regarding career awareness and planning
with respect to an individual's occupational and academic
future that shall involve guidance and counseling with
respect to career options, financial aid, and postsecondary
options.
``(9) Career pathway.--The term `career pathway' means a
coordinated and nonduplicative sequence of courses (which may
include technical learning experiences) and associated
credits that--
``(A) shall identify both secondary and postsecondary
education elements;
``(B) shall include challenging academic and career and
technical education content;
``(C) may include the opportunity for secondary students to
participate in dual or concurrent enrollment programs or
other ways to acquire postsecondary credits; and
``(D) may culminate in technical skill proficiency, a
credential, a certificate, or a degree.'';
(6) in paragraph (10) (as redesignated by paragraph (4) of
this section), by striking ``5206'' and inserting ``5210'';
(7) by redesignating paragraphs (11) through (35) (as
redesignated by paragraph (4) of this section) as paragraphs
(12) through (36), respectively;
(8) by inserting after paragraph (10) (as redesignated by
paragraph (4) of this section) the following:
``(11) Community college.--The term `community college'--
``(A) means an institution of higher education, as defined
in section 101 of the Higher Education Act of 1965, that
provides not less than a 2-year program that is acceptable
for full credit toward a baccalaureate degree; and
``(B) includes tribally controlled colleges or
universities.'';
(9) in paragraph (12) (as redesignated by paragraph (7) of
this section)--
(A) by striking ``method of instruction'' and inserting
``method''; and
(B) by striking ``vocational'' and inserting ``career'';
(10) by redesignating paragraphs (13) through (36) (as
redesignated by paragraph (7) of this section) as paragraphs
(14) through (37), respectively;
(11) by inserting after paragraph (12) the following:
[[Page S757]]
``(13) Core academic subjects.--The term `core academic
subjects' has the meaning given the term in section 9101 of
the Elementary and Secondary Education Act of 1965, except
that under this Act such subjects included in such term shall
be only those subjects in a secondary school context.'';
(12) in paragraph (16) (as redesignated by paragraph (10)
of this section), by striking ``vocational'' both places the
term appears and inserting ``career'';
(13) in paragraph (17) (as redesignated by paragraph (10)
of this section)--
(A) in subparagraph (A), by striking ``an institution of
higher education'' and inserting ``a public or nonprofit
private institution of higher education that offers career
and technical education courses that lead to technical skill
proficiency, an industry-recognized credential, a
certificate, or a degree''; and
(B) in subparagraph (C), by striking ``vocational'' and
inserting ``career'';
(14) in paragraph (18)(A) (as redesignated by paragraph
(10) of this section), by striking ``agency, an area
vocational'' and inserting ``agency (including a public
charter school that operates as a local educational agency),
an area career'';
(15) by redesignating paragraphs (20) through (37) (as
redesignated by paragraph (10) of this section) as paragraphs
(21) through (38), respectively;
(16) by inserting after paragraph (19) (as redesignated by
paragraph (10) of this section) the following:
``(20) Graduation and career plan.--The term `graduation
and career plan' means a written plan for a secondary career
and technical education student, that--
``(A) is developed with career guidance and academic
counseling or other professional staff, and in consultation
with parents, not later than in the first year of secondary
school or upon enrollment in career and technical education;
``(B) is reviewed annually and modified as needed;
``(C) includes relevant information on--
``(i) secondary school requirements for graduating with a
diploma;
``(ii) postsecondary education admission requirements; and
``(iii) high skill, high wage, or high demand occupations
and nontraditional fields in emerging and established
professions, and labor market indicators; and
``(D) states the student's secondary school graduation
goals, postsecondary education and training, or employment
goals, and identifies 1 or more career pathways that
correspond to the goals.'';
(17) in paragraph (25) (as redesignated by paragraph (15)
of this section)--
(A) in the paragraph heading, by striking ``training and
employment'' and inserting ``fields''; and
(B) by striking ``training and employment'' and inserting
``fields'';
(18) in paragraph (26) (as redesignated by paragraph (15)
of this section), by striking ``the Commonwealth'' and all
that follows through the period and inserting ``and the
Commonwealth of the Northern Mariana Islands.'';
(19) by redesignating paragraphs (31) through (38) (as
redesignated by paragraph (15) of this section) as paragraphs
(32) through (39), respectively;
(20) by inserting after paragraph (30) (as redesignated by
paragraph (15) of this section) the following:
``(31) Self-sufficiency.--The term `self-sufficiency' means
a standard that is adopted, calculated, or commissioned by a
local area or State, and which adjusts for local factors, in
specifying the income needs of families, by family size, the
number and ages of children in the family, and sub-State
geographical considerations.'';
(21) in paragraph (32) (as redesignated by paragraph (19)
of this section)--
(A) in subparagraph (C), by striking ``training and
employment'' and inserting ``fields''; and
(B) in subparagraph (F), by striking ``individuals with
other barriers to educational achievement, including'';
(22) in paragraph (34) (as redesignated by paragraph (19)
of this section) by striking ``, and instructional aids and
devices'' and inserting ``instructional aids, and work
supports'';
(23) by striking paragraph (35) (as redesignated by
paragraph (19) of this section) and inserting the following:
``(35) Tech-prep program.--The term `tech-prep program'
means a program of study that--
``(A) combines at a minimum 2 years of secondary education
(as determined under State law) with a minimum of 2 years of
postsecondary education in a nonduplicative, sequential
course of study;
``(B) integrates academic and career and technical
education instruction, and utilizes work-based and worksite
learning where appropriate and available;
``(C) provides technical preparation in a career field,
including high skill, high wage, or high demand occupations;
``(D) builds student competence in technical skills and in
core academic subjects, as appropriate, through applied,
contextual, and integrated instruction, in a coherent
sequence of courses;
``(E) leads to technical skill proficiency, a credential, a
certificate, or a degree, in a specific career field;
``(F) leads to placement in appropriate employment or to
further education; and
``(G) utilizes career pathways, to the extent
practicable.'';
(24) in paragraph (37) (as redesignated by paragraph (19)
of this section)--
(A) in the paragraph heading, by striking ``vocational''
and inserting ``career'';
(B) in the matter preceding subparagraph (A)--
(i) by striking ``vocational'' and inserting ``career'';
(ii) by striking ``paragraph (2)'' and inserting
``subsection (a)(2)''; and
(iii) by striking ``paragraph (5)(A)'' and inserting
``subsection (a)(5)''; and
(C) in subparagraph (F), by striking ``vocational'' and
inserting ``career''; and
(25) by striking paragraphs (38) and (39) (as redesignated
by paragraph (19) of this section).
SEC. 5. TRANSITION PROVISIONS.
Section 4 (20 U.S.C. 2303) is amended by striking ``the
Carl D. Perkins Vocational and Applied Technology Education
Act'' and all that follows through the period and inserting
``this Act, as this Act was in effect on the day before the
date of enactment of the Carl D. Perkins Career and Technical
Education Improvement Act of 2005. Each eligible agency shall
be assured a full fiscal year for transition to plan for and
implement the requirements of this Act.''.
SEC. 6. LIMITATION.
Section 6 (20 U.S.C. 2305) is amended by striking the
second sentence.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
Section 8 (20 U.S.C. 2307) is amended--
(1) by striking ``title II'' and inserting ``part D of
title I''; and
(2) by striking ``1999 through 2003'' and inserting ``2006
through 2011''.
TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES
SEC. 101. CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE
STATES.
Title I (20 U.S.C. 2321 et seq.) is amended by striking the
title heading and inserting the following:
``TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES''.
SEC. 102. RESERVATIONS AND STATE ALLOTMENT.
Section 111(a) (20 U.S.C. 2321(a)) is amended--
(1) in paragraph (1)(C), by striking ``2001 through 2003,''
and inserting ``2006 through 2011, not more than'';
(2) in paragraph (2), in the matter preceding subparagraph
(A), by striking ``paragraph (1)'' and inserting ``paragraph
(1), that are not allotted under paragraph (5),'';
(3) in paragraph (3)--
(A) in subparagraph (B), by striking ``(or in the case''
and all that follows through ``1998)''; and
(B) in subparagraph (C)--
(i) in clause (i)(I), by striking ``(or in the case'' and
all that follows through ``1998)''; and
(ii) in clause (ii)(II), by striking ``(or in the case''
and all that follows through ``1998)''; and
(4) by adding at the end the following:
``(5) Formula for amounts in excess of the fiscal year 2005
funding level.--
``(A) In general.--For any fiscal year for which the
remainder of the sums appropriated under section 8 and not
reserved under paragraph (1) exceeds the remainder of the
sums appropriated under section 8 and not reserved under
paragraph (1) for fiscal year 2005, such excess amount shall
be allotted to the States according to the formula under
subparagraphs (A) through (D) of paragraph (2).
``(B) Minimum allotment.--
``(i) In general.--Notwithstanding any other provision of
law and subject to clause (ii), no State shall receive for a
fiscal year under this paragraph less than \1/2\ of 1 percent
of the excess amount described in subparagraph (A).
``(ii) Requirement.--No State, by reason of the application
of clause (i), shall be allotted under this paragraph for a
fiscal year more than the amount determined by multiplying--
``(I) the number of individuals in the State counted under
paragraph (2); by
``(II) 185 percent of the national average per pupil
payment made with the excess amount described in subparagraph
(A) for that year.''.
SEC. 103. WITHIN STATE ALLOCATION.
Section 112 (20 U.S.C. 2322) is amended--
(1) in subsection (a)--
(A) in paragraph (1), by adding ``and'' after the
semicolon; and
(B) by striking paragraphs (2) and (3) and inserting the
following:
``(2) not more than 15 percent for--
``(A) State leadership activities described in section 124,
of which--
``(i) an amount determined by the eligible agency shall be
made available to serve individuals in State institutions,
such as State correctional institutions and institutions that
serve individuals with disabilities; and
``(ii) not less than $60,000 shall be available for
services that prepare individuals for nontraditional fields;
and
``(B) administration of the State plan, which may be used
for the costs of--
``(i) developing the State plan;
``(ii) reviewing the local plans;
``(iii) monitoring and evaluating program effectiveness;
[[Page S758]]
``(iv) assuring compliance with all applicable Federal
laws;
``(v) providing technical assistance; and
``(vi) supporting and developing State data systems
relevant to the provisions of this Act.'';
(2) in subsection (b), by striking ``subsection (a)(3)''
both places the term appears and inserting ``subsection
(a)(2)(B)''; and
(3) by striking subsection (c) and inserting the following:
``(c) Reserve.--From amounts made available under
subsection (a)(1) to carry out this subsection, an eligible
agency may--
``(1) award grants to eligible recipients, or consortia of
eligible recipients, for career and technical education
activities described in section 135 in--
``(A) rural areas; or
``(B) areas with high percentages or high numbers of career
and technical education students;
``(2) reserve funds, with the approval of participating
eligible recipients, for--
``(A) innovative statewide initiatives that demonstrate
benefits for eligible recipients, which may include--
``(i) developing and implementing technical assessments;
``(ii) improving the professional development of career and
technical education teachers, faculty, principals, and
administrators; and
``(iii) establishing, enhancing, and supporting systems for
accountability data collection or reporting purposes; or
``(B) the development and implementation of career pathways
or career clusters; and
``(3) carry out activities described in paragraphs (1) and
(2).''.
SEC. 104. ACCOUNTABILITY.
Section 113 (20 U.S.C. 2323) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) in subsection (a)--
(A) by striking ``a State performance accountability
system'' and inserting ``and support State and local
performance accountability systems''; and
(B) by inserting ``and its eligible recipients'' after ``of
the State'';
(3) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking ``paragraph (2)(A)''
and inserting ``subparagraphs (A) and (B) of paragraph (2)'';
and
(ii) in subparagraph (B), by striking ``(2)(B)'' and
inserting ``(2)(C)'';
(B) in paragraph (2)--
(i) by striking subparagraph (A) and inserting the
following:
``(A) Core indicators of performance for secondary career
and technical education students.--Each eligible agency shall
identify in the State plan core indicators of performance for
secondary career and technical education students that
include, at a minimum, measures of each of the following:
``(i) Student achievement on technical assessments and
attainment of career and technical skill proficiencies that
are aligned with nationally recognized industry standards, if
available and appropriate.
``(ii) Student attainment of challenging academic content
standards and student academic achievement standards, as
adopted by the State under section 1111(b)(1) of the
Elementary and Secondary Education Act of 1965 and measured
by the academic assessments described in section 1111(b)(3)
of such Act, consistent with State requirements.
``(iii) Student rates of attainment of--
``(I) a secondary school diploma;
``(II) the recognized equivalent of a secondary school
diploma;
``(III) technical skill proficiency;
``(IV) a credential;
``(V) a certificate; and
``(VI) a degree.
``(iv) Placement in postsecondary education, military
service, apprenticeship programs, or employment.
``(v) Student participation in, and completion of, career
and technical education programs that lead to employment in
nontraditional fields.'';
(ii) by redesignating subparagraphs (B) through (D) as
subparagraphs (C) through (E), respectively;
(iii) by inserting after subparagraph (A) the following:
``(B) Core indicators of performance for postsecondary
career and technical students.--Each eligible agency shall
identify in the State plan core indicators of performance for
postsecondary career and technical education students that
include, at a minimum, measures of each of the following:
``(i) Student achievement on technical assessments and
attainment of career and technical skill proficiencies that
are aligned with nationally recognized industry standards, if
available and appropriate.
``(ii) Student attainment of technical skill proficiency, a
credential, a certificate, or a degree, or retention in
postsecondary education, including transfer to a
baccalaureate degree program.
``(iii) Placement in military service, apprenticeship
programs, or employment.
``(iv) Student participation in, and completion of, career
and technical education programs that lead to employment in
nontraditional fields.
``(v) Increase in earnings, where available.'';
(iv) in subparagraph (C) (as redesignated by clause (ii) of
this subparagraph), by striking ``the title.'' and inserting
``this title, such as attainment of self-sufficiency.'';
(v) in subparagraph (D) (as redesignated by clause (ii) of
this subparagraph), by inserting ``career and technical
education'' after ``developed State'';
(vi) in subparagraph (E) (as redesignated by clause (ii) of
this subparagraph)--
(I) by striking ``this paragraph'' and inserting
``subparagraphs (A) and (B)''; and
(II) by striking ``recipients.'' and inserting
``recipients, and shall meet the requirements of this
section.''; and
(vii) by adding at the end the following:
``(F) Alignment of performance indicators.--In the course
of identifying core indicators of performance and additional
indicators of performance, States shall, to the greatest
extent possible, define the indicators so that substantially
similar information gathered for other State and Federal
programs, or any other purpose, is used to meet the
requirements of this section.'';
(C) in paragraph (3)--
(i) in the paragraph heading, by striking ``Levels'' and
inserting ``State levels'';
(ii) in subparagraph (A)--
(I) in clause (i)--
(aa) by striking ``paragraph (2)(A)'' and inserting
``subparagraphs (A) and (B) of paragraph (2)'';
(bb) by inserting ``after taking into account the local
adjusted levels of performance and'' after ``eligible
agency,''; and
(cc) by striking subclause (II) and inserting the
following:
``(II) require the eligible recipients to make continuous
and significant improvement in career and technical
achievement of career and technical education students,
including special populations.'';
(II) in clause (v)--
(aa) in the clause heading, by striking ``3rd, 4th, and
5th'' and inserting ``subsequent'';
(bb) by striking ``third program year'' and inserting
``third and fifth program years''; and
(cc) by striking ``third, fourth, and fifth'' and inserting
``corresponding subsequent'';
(III) in clause (vi)(II), by inserting ``and significant''
after ``continuous''; and
(IV) in clause (vii), by striking ``or (vi)'' and inserting
``or (v)''; and
(iii) in subparagraph (B), by striking ``(2)(B)'' and
inserting ``(2)(C)''; and
(D) by adding at the end the following:
``(4) Local levels of performance.--
``(A) Local adjusted levels of performance for core
indicators of performance.--
``(i) In general.--Each eligible recipient shall accept the
State adjusted levels of performance established under
paragraph (3) as local adjusted levels of performance, or
negotiate with the State to reach agreement on new local
adjusted levels of performance, for each of the core
indicators of performance described in subparagraphs (A) and
(B) of paragraph (2) for career and technical education
activities authorized under this title. The levels of
performance established under this subparagraph shall, at a
minimum--
``(I) be expressed in a percentage or numerical form, so as
to be objective, quantifiable, and measurable; and
``(II) require the eligible recipient to make continuous
and significant improvement in career and technical
achievement of career and technical education students.
``(ii) Identification in the local plan.--Each eligible
recipient shall identify, in the local plan submitted under
section 134, levels of performance for each of the core
indicators of performance for the first 2 program years
covered by the local plan.
``(iii) Agreement on local adjusted levels of performance
for first 2 years.--The eligible agency and each eligible
recipient shall reach agreement on the eligible recipient's
levels of performance for each of the core indicators of
performance for the first 2 program years covered by the
local plan, taking into account the levels identified in the
local plan under clause (ii) and the factors described in
clause (v). The levels of performance agreed to under this
clause shall be considered to be the local adjusted levels of
performance for the eligible recipient for such years and
shall be incorporated into the local plan prior to the
approval of such plan.
``(iv) Agreement on local adjusted levels of performance
for subsequent years.--Prior to the third and fifth program
years covered by the local plan, the eligible agency and each
eligible recipient shall reach agreement on the local
adjusted levels of performance for each of the core
indicators of performance for the corresponding subsequent
program years covered by the local plan, taking into account
the factors described in clause (v). The local adjusted
levels of performance agreed to under this clause shall be
considered to be the local adjusted levels of performance for
the eligible recipient for such years and shall be
incorporated into the local plan.
``(v) Factors.--The agreement described in clause (iii) or
(iv) shall take into account--
``(I) how the levels of performance involved compare with
the local adjusted levels of performance established for
other eligible recipients, taking into account factors
including the characteristics of participants when the
participants entered the program and the services or
instruction to be provided; and
``(II) the extent to which the local adjusted levels of
performance involved promote continuous and significant
improvement on the core indicators of performance by the
eligible recipient.
``(vi) Revisions.--If unanticipated circumstances arise
with respect to an eligible
[[Page S759]]
recipient resulting in a significant change in the factor
described in clause (v)(II), the eligible recipient may
request that the local adjusted levels of performance agreed
to under clause (iii) or (iv) be revised. The eligible agency
shall issue objective criteria and methods for making such
revisions.
``(B) Levels of performance for additional indicators.--
Each eligible recipient may identify, in the local plan,
local levels of performance for any additional indicators of
performance described in paragraph (2)(C). Such levels shall
be considered to be the local levels of performance for
purposes of this title.
``(C) Report.--Each eligible recipient that receives an
allocation under section 131 shall publicly report, on an
annual basis, its progress in achieving the local adjusted
levels of performance on the core indicators of
performance.''; and
(4) by striking subsection (c)(1)(B) and inserting:
``(B) information on the levels of performance achieved by
the State with respect to the additional indicators of
performance, including the levels of performance
disaggregated for postsecondary institutions, by special
populations, and for secondary institutions, by special
populations and by the categories described in section
1111(h)(1)(C)(i) of the Elementary and Secondary Education
Act of 1965, except that such disaggregation shall not be
required in a case in which the number of individuals in a
category is insufficient to yield statistically reliable
information or the results would reveal personally
identifiable information about an individual.''.
SEC. 105. NATIONAL ACTIVITIES.
Section 114 (20 U.S.C. 2324) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) in subsection (a)(1), by striking ``, including an
analysis of performance data regarding special populations''
and inserting ``, including an analysis of performance data
that is disaggregated for postsecondary institutions, by
special populations, and for secondary institutions, by
special populations and by the categories described in
section 1111(h)(1)(C)(i) of the Elementary and Secondary
Education Act of 1965, except that such disaggregation shall
not be required in a case in which the number of individuals
in a category is insufficient to yield statistically reliable
information or the results would reveal personally
identifiable information about an individual'';
(3) in subsection (c)--
(A) by striking paragraph (2) and inserting the following:
``(2) Independent advisory panel.--
``(A) In general.--The Secretary shall appoint an
independent advisory panel to advise the Secretary on the
implementation of the assessment described in paragraph (3),
including the issues to be addressed and the methodology of
the studies involved to ensure that the assessment adheres to
the highest standards of quality.
``(B) Members.--The advisory panel shall consist of--
``(i) educators, principals, and administrators (including
State directors of career and technical education), with
expertise in the integration of academic and career and
technical education;
``(ii) experts in evaluation, research, and assessment;
``(iii) representatives of labor organizations and
businesses, including small businesses;
``(iv) parents;
``(v) career guidance and academic counseling
professionals; and
``(vi) other individuals and intermediaries with relevant
expertise.
``(C) Independent analysis.--The advisory panel shall
transmit to the Secretary and to the relevant committees of
Congress an independent analysis of the findings and
recommendations resulting from the assessment described in
paragraph (3).
``(D) FACA.--The Federal Advisory Committee Act (5 U.S.C.
App.) shall not apply to the panel established under this
paragraph.'';
(B) in paragraph (3)--
(i) by striking subparagraph (A) and inserting the
following:
``(A) In general.--From amounts made available under
subsection (d), the Secretary shall provide for the conduct
of an independent evaluation and assessment of career and
technical education programs under this Act, including the
implementation of the Carl D. Perkins Career and Technical
Education Improvement Act of 2005, to the extent practicable,
through studies and analyses conducted independently through
grants, contracts, and cooperative agreements that are
awarded on a competitive basis.'';
(ii) in subparagraph (B)--
(I) by striking clause (iii) and inserting the following:
``(iii) the preparation and qualifications of teachers and
faculty of career and technical education, as well as
shortages of such teachers and faculty;'';
(II) by striking clause (v) and inserting the following:
``(v) academic and career and technical education
achievement and employment outcomes of career and technical
education students, including analyses of--
``(I) the number of career and technical education students
and tech-prep students who meet the State adjusted levels of
performance established under section 113;
``(II) the extent and success of integration of challenging
academic and career and technical education for students
participating in career and technical education programs;
``(III) the extent to which career and technical education
programs prepare students, including special populations, for
subsequent employment in high skill, high wage occupations,
or participation in postsecondary education; and
``(IV) the number of career and technical education
students receiving a high school diploma;'';
(III) in clause (vi), by inserting ``, and career and
technical education students' preparation for employment''
after ``programs''; and
(IV) in clause (viii), by inserting ``and local'' after
``State'' both places such term appears; and
(iii) in subparagraph (C)--
(I) in clause (i)--
(aa) by striking ``Committee on Education'' and all that
follows through ``Senate'' and inserting ``relevant
committees of Congress''; and
(bb) by striking ``2002'' both places it appears and
inserting ``2009''; and
(II) in clause (ii), by striking ``Committee on Education''
and all that follows through ``Senate'' and inserting
``relevant committees of Congress'';
(C) in paragraph (4)(B), by striking ``Committee on
Education'' and all that follows through ``Senate'' and
inserting ``relevant committees of Congress'';
(D) in paragraph (5)--
(i) in subparagraph (A)--
(I) in the matter preceding clause (i), by striking
``higher education'' and all that follows through ``centers''
and inserting ``higher education offering comprehensive
graduate programs in career and technical education that
shall be the primary recipient and shall collaborate with a
public or private nonprofit organization or agency, or a
consortium of such institutions, organizations, or agencies,
to establish a national research center'';
(II) in clause (i)--
(aa) by inserting ``and evaluation'' after ``to carry out
research''; and
(bb) by inserting ``, including special populations,''
after ``participants'';
(III) by redesignating clauses (ii), (iii), and (iv), as
clauses (iii), (iv), and (v), respectively;
(IV) by inserting after clause (i) the following:
``(ii) to carry out research for the purpose of developing,
improving, and identifying the most successful methods for
successfully addressing the needs of employers in high skill,
high wage business and industry, including evaluation and
scientifically based research of--
``(I) collaboration between career and technical education
programs and business and industry;
``(II) academic and technical skills required to respond to
the challenge of a global economy and rapid technological
changes; and
``(III) technical knowledge and skills required to respond
to needs of a regional or sectoral workforce, including small
business;'';
(V) in clause (iii) (as redesignated by subclause (III) of
this clause), by inserting ``that are integrated with
challenging academic instruction'' before ``, including'';
and
(VI) by striking clause (iv) (as redesignated by subclause
(III) of this clause) and inserting the following:
``(iv) to carry out scientifically based research, where
appropriate, that can be used to improve preparation and
professional development of teachers, faculty, principals,
and administrators and student learning in the career and
technical education classroom, including--
``(I) effective in-service and pre-service teacher and
faculty education that assists career and technical education
programs in--
``(aa) integrating those programs with academic content
standards and student academic achievement standards, as
adopted by States under section 1111(b)(1) of the Elementary
and Secondary Education Act of 1965; and
``(bb) promoting technical education aligned with industry-
based standards and certifications to meet regional industry
needs;
``(II) dissemination and training activities related to the
applied research and demonstration activities described in
this subsection, which may also include serving as a
repository for information on career and technical education
skills, State academic standards, and related materials; and
``(III) the recruitment and retention of career and
technical education teachers, faculty, counselors,
principals, and administrators, including individuals in
groups underrepresented in the teaching profession; and'';
(ii) in subparagraph (B)--
(I) by striking ``or centers'' both places the term
appears; and
(II) by striking ``Committee on Education'' and all that
follows through ``Senate'' and inserting ``relevant
committees of Congress'';
(iii) in subparagraph (C), by striking ``or centers''; and
(iv) by adding at the end the following:
``(D) Independent governing board.--
``(i) In general.--An institution of higher education that
desires a grant, contract, or cooperative agreement under
this paragraph shall identify, in its application, an
independent governing board for the center established
pursuant to this paragraph.
[[Page S760]]
``(ii) Members.--The independent governing board shall
consist of the following:
``(I) Two representatives of secondary career and technical
education.
``(II) Two representatives of postsecondary career and
technical education.
``(III) Two representatives of eligible agencies.
``(IV) Two representatives of business and industry.
``(V) Two representatives of career and technical teacher
preparation institutions.
``(VI) Two nationally recognized researchers in the field
of career and technical education.
``(iii) Coordination.--The independent governing board
shall ensure that the research and dissemination activities
carried out by the center are coordinated with the research
activities carried out by the Secretary.'';
(E) in paragraph (6)(B)(ii), by striking ``or centers'';
and
(F) by striking paragraph (8); and
(4) by adding at the end the following:
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section such
sums as may be necessary for each of fiscal years 2006
through 2011.''.
SEC. 106. ASSISTANCE FOR THE OUTLYING AREAS.
Section 115 (20 U.S.C. 2325) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) in subsection (b)--
(A) in the matter preceding paragraph (1), by striking
``the Republic of the Marshall Islands, the Federated States
of Micronesia,'';
(B) in paragraph (1), by striking ``training and
retraining;'' and inserting ``preparation;'';
(C) by redesignating paragraphs (2) and (3) as paragraphs
(3) and (4), respectively; and
(D) by inserting after paragraph (1) the following:
``(2) professional development for teachers, faculty,
principals, and administrators;''; and
(3) in subsection (d)--
(A) by striking ``the Republic of the Marshall Islands, the
Federated States of Micronesia, and''; and
(B) by striking ``2001'' and inserting ``2007''.
SEC. 107. NATIVE AMERICAN PROGRAM.
Section 116 (20 U.S.C. 2326) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) in subsection (a)(5), by adding a period at the end;
(3) in subsection (b)--
(A) in paragraph (1), by striking ``(d)'' and inserting
``(c)''; and
(B) in paragraph (2), by striking ``(other than in
subsection (i))'';
(4) in subsection (d), by striking ``section an'' and
inserting ``section, an'';
(5) in subsection (e), by striking ``paragraph'' and
inserting ``section''; and
(6) in subsection (h), by striking ``which are recognized
by the Governor of the State of Hawaii''.
SEC. 108. TRIBALLY CONTROLLED POSTSECONDARY CAREER AND
TECHNICAL INSTITUTIONS.
Section 117 (20 U.S.C. 2327) is amended--
(1) by striking the section heading and inserting the
following:
``SEC. 117. TRIBALLY CONTROLLED POSTSECONDARY CAREER AND
TECHNICAL INSTITUTIONS.'';
(2) by striking ``vocational'' each place the term appears
and inserting ``career'';
(3) in subsection (g)--
(A) in paragraph (1), by striking ``The Secretary'' and
inserting ``On an annual basis, the Secretary'';
(B) in paragraph (2)(B), by striking ``2000'' and inserting
``2007''; and
(C) in paragraph (3)(C), by striking ``beginning'' and all
that follows through the period and inserting ``beginning on
the date of enactment of the Carl D. Perkins Career and
Technical Education Improvement Act of 2005.'';
(4) by redesignating subsections (h) and (i) as subsections
(i) and (j), respectively;
(5) by inserting after subsection (g) the following:
``(h) Appeals.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall provide a tribally controlled postsecondary career and
technical institution with a hearing on the record before an
administrative law judge with respect to the following
determinations:
``(A) A determination that such institution is not eligible
for a grant under this section.
``(B) A determination regarding the calculation of the
amount of a grant awarded under this section.
``(2) Procedure for appeal.--To appeal a determination
described in paragraph (1), a tribally controlled
postsecondary career and technical institution shall--
``(A) in the case of an appeal based on a determination
that such institution is not eligible for a grant under this
section, file a notice of appeal with the Secretary not later
than 30 days after receipt of such determination; and
``(B) in the case of an appeal based on a determination
regarding the calculation of the amount of a grant awarded
under this section--
``(i) file a notice of appeal with the Secretary not later
than 30 days after receipt of the Secretary's notification of
the grant amount; and
``(ii) identify the amount of funding that gives rise to
such appeal.
``(3) Withholding of amount.--If a tribally controlled
postsecondary career and technical institution appeals a
determination described in paragraph (1), the Secretary shall
withhold the amount in dispute from the award of grant funds
under this section until such time as the administrative law
judge has issued a written decision on the appeal.''; and
(6) by striking subsection (j) (as redesignated by
paragraph (4) of this section) and inserting the following:
``(j) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$10,000,000 for fiscal year 2006 and such sums as may be
necessary for each of the 5 succeeding fiscal years.''.
SEC. 109. OCCUPATIONAL AND EMPLOYMENT INFORMATION.
Section 118 (20 U.S.C. 2328) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by striking
``(f)'' and inserting ``(g)'';
(B) in paragraph (1)--
(i) in subparagraph (A), by striking ``(b)'' both places it
appears and inserting ``(c)'';
(ii) in subparagraph (B), by striking ``(b)'' and inserting
``(c)''; and
(iii) in subparagraph (C), by striking ``(b)'' and
inserting ``(c)''; and
(C) in paragraph (2), by striking ``(b)'' both places it
appears and inserting ``(c)'';
(2) by redesignating subsections (b) through (f) as
subsections (c) through (g), respectively;
(3) by inserting after subsection (a) the following:
``(b) State Application.--
``(1) In general.--Each State desiring assistance under
this section shall submit an application to the Secretary at
the same time the State submits its State plan under section
122, in such manner, and accompanied by such additional
information, as the Secretary may reasonably require.
``(2) Contents.--Each application submitted under paragraph
(1) shall include--
``(A) a description of how the State entity designated in
subsection (c) will provide information based on labor market
trends to inform program development; and
``(B) information about the academic content standards and
student academic achievement standards adopted by the State
under section 1111(b)(1) of the Elementary and Secondary
Education Act of 1965.'';
(4) in subsection (c) (as redesignated by paragraph (2) of
this section)--
(A) in paragraph (1), by striking ``individuals'' and all
that follows through the semicolon and inserting ``students
and parents, including postsecondary education and training,
including preparation for high skill, high wage, or high
demand occupations and nontraditional fields in emerging or
established professions;'';
(B) in paragraph (2), by inserting ``academic and career
and technical'' after ``relate'';
(C) by striking paragraph (3) and inserting the following:
``(3) to equip teachers, faculty, administrators, and
counselors with the knowledge, skills, and occupational
information needed to assist parents and all students,
especially special populations underrepresented in certain
careers, with career exploration, educational opportunities,
education financing, and exposure to high skill, high wage,
or high demand occupations and nontraditional fields;'';
(D) in paragraph (4), by striking ``such entities;'' and
inserting ``such entities, with an emphasis on high skill,
high wage, or high demand occupations in emerging or
established professions;'';
(E) in paragraph (5), by striking ``and'' after the
semicolon;
(F) in paragraph (6), by striking the period and inserting
``; and''; and
(G) by adding at the end the following:
``(7) to provide information, if available, for each
occupation, on--
``(A) the average earnings of an individual in the
occupation at entry level and after 5 years of employment;
``(B) the expected lifetime earnings; and
``(C) the expected future demand for the occupation, based
on employment projections.'';
(5) in subsection (d)(1) (as redesignated by paragraph (2)
of this section), by striking ``(b)'' both places it appears
and inserting ``(c)'';
(6) in subsection (e)(1) (as redesignated by paragraph (2)
of this section), by striking ``(b)'' and inserting ``(c)'';
(7) in subsection (f)(1) (as redesignated by paragraph (2)
of this section), by striking ``an identification'' and
inserting ``a description''; and
(8) in subsection (g) (as redesignated by paragraph (2) of
this section), by striking ``1999 through 2003'' and
inserting ``2006 through 2011''.
SEC. 110. STATE ADMINISTRATION.
Section 121 (20 U.S.C. 2341) is amended--
(1) by redesignating subsection (a)(2) as subsection (b)
and indenting appropriately;
(2) by redesignating subparagraphs (A) through (D) of
subsection (a)(1) as paragraphs (1) through (4),
respectively, and indenting appropriately;
(3) by redesignating clauses (i) and (ii) of paragraph (4)
(as redesignated by paragraph (2) of this section) as
subparagraphs (A) and (B), respectively, and indenting
appropriately;
(4) by striking the following:
``(a) Eligible Agency Responsibilities.--
``(1) In general.--The responsibilities'' and inserting the
following:
[[Page S761]]
``(a) Eligible Agency Responsibilities.--The
responsibilities'';
(5) in subsection (a)(1) (as redesignated by paragraph (2)
of this section), by striking ``training and employment'' and
inserting ``fields'';
(6) in subsection (a)(2) (as redesignated by paragraph (2)
of this section)--
(A) by inserting ``teacher and faculty preparation
programs,'' after ``teachers,''; and
(B) by inserting ``all types and sizes of'' after
``representatives of''; and
(7) in subsection (b) (as redesignated by paragraph (1) of
this section), by striking ``paragraph (1)'' and inserting
``subsection (a)''.
SEC. 111. STATE PLAN.
Section 122 (20 U.S.C. 2342) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``5'' and inserting ``6''; and
(ii) by adding at the end the following: ``Each eligible
agency may submit a transition plan during the first full
year of implementation of this Act after the date of
enactment of the Carl D. Perkins Career and Technical
Education Improvement Act of 2005. The transition plan shall
fulfill the eligible agency's State plan submission
obligation under this section.''; and
(B) in paragraph (2)(B), by striking ``5 year State plan''
and inserting ``6-year period'';
(3) by striking subsection (b)(1) and inserting the
following:
``(1) In general.--The eligible agency shall develop the
State plan in consultation with academic and career and
technical education teachers, faculty, principals, and
administrators, career guidance and academic counselors,
eligible recipients, parents, students, the State tech-prep
coordinator and representatives of tech-prep consortia (if
applicable), interested community members (including parent
and community organizations), representatives of special
populations, representatives of business (including small
business) and industry, and representatives of labor
organizations in the State, and shall consult the Governor of
the State with respect to such development.'';
(4) by striking subsection (c) and inserting the following:
``(c) Plan Contents.--The State plan shall include
information that--
``(1) describes the career and technical education
activities to be assisted that are designed to meet or exceed
the State adjusted levels of performance, including a
description of--
``(A) how the eligible agency will support eligible
recipients in developing or implementing career pathways for
career and technical education content areas that are
designed to meet relevant workforce needs, including how the
eligible agency will--
``(i) support eligible recipients in developing
articulation agreements between secondary and postsecondary
institutions;
``(ii) support eligible recipients in using labor market
information to identify career pathways that prepare
individuals for high skill, high wage, or high demand
occupations;
``(iii) make available information about career pathways
offered by eligible recipients; and
``(iv) consult with business and industry and use industry-
recognized standards and assessments, if appropriate;
``(B) the secondary and postsecondary career and technical
education programs to be carried out, including programs that
will be carried out by the eligible agency to develop,
improve, and expand access to quality technology in career
and technical education programs;
``(C) the criteria that will be used by the eligible agency
to approve eligible recipients for funds under this title,
including criteria to assess the extent to which the local
plan will--
``(i) promote higher levels of academic achievement;
``(ii) promote higher levels of technical skill attainment;
and
``(iii) identify and address workforce needs;
``(D) how programs at the secondary level will prepare
career and technical education students, including special
populations to graduate from high school with a diploma;
``(E) how such programs will prepare career and technical
education students, including special populations, both
academically and technically, for opportunities in
postsecondary education or entry into high skill, high wage,
or high demand occupations in emerging or established
occupations, and how participating students will be made
aware of such opportunities; and
``(F) how funds will be used to improve or develop new
career and technical education courses in high skill, high
wage, or high demand occupations that are aligned with
business needs and industry standards, as appropriate--
``(i) at the secondary level that are aligned with
challenging academic content standards and student academic
achievement standards adopted by the State under section
1111(b)(1) of the Elementary and Secondary Education Act of
1965; and
``(ii) at the postsecondary level that are relevant and
challenging;
``(2) describes how career and technical education
teachers, faculty, principals, administrators, and career
guidance and academic counselors will be provided
comprehensive initial preparation and professional
development, including through programs and activities that--
``(A) promote the integration of challenging academic and
career and technical education curriculum development,
including opportunities for teachers to jointly develop and
implement curriculum and pedagogical strategies with
appropriate academic teachers;
``(B) increase the academic and career and technical
education knowledge of career and technical education
teachers and faculty;
``(C) are high-quality, sustained, intensive, focused on
instruction, directly related to industry standards, and
includes structured induction and mentoring components for
new personnel, with an emphasis on identifying and addressing
the needs of local businesses, including small businesses;
``(D) ensure an increasing number of career and technical
education teachers and faculty meet teacher certification and
licensing requirements reflecting the needs of their subject
area or areas;
``(E) equip them with the knowledge and skills needed to
work with and improve instruction for special populations;
``(F) assist in accessing and utilizing data, including
labor market indicators, student achievement, and
assessments;
``(G) enhance the leadership capacity of principals and
administrators;
``(H) are integrated with professional development
activities that the State carries out under title II of the
Elementary and Secondary Education Act of 1965 and title II
of the Higher Education Act of 1965; and
``(I) include strategies to expose all career and technical
education students to comprehensive information regarding
career options that lead to high skill, high wage, or high
demand occupations and nontraditional fields;
``(3) describes efforts to improve--
``(A) the recruitment and retention of career and technical
education teachers, faculty, counselors, principals, and
administrators, including individuals in groups
underrepresented in the teaching profession; and
``(B) the transition to teaching from business and
industry, including small business;
``(4) describes efforts to improve the capacity of programs
and faculty at postsecondary institutions to effectively
prepare career and technical education personnel, including,
as appropriate, through electronically delivered distance
education, and articulation agreements between 2-year
technical programs and postsecondary education programs;
``(5) describes how the eligible agency will actively
involve parents, academic and career and technical education
teachers, faculty, principals, and administrators, career
guidance and academic counselors, local businesses (including
small- and medium-sized businesses and business
intermediaries), and labor organizations in the planning,
development, implementation, and evaluation of such career
and technical education programs;
``(6) describes how funds received by the eligible agency
through the allotment made under section 111 will be
allocated--
``(A) among secondary school career and technical
education, or postsecondary and adult career and technical
education, or both, including the rationale for such
allocation; and
``(B) among any consortia that will be formed among
secondary schools and eligible institutions, and how funds
will be allocated among the members of the consortia,
including the rationale for such allocation;
``(7) describes how the eligible agency will--
``(A) use funds to improve or develop new career and
technical education courses in high skill, high wage, or high
demand occupations--
``(i) at the secondary level that are aligned with
challenging academic content standards and student academic
achievement standards adopted by the State under section
1111(b)(1) of the Elementary and Secondary Education Act of
1965; and
``(ii) at the postsecondary level that are challenging and
aligned with business needs and industry standards, as
appropriate;
``(B) improve the academic and technical skills of students
participating in career and technical education programs,
including strengthening the academic, and career and
technical, components of career and technical education
programs through the integration of academics with career and
technical education to ensure learning in the core academic
subjects and career and technical education subjects, and
provide students with strong experience in, and understanding
of, all aspects of an industry;
``(C) ensure that students who participate in such career
and technical education programs are taught to the same
challenging academic proficiencies as are taught to all other
students; and
``(D) encourage secondary school students who participate
in such career and technical education programs to enroll in
challenging courses in core academic subjects;
``(8) describes how the eligible agency will annually
evaluate the effectiveness of such career and technical
education programs, and describes, to the extent practicable,
how the eligible agency is coordinating such programs to
promote relevant lifelong learning and ensure nonduplication
with other existing Federal programs;
``(9) describes the eligible agency's program strategies
for special populations, including a description of how
individuals who are members of the special populations--
``(A) will be provided with equal access to activities
assisted under this title;
[[Page S762]]
``(B) will not be discriminated against on the basis of
their status as members of the special populations; and
``(C) will be provided with programs designed to enable the
special populations to meet or exceed State adjusted levels
of performance, and prepare special populations for further
learning and for high skill, high wage, or high demand
occupations;
``(10) how the eligible agency will collaborate in
developing the State plan with--
``(A) the entity within the State with responsibility for
elementary and secondary education;
``(B) the entity within the State with responsibility for
public institutions engaged in postsecondary education;
``(C) State institutions such as State correctional
institutions and institutions that serve individuals with
disabilities; and
``(D) all other relevant State agencies with responsibility
for career and technical education and training and workforce
development;
``(11) describes what steps the eligible agency will take
to involve representatives of eligible recipients in the
development of the State adjusted levels of performance;
``(12) provides assurances that the eligible agency will
comply with the requirements of this title and the provisions
of the State plan, including the provision of a financial
audit of funds received under this title which may be
included as part of an audit of other Federal or State
programs;
``(13) provides assurances that none of the funds expended
under this title will be used to acquire equipment (including
computer software) in any instance in which such acquisition
results in a direct financial benefit to any organization
representing the interests of the purchasing entity, the
employees of the purchasing entity, or any affiliate of such
an organization;
``(14) describes how the eligible agency will measure and
report data relating to students participating in and
completing career and technical education within specific
career clusters in order to adequately measure the progress
of the students, including special populations, at--
``(A) the secondary level, disaggregated by the categories
described in section 1111(h)(1)(C)(i) of the Elementary and
Secondary Education Act of 1965, except that such
disaggregation shall not be required in a case in which the
number of individuals in a category is insufficient to yield
statistically reliable information or the results would
reveal personally identifiable information about an
individual; and
``(B) the postsecondary level, disaggregated by special
populations and the categories described in section
1111(h)(1)(C)(i) of the Elementary and Secondary Education
Act of 1965, except that such disaggregation shall not be
required in a case in which the number of individuals in a
category is insufficient to yield statistically reliable
information or the results would reveal personally
identifiable information about an individual;
``(15) describes how the eligible agency will adequately
address the needs of students in alternative education
programs, if appropriate;
``(16) describes how the eligible agency will provide local
educational agencies, area career and technical education
schools, and eligible institutions in the State with
technical assistance;
``(17) describes how career and technical education relates
to State and regional occupational opportunities;
``(18) describes the methods proposed for the joint
planning and coordination of programs carried out under this
title with other Federal education programs;
``(19) describes how funds will be used to promote
preparation for high skill, high wage, or high demand
occupations and nontraditional fields in emerging and
established professions;
``(20) describes how funds will be used to serve
individuals in State correctional institutions;
``(21) describes how the eligible agency will ensure that
the data reported to the eligible agency from local
educational agencies and eligible institutions under this
title and the data the eligible agency reports to the
Secretary are complete, accurate, and reliable; and
``(22) contains the description and information specified
in sections 112(b)(8) and 121(c) of the Workforce Investment
Act of 1998 (29 U.S.C. 2822(b)(8) and 2841(c)) concerning the
provision of services only for postsecondary students and
school dropouts.'';
(5) by striking subsection (d) and inserting the following:
``(d) Plan Options.--
``(1) Single plan.--The eligible agency may fulfill the
plan or application submission requirements of this section,
section 118(b), and section 141(c) by submitting a single
State plan. In such plan, the eligible agency may allow
eligible recipients to fulfill the plan or application
submission requirements of section 134 and subsections (a)
and (b) of section 143 by submitting a single local plan.
``(2) Plan submitted as part of 501 plan.--The eligible
agency may submit the plan required under this section as
part of the plan submitted under section 501 of the Workforce
Investment Act of 1998 (20 U.S.C. 9271), provided that the
plan submitted pursuant to the requirement of this section
meets the requirements of this Act.''; and
(6) by striking subsection (f).
SEC. 112. IMPROVEMENT PLANS.
Section 123 (20 U.S.C. 2343) is amended to read as follows:
``SEC. 123. IMPROVEMENT PLANS.
``(a) State Program Improvement Plan.--
``(1) Plan.--If a State fails to meet the State adjusted
levels of performance described in the report submitted under
section 113(c), the eligible agency shall develop and
implement a program improvement plan in consultation with the
appropriate agencies, individuals, and organizations for the
first program year succeeding the program year in which the
eligible agency failed to meet the State adjusted levels of
performance, in order to avoid a sanction under paragraph
(3).
``(2) Technical assistance.--If the Secretary determines
that an eligible agency is not properly implementing the
eligible agency's responsibilities under section 122, or is
not making substantial progress in meeting the purpose of
this Act, based on the State's adjusted levels of
performance, the Secretary shall work with the eligible
agency to implement improvement activities consistent with
the requirements of this Act.
``(3) Failure.--
``(A) In general.--If an eligible agency fails to meet the
State adjusted levels of performance, has not implemented an
improvement plan as described in paragraph (1), has shown no
improvement within 1 year after implementing an improvement
plan as described in paragraph (1), or has failed to meet the
State adjusted levels of performance for 2 or more
consecutive years, the Secretary may, after notice and
opportunity for a hearing, withhold from the eligible agency
all, or a portion of, the eligible agency's allotment under
this title.
``(B) Waiver for exceptional circumstances.--The Secretary
may waive the sanction in subparagraph (A) due to exceptional
or uncontrollable circumstances such as a natural disaster or
a precipitous and unforeseen decline in financial resources
of the State.
``(4) Funds resulting from reduced allotments.--
``(A) In general.--The Secretary shall use funds withheld
under paragraph (3) for a State served by an eligible agency,
to provide (through alternative arrangements) services and
activities within the State to meet the purposes of this Act.
``(B) Redistribution.--If the Secretary cannot
satisfactorily use funds withheld under paragraph (3), then
the amount of funds retained by the Secretary as a result of
a reduction in an allotment made under paragraph (3) shall be
redistributed to other eligible agencies in accordance with
section 111.
``(b) Local Program Improvement.--
``(1) Local evaluation.--Each eligible agency shall
evaluate annually, using the local adjusted levels of
performance described in section 113(b)(4), the career and
technical education activities of each eligible recipient
receiving funds under this title.
``(2) Plan.--
``(A) In general.--If, after reviewing the evaluation, the
eligible agency determines that an eligible recipient is not
making substantial progress in achieving the local adjusted
levels of performance, the eligible agency shall--
``(i) conduct an assessment of the educational needs that
the eligible recipient shall address to overcome local
performance deficiencies, including the performance of
special populations;
``(ii) enter into an improvement plan with an eligible
recipient based on the results of the assessment, for the
first program year succeeding the program year in which the
eligible recipient failed to meet the local adjusted levels
of performance, which plan shall demonstrate how the local
performance deficiencies will be corrected and include
instructional and other programmatic innovations of
demonstrated effectiveness, and, where necessary, strategies
for appropriate staffing and professional development; and
``(iii) conduct regular evaluations of the progress being
made toward reaching the local adjusted levels of
performance, as described in section 113(b)(4), and progress
on implementing the improvement plan.
``(B) Consultation.--The eligible agency shall conduct the
activities described in subparagraph (A) in consultation with
teachers, principals, administrators, faculty, parents, other
school staff, appropriate agencies, and other appropriate
individuals and organizations.
``(3) Technical assistance.--If the eligible agency
determines that an eligible recipient is not properly
implementing the eligible recipient's responsibilities under
section 134, or is not making substantial progress in meeting
the purpose of this Act, based on the local adjusted levels
of performance, the eligible agency shall provide technical
assistance to the eligible recipient to assist the eligible
recipient in carrying out the improvement activities
consistent with the requirements of this Act. An eligible
recipient, in collaboration with the eligible agency, may
request that the Secretary provide additional technical
assistance.
``(4) Failure.--
``(A) In general.--If an eligible recipient fails to meet
the local adjusted levels of performance as described in
section 113(b)(4) and has not implemented an improvement plan
as described in paragraph (2), has shown no improvement
within 1 year after implementing an improvement plan as
described in paragraph (2), or has failed to meet more
[[Page S763]]
than 1 of the local adjusted levels of performance for 2 or
more consecutive years, the eligible agency may, after notice
and opportunity for a hearing, withhold from the eligible
recipient all, or a portion of, the eligible recipient's
allotment under this title.
``(B) Waiver for exceptional circumstances.--The eligible
agency may waive the sanction under this paragraph due to
exceptional or uncontrollable circumstances such as
organizational structure, or a natural disaster or a
precipitous and unforeseen decline in financial resources of
the eligible recipient.
``(5) Funds resulting from reduced allotments.--The
eligible agency shall use funds withheld under paragraph (4)
to provide (through alternative arrangements) services and
activities to students within the area served by such
recipient to meet the purpose of this Act.''.
SEC. 113. STATE LEADERSHIP ACTIVITIES.
Section 124 (20 U.S.C. 2344) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) in subsection (a), by striking ``112(a)(2)'' and
inserting ``112(a)(2)(A)'';
(3) in subsection (b)--
(A) in paragraph (1), by striking ``further learning'' and
all that follows through the semicolon and inserting
``further education, further training, or for high skill,
high wage, or high demand occupations;'';
(B) in paragraph (2), by striking subparagraphs (A) through
(C) and inserting the following:
``(A) training of career and technical education teachers,
faculty, principals, career guidance and academic counselors,
and administrators to use technology, including distance
learning;
``(B) encouraging schools to work with technology
industries to offer voluntary internships and mentoring
programs; or
``(C) encouraging lifelong learning, including through
partnerships that may involve institutions of higher
education, organizations providing career and technical
education, businesses, and communications entities;'';
(C) by striking paragraph (3) and inserting the following:
``(3) professional development programs, including
providing comprehensive professional development (including
initial teacher preparation) for career and technical
education teachers, faculty, principals, administrators, and
career guidance and academic counselors at the secondary and
postsecondary levels, that support activities described in
section 122 and--
``(A) provide in-service and pre-service training in career
and technical education programs and techniques, effective
teaching skills based on promising practices and, where
available and appropriate, scientifically based research, and
effective practices to improve parental and community
involvement;
``(B) improve student achievement in order to meet the
State adjusted levels of performance established under
section 113;
``(C) support education programs for teachers and faculty
of career and technical education in public schools and other
public school personnel who are involved in the direct
delivery of educational services to career and technical
education students to ensure that such personnel--
``(i) stay current with the needs, expectations, and
methods of industry;
``(ii) can effectively develop challenging, integrated
academic and career and technical education curriculum
jointly with academic teachers, to the extent practicable;
and
``(iii) develop a higher level of academic and industry
knowledge and skills in career and technical education; and
``(D) are integrated with the teacher certification or
licensing and professional development activities that the
State carries out under title II of the Elementary and
Secondary Education Act of 1965 and title II of the Higher
Education Act of 1965;'';
(D) in paragraph (4), by striking ``support for'' and
inserting ``supporting'';
(E) in paragraph (5), by striking ``nontraditional training
and employment'' and inserting ``nontraditional fields in
emerging and established professions, and other activities
that expose students, including special populations, to high
skill, high wage occupations'';
(F) in paragraph (6)--
(i) by inserting ``intermediaries,'' after ``labor
organizations,''; and
(ii) by inserting ``, or complete career pathways, as
described in section 122(c)(1)(A)'' after ``skills'';
(G) in paragraph (7), by striking ``and'' after the
semicolon;
(H) in paragraph (8), by striking ``wage careers.'' and
inserting ``wage, or high demand occupations; and''; and
(I) by adding at the end the following:
``(9) technical assistance for eligible recipients.'';
(4) by striking subsection (c) and inserting the following:
``(c) Permissible Uses of Funds.--The leadership activities
described in subsection (a) may include--
``(1) improvement of career guidance and academic
counseling programs that assist students in making informed
academic, and career and technical education, decisions,
including encouraging secondary and postsecondary students to
graduate with a diploma or degree, and expose students to
high skill, high wage occupations and nontraditional fields
in emerging and established professions;
``(2) establishment of agreements, including articulation
agreements, between secondary and postsecondary career and
technical education programs in order to provide
postsecondary education and training opportunities for
students participating in such career and technical education
programs, such as tech-prep programs;
``(3) support for career and technical student
organizations, especially with respect to efforts to increase
the participation of students who are members of special
populations;
``(4) support for public charter schools operating
secondary career and technical education programs;
``(5) support for career and technical education programs
that offer experience in, and understanding of, all aspects
of an industry for which students are preparing to enter;
``(6) support for family and consumer sciences programs;
``(7) support for partnerships between education and
business or business intermediaries, including cooperative
education and adjunct faculty arrangements at the secondary
and postsecondary levels;
``(8) support to improve or develop new career and
technical education courses and initiatives, including career
clusters, career academies, and distance learning, that
prepare individuals academically and technically for high
skill, high wage, or high demand occupations;
``(9) awarding incentive grants to eligible recipients for
exemplary performance in carrying out programs under this
Act, which awards shall be based on local performance
indicators, as described in section 113, in accordance with
previously publicly disclosed priorities;
``(10) providing career and technical education programs
for adults and school dropouts to complete their secondary
school education;
``(11) providing assistance to individuals, who have
participated in services and activities under this title, in
finding an appropriate job and continuing their education or
training through collaboration with the workforce investment
system established under the Workforce Investment Act of 1998
(29 U.S.C. 2801 et seq.);
``(12) developing valid and reliable assessments of
technical skills that are integrated with industry
certification assessments where available;
``(13) developing and enhancing data systems to collect and
analyze data on secondary and postsecondary academic and
employment outcomes;
``(14) improving--
``(A) the recruitment and retention of career and technical
education teachers, faculty, principals, administrators, and
career guidance and academic counselors, including
individuals in groups underrepresented in the teaching
profession; and
``(B) the transition to teaching from business and
industry, including small business; and
``(15) adopting, calculating, or commissioning a self-
sufficiency standard.''; and
(5) in subsection (d), by striking ``112(a)(2)'' and
inserting ``112(a)(2)(A)''.
SEC. 114. DISTRIBUTION OF FUNDS TO SECONDARY SCHOOL PROGRAMS.
Section 131 (20 U.S.C. 2351) is amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career'';
(2) by striking subsection (a);
(3) by redesignating subsections (b) through (i) as
subsections (a) through (h), respectively;
(4) in subsection (a) (as redesignated by paragraph (3) of
this section)--
(A) in the subsection heading, by striking ``Special
Distribution Rules for Succeeding Fiscal Years'' and
inserting ``Distribution Rules''; and
(B) by striking ``for fiscal year 2000 and succeeding
fiscal years'';
(5) in subsection (b) (as redesignated by paragraph (3) of
this section)--
(A) by striking ``subsection (b)'' and inserting
``subsection (a)''; and
(B) in paragraph (1), by striking ``9902(2))'' and
inserting ``9902(2)))'';
(6) in subsection (e) (as redesignated by paragraph (3) of
this section), in the subsection heading, by striking
``Vocational'' and inserting ``Career''; and
(7) in subsection (g) (as redesignated by paragraph (3) of
this section), by striking ``subsections (a), (b), (c), and
(d)'' and inserting ``subsections (a), (b), and (c)''.
SEC. 115. DISTRIBUTION OF FUNDS FOR POSTSECONDARY CAREER AND
TECHNICAL EDUCATION PROGRAMS.
Section 132 (20 U.S.C. 2352) is amended by striking the
section heading and inserting the following:
``SEC. 132. DISTRIBUTION OF FUNDS FOR POSTSECONDARY CAREER
AND TECHNICAL EDUCATION PROGRAMS.''.
SEC. 116. SPECIAL RULES FOR CAREER AND TECHNICAL EDUCATION.
Section 133 (20 U.S.C. 2353) is amended--
(1) by striking the section heading and inserting the
following:
``SEC. 133. SPECIAL RULES FOR CAREER AND TECHNICAL
EDUCATION.'';
and
(2) by striking ``vocational'' each place such term appears
and inserting ``career''.
SEC. 117. LOCAL PLAN FOR CAREER AND TECHNICAL EDUCATION
PROGRAMS.
Section 134 (20 U.S.C. 2354) is amended--
(1) by striking the section heading and inserting the
following:
[[Page S764]]
``SEC. 134. LOCAL PLAN FOR CAREER AND TECHNICAL EDUCATION
PROGRAMS.'';
and
(2) in subsection (b), by striking paragraphs (1) through
(10) and inserting the following:
``(1) describe how the career and technical education
programs required under section 135(b) will be carried out
with funds received under this title;
``(2) describe how the career and technical education
activities will be carried out with respect to meeting State
and local adjusted levels of performance established under
section 113;
``(3) describe how the eligible recipient will--
``(A) offer the appropriate courses of not less than 1 of
the career pathways described in section 122(c)(1)(A);
``(B) improve the academic and technical skills of students
participating in career and technical education programs by
strengthening the academic and career and technical education
components of such programs through the integration of
challenging academics with career and technical education
programs through a coherent sequence of courses to ensure
learning in the core academic subjects, and career and
technical education subjects;
``(C) provide students with strong experience in and
understanding of all aspects of an industry; and
``(D) ensure that students who participate in such career
and technical education programs are taught to the same
challenging academic proficiencies as are taught for all
other students;
``(4) describe how comprehensive professional development
will be provided that is consistent with section 122;
``(5) describe how parents, students, academic and career
and technical education teachers, faculty, principals,
administrators, career guidance and academic counselors,
representatives of tech-prep consortia (if applicable),
representatives of business (including small business) and
industry, labor organizations, representatives of special
populations, and other interested individuals are involved in
the development, implementation, and evaluation of career and
technical education programs assisted under this title, and
how such individuals and entities are effectively informed
about, and assisted in, understanding, the requirements of
this title, including career pathways;
``(6) provide assurances that the eligible recipient will
provide a career and technical education program that is of
such size, scope, and quality to bring about improvement in
the quality of career and technical education programs;
``(7) describe the process that will be used to evaluate
and continuously improve the performance of the eligible
recipient;
``(8) describe how the eligible recipient--
``(A) will review career and technical education programs,
and identify and adopt strategies to overcome barriers that
result in lowering rates of access to or lowering success in
the programs, for special populations; and
``(B) will provide programs that are designed to enable the
special populations to meet the local adjusted levels of
performance and prepare for high skill, high wage, or high
demand occupations, including those that will lead to self-
sufficiency;
``(9) describe how individuals who are members of special
populations will not be discriminated against on the basis of
their status as members of the special populations;
``(10) describe how funds will be used to promote
preparation for nontraditional fields;
``(11) describe how career guidance and academic counseling
will be provided to all career and technical education
students; and
``(12) describe efforts to improve the recruitment and
retention of career and technical education teachers,
faculty, counselors, principals, and administrators,
including individuals in groups underrepresented in the
teaching profession, and the transition to teaching from
business and industry.''.
SEC. 118. LOCAL USES OF FUNDS.
Section 135 (20 U.S.C. 2355) is amended--
(1) in subsection (a), by striking ``vocational'' and
inserting ``career'';
(2) in subsection (b)--
(A) in the matter preceding paragraph (1), by striking
``vocational'' and inserting ``career''; and
(B) by striking paragraphs (1) through (8) and inserting
the following:
``(1) strengthen the academic and career and technical
education skills of students participating in career and
technical education programs by strengthening the academic
and career and technical education components of such
programs through the integration of academics with career and
technical education programs through a coherent sequence of
courses, such as career pathways described in section
122(c)(1)(A), to ensure learning in the core academic
subjects and career and technical education subjects;
``(2) link secondary career and technical education and
postsecondary career and technical education, including by--
``(A) offering the relevant elements of not less than 1
career pathway described in section 122(c)(1)(A);
``(B) developing and supporting articulation agreements
between secondary and postsecondary institutions; or
``(C) supporting tech-prep programs and consortia;
``(3) provide students with strong experience in and
understanding of all aspects of an industry;
``(4) develop, improve, or expand the use of technology in
career and technical education, which may include--
``(A) training of career and technical education teachers,
faculty, principals, and administrators to use technology,
including distance learning; or
``(B) encouraging schools to collaborate with technology
industries to offer voluntary internships and mentoring
programs;
``(5) provide professional development programs that are
consistent with section 122 to secondary and postsecondary
teachers, faculty, principals, administrators, and career
guidance and academic counselors who are involved in
integrated career and technical education programs,
including--
``(A) in-service and pre-service training--
``(i) in career and technical education programs and
techniques;
``(ii) in effective integration of challenging academic and
career and technical education jointly with academic
teachers, to the extent practicable;
``(iii) in effective teaching skills based on research that
includes promising practices; and
``(iv) in effective practices to improve parental and
community involvement;
``(B) support of education programs that provide
information on all aspects of an industry;
``(C) internship programs that provide relevant business
experience; and
``(D) programs dedicated to the effective use of
instructional technology;
``(6) develop and implement evaluations of the career and
technical education programs carried out with funds under
this title, including an assessment of how the needs of
special populations are being met;
``(7) initiate, improve, expand, and modernize quality
career and technical education programs, including relevant
technology;
``(8) provide services and activities that are of
sufficient size, scope, and quality to be effective; and
``(9) provide activities to prepare special populations,
including single parents and displaced homemakers, for high
skill, high wage, or high demand occupations, including those
that will lead to self-sufficiency.''; and
(3) in subsection (c)--
(A) in paragraph (1), by striking ``vocational'' and
inserting ``career''; and
(B) by striking paragraphs (2) through (15) and inserting
the following:
``(2) to provide career guidance and academic counseling
that is based on current labor market indicators, as provided
pursuant to section 118, for students participating in career
and technical education programs that--
``(A) improves graduation rates and provides information on
postsecondary and career options for secondary students,
which activities may include the use of graduation and career
plans; and
``(B) provides assistance for postsecondary students,
including for adult students who are changing careers or
updating skills;
``(3) for partnerships between the eligible recipient and
businesses, including small businesses and business
intermediaries, including for--
``(A) work-related experience for students, such as
internships, cooperative education, school-based enterprises,
entrepreneurship, and job shadowing that are related to
career and technical education programs;
``(B) adjunct faculty arrangements at the secondary and
postsecondary levels; and
``(C) industry experience for teachers and faculty;
``(4) to provide programs for special populations;
``(5) to assist career and technical student organizations;
``(6) for mentoring and support services;
``(7) for leasing, purchasing, upgrading, or adapting
instructional equipment;
``(8) for teacher preparation programs that address the
integration of academic and career and technical education
and that assist individuals who are interested in becoming
career and technical education teachers and faculty,
including individuals with experience in business and
industry;
``(9) to develop and expand postsecondary program offerings
at times and in formats that are convenient and accessible
for working students, including through the use of distance
education;
``(10) for improving or developing new career and technical
education courses, including development of new career
pathways;
``(11) to develop and support small, personalized career-
themed learning communities;
``(12) to provide support for family and consumer sciences
programs;
``(13) to provide career and technical education programs
for adults and school dropouts to complete their secondary
school education or upgrade their technical skills;
``(14) to provide assistance to individuals who have
participated in services and activities under this title in
finding an appropriate job and continuing their education or
training through collaboration with the workforce investment
system established under the Workforce Investment Act of 1998
(29 U.S.C. 2801 et seq.);
``(15) to support activities in nontraditional fields, such
as mentoring and outreach; and
[[Page S765]]
``(16) to support other career and technical education
activities that are consistent with the purpose of this
Act.''.
SEC. 119. TECH-PREP EDUCATION.
(a) Redesignation.--Title II (20 U.S.C. 2371 et seq.) is
amended--
(1) by striking the title heading and inserting the
following:
``PART D--TECH-PREP EDUCATION'';
(2) by striking sections 201, 202, 206, and 207; and
(3) by redesignating sections 203, 204, 205, and 208, as
sections 141, 142, 143, and 144, respectively.
(b) State Allotment and Application.--Section 141 (as
redesignated by subsection (a) of this section) is amended--
(1) in subsection (a), by striking ``section 206'' and
inserting ``section 144''; and
(2) by striking subsection (c) and inserting the following:
``(c) State Application.--Each eligible agency desiring
assistance under this part shall submit an application to the
Secretary at such time, in such manner, and accompanied by
such information as the Secretary may require. Such
application shall describe how activities under this part
will be coordinated, to the extent practicable, with
activities described in section 122.''.
(c) Tech-Prep Education.--Section 142 (as redesignated by
subsection (a) of this section) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``section 203'' and inserting ``section
141'';
(ii) by striking ``title'' and inserting ``part'';
(iii) by striking ``vocational'' both places the term
appears and inserting ``career''; and
(iv) in subparagraph (A), by inserting ``, educational
service agency,'' after ``intermediate educational agency'';
and
(B) in paragraph (2)--
(i) in subparagraph (A), by striking ``and'';
(ii) in subparagraph (B), by striking the period at the end
and inserting a semicolon; and
(iii) by adding at the end the following:
``(C) employers, including small businesses, or business
intermediaries; and
``(D) labor organizations.'';
(2) in subsection (c)--
(A) by striking paragraph (2) and inserting the following:
``(2) consist of not less than 2 years of secondary school
with a common core of technical skills and core academic
subjects preceding graduation and 2 years or more of higher
education, or an apprenticeship program of not less than 2
years following secondary instruction, designed to lead to
technical skill proficiency, a credential, a certificate, or
a degree, in a specific career field;'';
(B) in paragraph (3)(B), by inserting ``including through
the use of articulation agreements, and'' after ``career
fields,'';
(C) by striking paragraph (4) and inserting the following:
``(4) include in-service professional development for
teachers, faculty, principals, and administrators that--
``(A) supports effective implementation of tech-prep
programs;
``(B) supports joint training in the tech-prep consortium;
``(C) supports the needs, expectations, and methods of
business and all aspects of an industry;
``(D) supports the use of contextual and applied curricula,
instruction, and assessment;
``(E) supports the use and application of technology; and
``(F) assists in accessing and utilizing data, including
labor market indicators, achievement, and assessments;'';
(D) in paragraph (5)--
(i) by striking ``training'' and inserting ``professional
development'';
(ii) in subparagraph (B), by inserting ``, which may
include through the use of graduation and career plans''
after ``programs'';
(iii) in subparagraph (D), by striking ``and'';
(iv) in subparagraph (E), by inserting ``and'' after the
semicolon; and
(v) by adding at the end the following:
``(F) provide comprehensive career guidance and academic
counseling to participating students, including special
populations;'';
(E) in paragraph (6)--
(i) by inserting ``(including pre-apprenticeship
programs)'' after ``programs''; and
(ii) by striking ``and'' after the semicolon;
(F) in paragraph (7), by striking the period at the end and
inserting ``; and''; and
(G) by adding at the end the following:
``(8) coordinate with activities conducted under this
title.''; and
(3) in subsection (d)--
(A) in paragraph (2), by striking ``and'' after the
semicolon;
(B) in paragraph (3), by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following:
``(4) improve career guidance and academic counseling for
participating students through the development and
implementation of graduation and career plans; and
``(5) develop curriculum that supports effective
transitions between secondary and postsecondary career and
technical education programs.''.
(d) Consortium Applications.--Section 143 (as redesignated
by subsection (a) of this section) is amended--
(1) in subsection (a), by striking ``title'' and inserting
``part'';
(2) in subsection (b)--
(A) by striking ``5'' and inserting ``6''; and
(B) by striking ``title'' and inserting ``part'';
(3) in subsection (d)--
(A) in paragraph (1), by inserting ``or advanced'' after
``baccalaureate'';
(B) by striking paragraph (4) and inserting the following:
``(4) provide education and training in areas or skills,
including emerging technology, in which there are significant
workforce shortages based on the data provided by the entity
in the State under section 118;'';
(C) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(D) by adding at the end the following:
``(6) demonstrate success in, or provide assurances of,
coordination and integration with eligible recipients
described in part C.''; and
(4) in subsection (e), by striking ``title'' and inserting
``part''.
(e) Authorization of Appropriations.--Section 144 (as
redesignated by subsection (a) of this section) is amended--
(1) by striking ``title (other than section 207)'' and
inserting ``part''; and
(2) by striking ``1999 and each of the 4'' and inserting
``2006 and each of the 5''.
TITLE II--GENERAL PROVISIONS
SEC. 201. REDESIGNATION OF TITLE.
(a) Federal Administrative Provisions.--Title III (20
U.S.C. 2391 et seq.) is amended by redesignating sections 311
through 318 as sections 211 through 218, respectively.
(b) State Administrative Provisions.--Title III (20 U.S.C.
2391 et seq.) is amended by redesignating sections 321
through 325 as sections 221 through 225, respectively.
(c) Title Heading.--The title heading of title III (20
U.S.C. 2391 et seq.) is amended to read as follows:
``TITLE II--GENERAL PROVISIONS''.
SEC. 202. FISCAL REQUIREMENTS.
Section 211 (as redesignated by section 201 of this Act) is
amended--
(1) by striking ``vocational'' each place the term appears
and inserting ``career''; and
(2) in subsection (b)--
(A) by striking paragraph (1) and inserting the following:
``(1) Determination.--
``(A) In general.--Except as provided in subparagraphs (B)
and (C), no payments shall be made under this Act for any
fiscal year to a State for career and technical education
programs or tech-prep programs unless the Secretary
determines that the average fiscal effort per student or the
aggregate expenditures of such State for career and technical
education programs for the 3 fiscal years preceding the
fiscal year for which the determination is made, equaled or
exceeded such effort or expenditures for career and technical
education programs, for the 3 fiscal years preceding the
fiscal year for which the determination is made.
``(B) Computation.--In computing the average fiscal effort
or aggregate expenditures pursuant to subparagraph (A), the
Secretary shall exclude capital expenditures, special one-
time project costs, and the cost of pilot programs.
``(C) Decrease in federal support.--If the amount made
available for career and technical education programs under
this Act for a fiscal year is less than the amount made
available for career and technical education programs under
this Act for the preceding fiscal year, then the average
fiscal effort per student or the aggregate expenditures of a
State required by subparagraph (A) for the 3 preceding fiscal
years shall be decreased by the same percentage as the
percentage decrease in the amount so made available.''; and
(B) in paragraph (2), by striking ``fiscal effort'' both
places the term appears and inserting ``average fiscal
effort''.
SEC. 203. VOLUNTARY SELECTION AND PARTICIPATION.
Section 214 (as redesignated by section 201 of this Act) is
amended by striking ``vocational'' both places the term
appears and inserting ``career''.
SEC. 204. LIMITATION FOR CERTAIN STUDENTS.
Section 215 (as redesignated by section 201 of this Act) is
amended by striking ``vocational'' and inserting ``career''.
SEC. 205. AUTHORIZATION OF SECRETARY; PARTICIPATION OF
PRIVATE SCHOOL PERSONNEL.
Part A of title II (as redesignated by section 201 of this
Act) is amended--
(1) by striking section 217;
(2) by redesignating section 218 as section 217; and
(3) in section 217 (as redesignated by paragraph (2) of
this section)--
(A) by inserting ``principals,'' after ``for vocational and
technical education teachers,'';
(B) by inserting ``principals,'' after ``of vocational and
technical education teachers,''; and
(C) by striking ``vocational'' each place the term appears
and inserting ``career''.
SEC. 206. STUDENT ASSISTANCE AND OTHER FEDERAL PROGRAMS.
Section 225(c) (as redesignated by section 201 of this Act)
is amended--
(1) in the subsection heading, by striking ``Vocational''
and inserting ``Career''; and
(2) by striking ``vocational'' both places the term appears
and inserting ``career''.
SEC. 207. TABLE OF CONTENTS.
Section 1(b) (20 U.S.C. 2301 note) is amended to read as
follows:
``(b) Table of Contents.--The table of contents for this
Act is as follows:
[[Page S766]]
``Sec. 1. Short title; table of contents.
``Sec. 2. Purpose.
``Sec. 3. Definitions.
``Sec. 4. Transition provisions.
``Sec. 5. Privacy.
``Sec. 6. Limitation.
``Sec. 7. Special rule.
``Sec. 8. Authorization of appropriations.
``TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES
``Part A--Allotment and Allocation
``Sec. 111. Reservations and State allotment.
``Sec. 112. Within State allocation.
``Sec. 113. Accountability.
``Sec. 114. National activities.
``Sec. 115. Assistance for the outlying areas.
``Sec. 116. Native American program.
``Sec. 117. Tribally controlled postsecondary career and technical
institutions.
``Sec. 118. Occupational and employment information.
``Part B--State Provisions
``Sec. 121. State administration.
``Sec. 122. State plan.
``Sec. 123. Improvement plans.
``Sec. 124. State leadership activities.
``Part C--Local Provisions
``Sec. 131. Distribution of funds to secondary school programs.
``Sec. 132. Distribution of funds for postsecondary career and
technical education programs.
``Sec. 133. Special rules for career and technical education.
``Sec. 134. Local plan for career and technical education programs.
``Sec. 135. Local uses of funds.
``Part D--Tech-Prep Education
``Sec. 141. State allotment and application.
``Sec. 142. Tech-prep education.
``Sec. 143. Consortium applications.
``Sec. 144. Authorization of appropriations.
``TITLE II--GENERAL PROVISIONS
``Part A--Federal Administrative Provisions
``Sec. 211. Fiscal requirements.
``Sec. 212. Authority to make payments.
``Sec. 213. Construction.
``Sec. 214. Voluntary selection and participation.
``Sec. 215. Limitation for certain students.
``Sec. 216. Federal laws guaranteeing civil rights.
``Sec. 217. Participation of private school personnel.
``Part B--State Administrative Provisions
``Sec. 221. Joint funding.
``Sec. 222. Prohibition on use of funds to induce out-of-State
relocation of businesses.
``Sec. 223. State administrative costs.
``Sec. 224. Limitation on Federal regulations.
``Sec. 225. Student assistance and other Federal programs.''.
______
By Mr. REID (for himself and Mr. Ensign):
S. 252. A bill to direct the Secretary of the Interior to convey
certain land in Washoe County, Nevada, to the Board of Regents of the
University and Community College System of Nevada; to the Committee on
Energy and Natural Resources.
Mr. REID. Mr. President, I rise today to introduce the Dandini
Research Park Transfer Act on behalf of myself and Senator Ensign. This
bill will transfer an important tract of land in Washoe County, NV, to
the University and Community College System of Nevada.
The University of Nevada holds two patents from the Bureau of Land
Management for approximately 467 acres of public land located north of
downtown Reno. In the early 1970s, the land was patented to the
university pursuant to the Recreation and Public Purposes Act. Now
known as the Dandini Research Park, it is the home of Truckee Meadows
Community College and the Desert Research Institute's Northern Nevada
Science Center.
Truckee Meadows Community College and its predecessor, Western Nevada
Community College, have provided educational programs and opportunities
to the residents of Reno, Sparks, and the surrounding communities for
over 30 years. Construction of the College's facilities on the Dandini
campus began in 1975, shortly after conveyance of the original patents.
For over 25 years the Desert Research Institute has excelled in
applied scientific research and the application of technologies to
improve people's lives in Nevada and throughout the world. Its three
core divisions of Atmospheric, Hydrologic, and Earth and Ecosystem
Sciences cooperate with two interdisciplinary centers to provide
innovative solutions to pressing environmental problems. The Center for
Arid Lands Environmental Management and the Center for Watersheds and
Environmental Sustainability apply scientific understanding to the
effective management of natural resources while addressing our needs
for economic diversification and science-based educational
opportunities. In doing so, DRI undertakes fundamental scientific
research in Nevada and around the globe. For example, as a key
participant in the U.S. Geological Survey Water Research Program, DRI
plays a critical role in identifying and helping protect the region's
scarce water resources.
DRI shares its facility with the Western Regional Climate Center, one
of six regional climate centers operating under the National Oceanic
and Atmospheric Administration's climate program. The Western Regional
Climate Center conducts applied research and provides high quality
climate data and information pertaining to the western United States.
The Desert Research Institute wishes to expand its Northern Nevada
Science Center. DRI is considering an innovative means of financing the
expansion, which would involve a private developer who would build and
finance the expansion and lease it back to DRI. The private developers
with whom DRI has discussed the proposal, as well as the Institute's
counsel, however, have pointed out that the terms of the patents and
the restrictions imposed by the Recreation and Public Purposes Act
represent obstacles to such an arrangement.
Truckee Meadows Community College and the Northern Nevada Science
Center are exceptional assets of the scientific and educational
community in the Truckee Meadows. The Center serves not only the
citizens of Washoe County, but the needs of all Nevadans and the
western United States as well. It deserves the opportunity to grow and
prosper with the community--one of the fastest-growing communities in
the Nation.
The bill Senator Ensign and I present to you today simply directs the
Secretary of the Interior to convey this property from the Bureau of
Land Management to the University and Community College System of
Nevada. Because of the overwhelming public benefit provided by the
Center, we ask that the land be conveyed for free, but that the
University cover the costs of the transaction.
During the 108th Congress this legislation received strong support
from my colleagues and was passed by both the Energy and Natural
Resources Committee and the Senate as a whole. I look forward to
working with my fellow senators during this session to usher this
important legislation towards final passage.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 252
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Dandini Research Park
Conveyance Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Board of regents.--The term ``Board of Regents'' means
the Board of Regents of the University and Community College
System of Nevada.
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 3. CONVEYANCE TO THE UNIVERSITY AND COMMUNITY COLLEGE
SYSTEM OF NEVADA.
(a) Conveyance.--
(1) In general.--The Secretary shall convey to the Board of
Regents, without consideration, all right, title, and
interest of the United States in and to the approximately 467
acres of land located in Washoe County, Nevada, patented to
the University of Nevada under the Act of June 14, 1926
(commonly known as the ``Recreation and Public Purposes
Act'') (43 U.S.C. 869 et seq.), and described in paragraph
(2).
(2) Description of land.--The land referred to in paragraph
(1) is--
(A) the parcel of land consisting of approximately 309.11
acres and more particularly described as T. 20 N., R. 19 E.,
Sec. 25, lots 1, 2, 3, 4, 5, and 11, SE\1/4\NW\1/4\, NE\1/
4\SW\1/4\, Mount Diablo Meridian, Nevada; and
(B) the parcel of land consisting of approximately 158.22
acres and more particularly described as T. 20 N., R. 19 E.,
Sec. 25, lots 6 and 7, SW\1/4\NE\1/4\, NW\1/4\SE\1/4\, Mount
Diablo Meridian, Nevada.
(b) Costs.--The Board of Regents shall pay to the United
States an amount equal to the
[[Page S767]]
costs of the Secretary associated with the conveyance under
subsection (a)(1).
(c) Conditions.--If the Board of Regents sells any portion
of the land conveyed to the Board of Regents under subsection
(a)(1)--
(1) the amount of consideration for the sale shall reflect
fair market value, as determined by an appraisal; and
(2) the Board of Regents shall pay to the Secretary an
amount equal to the net proceeds of the sale, for use by the
Director of the Bureau of Land Management in the State of
Nevada, without further appropriation.
______
By Mr. REID (for himself and Mr. Ensign):
S. 253. A bill to direct the Secretary of the Interior to convey
certain land to the Edward H. McDaniel American Legion Post No. 22 in
Pahrump, Nevada, for the construction of a post building and memorial
park for use by the American Legion, other veterans' groups, and the
local community; to the Committee on Energy and Natural Resources.
Mr. REID. Mr. President, I rise today to introduce the Pahrump
American Legion Post Land Conveyance Act for myself and Senator Ensign.
This Act will transfer approximately 5 acres of BLM land in Pahrump,
NV, to the American Legion for the purpose of constructing a post home
and other facilities that will benefit veterans' groups and the local
community.
The American Legion and other non-profit organizations that represent
our Nation's veterans in the vicinity of Pahrump have tripled in size
over the last 10 years. The local memberships of the American Legion,
the Veterans of Foreign Wars, and the Disabled American Veterans will
soon exceed 1,000 members, and these groups will continue to expand as
Pahrump draws more and more new residents.
The existing facility used by the veterans in Pahrump was built by
the Veterans of Foreign Wars in the 1960s. It is much too small and not
at all adequate for the veterans' current needs. The nearest facility
that can accommodate them is located in Las Vegas more than 60 miles
away.
The Pahrump American Legion would like to build a post building,
veterans' garden, and memorial park. These new facilities would benefit
not only the local veterans, but would be made available--at no cost--
for community activities. The American Legion has tried for over six
years to acquire a suitable tract of land to provide a home for a new
veterans center. The Legion started a pledge campaign and raised over
$16,000 for the building fund before the parcel of land they sought to
acquire was removed from consideration by the BLM. Unfortunately, other
tracts of land that might represent alternative sites in Pahrump are
not suitable.
This situation is truly regrettable. Without a home, the Pahrump
American Legion Post can't offer the kind of services and programs that
the veterans in the area deserve. Our veterans aren't the only ones who
are suffering, either. All across the United States, the American
Legion is deservedly famous for supporting community activities like
the Boy Scouts and Girl Scouts, as well as the National Oratorical
Contest, American Legion Baseball, Girls and Boys State, and other
activities for young people. All of these worthy groups and projects
would benefit from the construction of a new post home, and from the
conveyance of this small parcel of federal land. In sum, this bill is
good for veterans, good for kids, and good for hard-working Nevada
families.
Our bill simply directs the Secretary of the Interior to convey this
property from the Bureau of Land Management to American Legion ``Edward
H McDaniel'' Post No. 22 in Pahrump. Because of the great public
benefit such a facility will provide, we ask that the land be conveyed
for free, but that the American Legion cover the costs of the
transaction.
I was pleased that my distinguished colleagues recognized the value
of this legislation during the 108th Congress and supported its passage
by the Energy and Natural Resources Committee and by the Senate as a
whole. I look forward to working with my friends to move this bill in a
timely manner during the current session.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 253
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Edward H. McDaniel American
Legion Post No. 22 Land Conveyance Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Post no. 22.--The term ``Post No. 22'' means the Edward
H. McDaniel American Legion Post No. 22 in Pahrump, Nevada.
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the Bureau of
Land Management.
SEC. 3. CONVEYANCE OF LAND TO EDWARD H. MCDANIEL AMERICAN
LEGION POST NO. 22.
(a) Conveyance on Condition Subsequent.--Not later than 180
days after the date of enactment of this Act, subject to
valid existing rights and the condition stated in subsection
(c) and in accordance with the Act of June 14, 1926 (commonly
known as the ``Recreation and Public Purposes Act'') (43
U.S.C. 869 et seq.), the Secretary shall convey to Post No.
22, for no consideration, all right, title, and interest of
the United States in and to the parcel of land described in
subsection (b).
(b) Description of Land.--The parcel of land referred to in
subsection (b) is the parcel of Bureau of Land Management
land that--
(1) is bounded by Route 160, Bride Street, and Dandelion
Road in Nye County, Nevada;
(2) consists of approximately 4.5 acres of land; and
(3) is more particularly described as a portion of the S
\1/4\ of section 29, T. 20 S., R. 54 E., Mount Diablo and
Base Meridian.
(c) Condition on Use of Land.--
(1) In general.--Post No. 22 and any successors of Post No.
22 shall use the parcel of land described in section (b) for
the construction and operation of a post building and
memorial park for use by Post No. 22, other veterans groups,
and the local community for events and activities.
(2) Reversion.--Except as provided in paragraph (3), if the
Secretary, after notice to Post No. 22 and an opportunity for
a hearing, makes a finding that Post No. 22 has used or
permitted the use of the parcel for any purpose other than
the purpose specified in paragraph (1) and Post No. 22 fails
to discontinue that use, title to the parcel shall revert to
the United States, to be administered by the Secretary.
(3) Waiver.--The Secretary may waive the requirements of
paragraph (2) if the Secretary determines that a waiver would
be in the best interests of the United States.
______
By Mr. REID (for himself and Mr. Ensign):
S. 254. A bill to direct the Secretary of the Interior to convey
certain land to Lander County, Nevada, and the Secretary of the
Interior to convey certain land to Eureka County, Nevada, for continued
use as cemeteries; to the Committee on Energy' and Natural Resources.
Mr. REID. Mr. President, I rise today for myself and Senator Ensign
to introduce this bill, which will address a long standing public land
issue in central Nevada. As you may know, the Federal Government
controls over 87 percent of the lands in the State of Nevada. This
means that Nevadans must frequently seek the assistance of Congress to
deal with land issues that would otherwise be relatively uncomplicated.
Today we offer a bill to address a simple land ownership issue in
Lander and Eureka Counties.
This bill would convey two small cemeteries in central Nevada from
federal control back to the local communities to which they should
belong. The cemeteries in question the Kingston Cemetery in Lander
County and the Maiden's Grave Cemetery in Eureka County--were first
established by pioneers and immigrants who settled the isolated high
desert valleys of the Great Basin in the mid-1800s. These same pioneers
created the Kingston and Maiden's Grave cemeteries to serve as sacred
resting places for friends and family. Unfortunately, years after their
founding, the private nature of these lands was overlooked and the
cemeteries were placed in the hands of federal land management
agencies. Today much of the original Kingston Cemetery is on land
managed by the U.S. Forest Service and the Maiden's Grave Cemetery in
Beowawe sits on land managed by the Bureau of Land Management.
Under current law, these agencies must sell the cemeteries back to
the communities at fair market value. However, these historic
cemeteries were established prior to the designation of the Federal
agencies that now manage them. For years, Lander County has been
required to lease much of the Kingston Cemetery from the Forest
[[Page S768]]
Service. The Forest Service previously sold approximately 1 acre to the
Town of Kingston, but this land transfer did not allow for the
protection of uncharted graves or for the implementation of the
communty' s original site plan.
Because the people of Beowawe and Kingston should not have to buy or
lease cemeteries that are rightfully theirs, our bill provides for the
simple conveyance of the Maiden's Grave Cemetery to Eureka County and
the balance of the original location of the Kingston Cemetery to Lander
County, NV. The conveyances provided by this bill will benefit our
federal land managers as well as our rural communities. The disposal of
these small parcels of land for no consideration will benefit the
United States because they represent isolated tracts that prove
difficult to manage for public use.
In the 108th Congress I was pleased that this bill received approval
from the Energy and Natural Resources Committee and from the Senate as
a whole. I look forward to working with my colleagues to complete this
small conveyance during the current Congress. It is time that we
restore ownership of these two small rural cemeteries to the
communities to which they rightfully belong.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 254
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Central Nevada Rural
Cemeteries Act''.
SEC. 2. CONVEYANCE TO LANDER COUNTY, NEVADA.
(a) Findings.--Congress finds that--
(1) the historical use by settlers and travelers since the
late 1800's of the cemetery known as ``Kingston Cemetery'' in
Kingston, Nevada, predates incorporation of the land within
the jurisdiction of the Forest Service on which the cemetery
is situated;
(2) it is appropriate that that use be continued through
local public ownership of the parcel rather than through the
permitting process of the Federal agency;
(3) in accordance with Public Law 85-569 (commonly known as
the ``Townsite Act'') (16 U.S.C. 478a), the Forest Service
has conveyed to the Town of Kingston 1.25 acres of the land
on which historic gravesites have been identified; and
(4) to ensure that all areas that may have unmarked
gravesites are included, and to ensure the availability of
adequate gravesite space in future years, an additional
parcel consisting of approximately 8.75 acres should be
conveyed to the county so as to include the total amount of
the acreage included in the original permit issued by the
Forest Service for the cemetery.
(b) Conveyance on Condition Subsequent.--Subject to valid
existing rights and the condition stated in subsection (e),
the Secretary of Agriculture, acting through the Chief of the
Forest Service (referred to in this section as the
``Secretary''), not later than 90 days after the date of
enactment of this Act, shall convey to Lander County, Nevada
(referred to in this section as the ``county''), for no
consideration, all right, title, and interest of the United
States in and to the parcel of land described in subsection
(c).
(c) Description of Land.--The parcel of land referred to in
subsection (b) is the parcel of National Forest System land
(including any improvements on the land) known as ``Kingston
Cemetery'', consisting of approximately 10 acres and more
particularly described as SW\1/4\SE\1/4\SE\1/4\ of section
36, T. 16N., R. 43E., Mount Diablo Meridian.
(d) Easement.--At the time of the conveyance under
subsection (b), subject to subsection (e)(2), the Secretary
shall grant the county an easement allowing access for
persons desiring to visit the cemetery and other cemetery
purposes over Forest Development Road #20307B,
notwithstanding any future closing of the road for other use.
(e) Condition on Use of Land.--
(1) In general.--The county (including its successors)
shall continue the use of the parcel conveyed under
subsection (b) as a cemetery.
(2) Reversion.--If the Secretary, after notice to the
county and an opportunity for a hearing, makes a finding that
the county has used or permitted the use of the parcel for
any purpose other than the purpose specified in paragraph
(1), and the county fails to discontinue that use--
(A) title to the parcel shall revert to the Secretary, to
be administered by the Secretary; and
(B) the easement granted to the county under subsection (d)
shall be revoked.
(3) Waiver.--The Secretary may waive the application of
subparagraph (A) or (B) of paragraph (2) if the Secretary
determines that a waiver would be in the best interests of
the United States.
SEC. 3. CONVEYANCE TO EUREKA COUNTY, NEVADA.
(a) Findings.--Congress finds that--
(1) the historical use by settlers and travelers since the
late 1800's of the cemetery known as ``Maiden's Grave
Cemetery'' in Beowawe, Nevada, predates incorporation of the
land within the jurisdiction of the Bureau of Land Management
on which the cemetery is situated; and
(2) it is appropriate that that use be continued through
local public ownership of the parcel rather than through the
permitting process of the Federal agency.
(b) Conveyance on Condition Subsequent.--Subject to valid
existing rights and the condition stated in subsection (e),
the Secretary of the Interior, acting through the Director of
the Bureau of Land Management (referred to in this section as
the ``Secretary''), not later than 90 days after the date of
enactment of this Act, shall convey to Eureka County, Nevada
(referred to in this section as the ``county''), for no
consideration, all right, title, and interest of the United
States in and to the parcel of land described in subsection
(c).
(c) Description of Land.--The parcel of land referred to in
subsection (b) is the parcel of public land (including any
improvements on the land) known as ``Maiden's Grave
Cemetery'', consisting of approximately 10 acres and more
particularly described as S\1/2\NE\1/4\SW\1/4\SW\1/4\, N\1/
2\SE\1/4\SW\1/4\SW\1/4\ of section 10, T.31N., R.49E., Mount
Diablo Meridian.
(d) Easement.--At the time of the conveyance under
subsection (b), subject to subsection (e)(2), the Secretary
shall grant the county an easement allowing access for
persons desiring to visit the cemetery and other cemetery
purposes over an appropriate access route consistent with
current access.
(e) Condition on Use of Land.--
(1) In general.--The county (including its successors)
shall continue the use of the parcel conveyed under
subsection (b) as a cemetery.
(2) Reversion.--If the Secretary, after notice to the
county and an opportunity for a hearing, makes a finding that
the county has used or permitted the use of the parcel for
any purpose other than the purpose specified in paragraph
(1), and the county fails to discontinue that use--
(A) title to the parcel shall revert to the Secretary, to
be administered by the Secretary; and
(B) the easement granted to the county under subsection (d)
shall be revoked.
(3) Waiver.--The Secretary may waive the application of
subparagraph (A) or (B) of paragraph (2) if the Secretary
determines that a waiver would be in the best interests of
the United States.
______
By Mr. GRASSLEY (for himself, Mr. Hatch, Mr. Sessions, Mr. Thune,
Mr. Carper, Mr. Nelson of Nebraska, Mr. Shelby, and Mr. Enzi):
S. 256. A bill to amend title 11 of the United States Code, and for
other purposes; to the Committee on the Judiciary.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of
this bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 256
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; references; table of contents.
TITLE I--NEEDS-BASED BANKRUPTCY
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Sense of Congress and study.
Sec. 104. Notice of alternatives.
Sec. 105. Debtor financial management training test program.
Sec. 106. Credit counseling.
Sec. 107. Schedules of reasonable and necessary expenses.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation agreement practices.
Sec. 204. Preservation of claims and defenses upon sale of predatory
loans.
Sec. 205. GAO study and report on reaffirmation agreement process.
Subtitle B--Priority Child Support
Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases
involving domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation
proceedings.
[[Page S769]]
Sec. 215. Nondischargeability of certain debts for alimony,
maintenance, and support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential
transfer motions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and
loans.
Subtitle C--Other Consumer Protections
Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Protection of personally identifiable information.
Sec. 232. Consumer privacy ombudsman.
Sec. 233. Prohibition on disclosure of name of minor children.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not
complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. Reduction of homestead exemption for fraud.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide
required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the
plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the
Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitations on homestead exemption.
Sec. 323. Excluding employee benefit plan participant contributions and
other property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy
professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
Sec. 329. Clarification of postpetition wages and benefits.
Sec. 330. Delay of discharge during pendency of certain proceedings.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
Sec. 401. Adequate protection for investors.
Sec. 402. Meetings of creditors and equity security holders.
Sec. 403. Protection of refinance of security interest.
Sec. 404. Executory contracts and unexpired leases.
Sec. 405. Creditors and equity security holders committees.
Sec. 406. Amendment to section 546 of title 11, United States Code.
Sec. 407. Amendments to section 330(a) of title 11, United States Code.
Sec. 408. Postpetition disclosure and solicitation.
Sec. 409. Preferences.
Sec. 410. Venue of certain proceedings.
Sec. 411. Period for filing plan under chapter 11.
Sec. 412. Fees arising from certain ownership interests.
Sec. 413. Creditor representation at first meeting of creditors.
Sec. 414. Definition of disinterested person.
Sec. 415. Factors for compensation of professional persons.
Sec. 416. Appointment of elected trustee.
Sec. 417. Utility service.
Sec. 418. Bankruptcy fees.
Sec. 419. More complete information regarding assets of the estate.
Subtitle B--Small Business Bankruptcy Provisions
Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment
of trustee.
Sec. 443. Study of operation of title 11, United States Code, with
respect to small businesses.
Sec. 444. Payment of interest.
Sec. 445. Priority for administrative expenses.
Sec. 446. Duties with respect to a debtor who is a plan administrator
of an employee benefit plan.
Sec. 447. Appointment of committee of retired employees.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI--BANKRUPTCY DATA
Sec. 601. Improved bankruptcy statistics.
Sec. 602. Uniform rules for the collection of bankruptcy data.
Sec. 603. Audit procedures.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.
TITLE VII--BANKRUPTCY TAX PROVISIONS
Sec. 701. Treatment of certain liens.
Sec. 702. Treatment of fuel tax claims.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Priority of tax claims.
Sec. 706. Priority property taxes incurred.
Sec. 707. No discharge of fraudulent taxes in chapter 13.
Sec. 708. No discharge of fraudulent taxes in chapter 11.
Sec. 709. Stay of tax proceedings limited to prepetition taxes.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
Sec. 719. Special provisions related to the treatment of State and
local taxes.
Sec. 720. Dismissal for failure to timely file tax returns.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Other amendments to titles 11 and 28, United States Code.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
Sec. 901. Treatment of certain agreements by conservators or receivers
of insured depository institutions.
Sec. 902. Authority of the FDIC and NCUAB with respect to failed and
failing institutions.
Sec. 903. Amendments relating to transfers of qualified financial
contracts.
Sec. 904. Amendments relating to disaffirmance or repudiation of
qualified financial contracts.
Sec. 905. Clarifying amendment relating to master agreements.
Sec. 906. Federal Deposit Insurance Corporation Improvement Act of
1991.
Sec. 907. Bankruptcy law amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.
TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN
Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
Sec. 1004. Definition of family farmer.
Sec. 1005. Elimination of requirement that family farmer and spouse
receive over 50 percent of income from farming operation
in year prior to bankruptcy.
Sec. 1006. Prohibition of retroactive assessment of disposable income.
Sec. 1007. Family fishermen.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1101. Definitions.
[[Page S770]]
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health
care business and other administrative expenses.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Exclusion from program participation not subject to
automatic stay.
TITLE XII--TECHNICAL AMENDMENTS
Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Effect of conversion.
Sec. 1208. Allowance of administrative expenses.
Sec. 1209. Exceptions to discharge.
Sec. 1210. Effect of discharge.
Sec. 1211. Protection against discriminatory treatment.
Sec. 1212. Property of the estate.
Sec. 1213. Preferences.
Sec. 1214. Postpetition transactions.
Sec. 1215. Disposition of property of the estate.
Sec. 1216. General provisions.
Sec. 1217. Abandonment of railroad line.
Sec. 1218. Contents of plan.
Sec. 1219. Bankruptcy cases and proceedings.
Sec. 1220. Knowing disregard of bankruptcy law or rule.
Sec. 1221. Transfers made by nonprofit charitable corporations.
Sec. 1222. Protection of valid purchase money security interests.
Sec. 1223. Bankruptcy Judgeships.
Sec. 1224. Compensating trustees.
Sec. 1225. Amendment to section 362 of title 11, United States Code.
Sec. 1226. Judicial education.
Sec. 1227. Reclamation.
Sec. 1228. Providing requested tax documents to the court.
Sec. 1229. Encouraging creditworthiness.
Sec. 1230. Property no longer subject to redemption.
Sec. 1231. Trustees.
Sec. 1232. Bankruptcy forms.
Sec. 1233. Direct appeals of bankruptcy matters to courts of appeals.
Sec. 1234. Involuntary cases.
Sec. 1235. Federal election law fines and penalties as nondischargeable
debt.
TITLE XIII--CONSUMER CREDIT DISCLOSURE
Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a
dwelling.
Sec. 1303. Disclosures related to ``introductory rates''.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance
charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent
students.
Sec. 1309. Clarification of clear and conspicuous.
TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE
Sec. 1401. Employee wage and benefit priorities.
Sec. 1402. Fraudulent transfers and obligations.
Sec. 1403. Payment of insurance benefits to retired employees.
Sec. 1404. Effective date; application of amendments.
TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 1501. Effective date; application of amendments.
Sec. 1502. Technical corrections.
TITLE I--NEEDS-BASED BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is amended
by inserting ``or consents to'' after ``requests''.
SEC. 102. DISMISSAL OR CONVERSION.
(a) In General.--Section 707 of title 11, United States
Code, is amended--
(1) by striking the section heading and inserting the
following:
``Sec. 707. Dismissal of a case or conversion to a case under
chapter 11 or 13'';
and
(2) in subsection (b)--
(A) by inserting ``(1)'' after ``(b)'';
(B) in paragraph (1), as so 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 ``trustee (or bankruptcy administrator, if
any), or'';
(II) by inserting ``, or, with the debtor's consent,
convert such a case to a case under chapter 11 or 13 of this
title,'' after ``consumer debts''; and
(III) by striking ``a substantial abuse'' and inserting
``an abuse''; and
(ii) by striking the next to last sentence; and
(C) by adding at the end the following:
``(2)(A)(i) In considering under paragraph (1) whether the
granting of relief would be an abuse of the provisions of
this chapter, the court shall presume abuse exists if the
debtor's current monthly income reduced by the amounts
determined under clauses (ii), (iii), and (iv), and
multiplied by 60 is not less than the lesser of--
``(I) 25 percent of the debtor's nonpriority unsecured
claims in the case, or $6,000, whichever is greater; or
``(II) $10,000.
``(ii)(I) 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
actual monthly expenses for the categories specified 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 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. Notwithstanding
any other provision of this clause, the monthly expenses of
the debtor shall not include any payments for debts. In
addition, the debtor's monthly expenses shall include the
debtor's reasonably necessary expenses incurred to maintain
the safety of the debtor and the family of the debtor from
family violence as identified under section 309 of the Family
Violence Prevention and Services Act, or other applicable
Federal law. The expenses included in the debtor's monthly
expenses described in the preceding sentence shall be kept
confidential by the court. In addition, if it is demonstrated
that it is reasonable and necessary, the debtor's monthly
expenses may also include an additional allowance for food
and clothing of up to 5 percent of the food and clothing
categories as specified by the National Standards issued by
the Internal Revenue Service.
``(II) In addition, the debtor's monthly expenses may
include, if applicable, the continuation of actual expenses
paid by the debtor that are reasonable and necessary for care
and support of an elderly, chronically ill, or disabled
household member or member of the debtor's immediate family
(including parents, grandparents, siblings, children, and
grandchildren of the debtor, the dependents of the debtor,
and the spouse of the debtor in a joint case who is not a
dependent) and who is unable to pay for such reasonable and
necessary expenses.
``(III) In addition, for a debtor eligible for chapter 13,
the debtor's monthly expenses may include the actual
administrative expenses of administering a chapter 13 plan
for the district in which the debtor resides, up to an amount
of 10 percent of the projected plan payments, as determined
under schedules issued by the Executive Office for United
States Trustees.
``(IV) In addition, the debtor's monthly expenses may
include the actual expenses for each dependent child less
than 18 years of age, not to exceed $1,500 per year per
child, to attend a private or public elementary or secondary
school if the debtor provides documentation of such expenses
and a detailed explanation of why such expenses are
reasonable and necessary, and why such expenses are not
already accounted for in the National Standards, Local
Standards, or Other Necessary Expenses referred to in
subclause (I).
``(V) In addition, the debtor's monthly expenses may
include an allowance for housing and utilities, in excess of
the allowance specified by the Local Standards for housing
and utilities issued by the Internal Revenue Service, based
on the actual expenses for home energy costs if the debtor
provides documentation of such actual expenses and
demonstrates that such actual expenses are reasonable and
necessary.
``(iii) The debtor's average monthly payments on account of
secured debts shall be calculated as the sum of--
``(I) the total of all amounts scheduled as contractually
due to secured creditors in each month of the 60 months
following the date of the petition; and
``(II) any additional payments to secured creditors
necessary for the debtor, in filing a plan under chapter 13
of this title, to maintain possession of the debtor's primary
residence, motor vehicle, or other property necessary for the
support of the debtor and the debtor's dependents, that
serves as collateral for secured debts;
divided by 60.
``(iv) The debtor's expenses for payment of all priority
claims (including priority child support and alimony claims)
shall be calculated as the total amount of debts entitled to
priority, divided by 60.
``(B)(i) In any proceeding brought under this subsection,
the presumption of abuse may only be rebutted by
demonstrating special circumstances that justify additional
expenses or adjustments of current monthly income for which
there is no reasonable alternative.
``(ii) In order to establish special circumstances, the
debtor shall be required to itemize each additional expense
or adjustment of income and to provide--
``(I) documentation for such expense or adjustment to
income; and
``(II) a detailed explanation of the special circumstances
that make such expenses or adjustment to income necessary and
reasonable.
``(iii) The debtor shall attest under oath to the accuracy
of any information provided to demonstrate that additional
expenses or adjustments to income are required.
[[Page S771]]
``(iv) The presumption of abuse may only be rebutted if the
additional expenses or adjustments to income referred to in
clause (i) cause the product of the debtor's current monthly
income reduced by the amounts determined under clauses (ii),
(iii), and (iv) of subparagraph (A) when multiplied by 60 to
be less than the lesser of--
``(I) 25 percent of the debtor's nonpriority unsecured
claims, or $6,000, whichever is greater; or
``(II) $10,000.
``(C) As part of the schedule of current income and
expenditures required under section 521, the debtor shall
include a statement of the debtor's current monthly income,
and the calculations that determine whether a presumption
arises under subparagraph (A)(i), that show how each such
amount is calculated.
``(3) In considering under paragraph (1) whether the
granting of relief would be an abuse of the provisions of
this chapter in a case in which the presumption in
subparagraph (A)(i) of such paragraph does not arise or is
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) The court, on its own initiative or on the motion
of a party in interest, in accordance with the procedures
described in rule 9011 of the Federal Rules of Bankruptcy
Procedure, may order the attorney for the debtor to reimburse
the trustee for all reasonable costs in prosecuting a motion
filed under section 707(b), including reasonable attorneys'
fees, if--
``(i) a trustee files a motion for dismissal or conversion
under this subsection; and
``(ii) the court--
``(I) grants such motion; and
``(II) finds that the action of the attorney for the debtor
in filing a case under this chapter violated rule 9011 of the
Federal Rules of Bankruptcy Procedure.
``(B) If the court finds that the attorney for the debtor
violated rule 9011 of the Federal Rules of Bankruptcy
Procedure, the court, on its own initiative or on the motion
of a party in interest, in accordance with such procedures,
may order--
``(i) the assessment of an appropriate civil penalty
against the attorney for the debtor; and
``(ii) the payment of such civil penalty to the trustee,
the United States trustee (or the bankruptcy administrator,
if any).
``(C) The signature of an attorney on a petition, pleading,
or written motion shall constitute a certification that the
attorney has--
``(i) performed a reasonable investigation into the
circumstances that gave rise to the petition, pleading, or
written motion; and
``(ii) determined that the petition, pleading, or written
motion--
``(I) is well grounded in fact; and
``(II) is warranted by existing law or a good faith
argument for the extension, modification, or reversal of
existing law and does not constitute an abuse under paragraph
(1).
``(D) The signature of an attorney on the petition shall
constitute a certification that the attorney has no knowledge
after an inquiry that the information in the schedules filed
with such petition is incorrect.
``(5)(A) Except as provided in subparagraph (B) and subject
to paragraph (6), the court, on its own initiative or on the
motion of a party in interest, in accordance with the
procedures described in rule 9011 of the Federal Rules of
Bankruptcy Procedure, may award a debtor all reasonable costs
(including reasonable attorneys' fees) in contesting a motion
filed by a party in interest (other than a trustee or United
States trustee (or bankruptcy administrator, if any)) under
this subsection if--
``(i) the court does not grant the motion; and
``(ii) the court finds that--
``(I) the position of the party that filed the motion
violated rule 9011 of the Federal Rules of Bankruptcy
Procedure; or
``(II) the attorney (if any) who filed the motion did not
comply with the requirements of clauses (i) and (ii) of
paragraph (4)(C), and the motion was made solely for the
purpose of coercing a debtor into waiving a right guaranteed
to the debtor under this title.
``(B) A small business that has a claim of an aggregate
amount less than $1,000 shall not be subject to subparagraph
(A)(ii)(I).
``(C) For purposes of this paragraph--
``(i) the term `small business' means an unincorporated
business, partnership, corporation, association, or
organization that--
``(I) has fewer than 25 full-time employees as determined
on the date on which the motion is filed; and
``(II) is engaged in commercial or business activity; and
``(ii) the number of employees of a wholly owned subsidiary
of a corporation includes the employees of--
``(I) a parent corporation; and
``(II) any other subsidiary corporation of the parent
corporation.
``(6) Only the judge or United States trustee (or
bankruptcy administrator, if any) may file a motion under
section 707(b), if the current monthly income of the debtor,
or in a joint case, the debtor and the debtor's spouse, as of
the date of the order for relief, when multiplied by 12, is
equal to or less than--
``(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1
earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the
applicable State for a family of the same number or fewer
individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus
$525 per month for each individual in excess of 4.
``(7)(A) No judge, United States trustee (or bankruptcy
administrator, if any), trustee, or other party in interest
may file a motion under paragraph (2) 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
equal to or less than--
``(i) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1
earner;
``(ii) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the
applicable State for a family of the same number or fewer
individuals; or
``(iii) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus
$525 per month for each individual in excess of 4.
``(B) In a case that is not a joint case, current monthly
income of the debtor's spouse shall not be considered for
purposes of subparagraph (A) if--
``(i)(I) the debtor and the debtor's spouse are separated
under applicable nonbankruptcy law; or
``(II) the debtor and the debtor's spouse are living
separate and apart, other than for the purpose of evading
subparagraph (A); and
``(ii) the debtor files a statement under penalty of
perjury--
``(I) specifying that the debtor meets the requirement of
subclause (I) or (II) of clause (i); and
``(II) disclosing the aggregate, or best estimate of the
aggregate, amount of any cash or money payments received from
the debtor's spouse attributed to the debtor's current
monthly income.''.
(b) Definition.--Section 101 of title 11, United States
Code, is amended by inserting after paragraph (10) the
following:
``(10A) `current monthly income'--
``(A) means the average monthly income from all sources
that the debtor receives (or in a joint case the debtor and
the debtor's spouse receive) without regard to whether such
income is taxable income, derived during the 6-month period
ending on--
``(i) the last day of the calendar month immediately
preceding the date of the commencement of the case if the
debtor files the schedule of current income required by
section 521(a)(1)(B)(ii); or
``(ii) the date on which current income is determined by
the court for purposes of this title if the debtor does not
file the schedule of current income required by section
521(a)(1)(B)(ii); and
``(B) includes any amount paid by any entity other than the
debtor (or in a joint case the debtor and the debtor's
spouse), on a regular basis for 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
benefits received under the Social Security Act, payments to
victims of war crimes or crimes against humanity on account
of their status as victims of such crimes, and payments to
victims of international terrorism (as defined in section
2331 of title 18) or domestic terrorism (as defined in
section 2331 of title 18) on account of their status as
victims of such terrorism;''.
(c) United States Trustee and Bankruptcy Administrator
Duties.--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 a debtor who is an individual in a
case under this chapter--
``(A) the United States trustee (or the bankruptcy
administrator, if any) shall review all materials filed by
the debtor and, not later than 10 days after the date of the
first meeting of creditors, file with the court a statement
as to whether the debtor's case would be presumed to be an
abuse under section 707(b); and
``(B) not later than 5 days after receiving a statement
under subparagraph (A), the court shall provide a copy of the
statement to all creditors.
``(2) The United States trustee (or bankruptcy
administrator, if any) shall, not later than 30 days after
the date of filing a statement under paragraph (1), either
file a motion to dismiss or convert under section 707(b) or
file a statement setting forth the reasons the United States
trustee (or the bankruptcy administrator, if any) does not
consider such a motion to be appropriate, if the United
States trustee (or the bankruptcy administrator, if any)
determines that the debtor's case should be presumed to be an
abuse under section 707(b) and the product of the debtor's
current monthly income, multiplied by 12 is not less than--
``(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1
earner; or
``(B) in the case of a debtor in a household of 2 or more
individuals, the highest median family income of the
applicable State for a
[[Page S772]]
family of the same number or fewer individuals.''.
(d) Notice.--Section 342 of title 11, United States Code,
is amended by adding at the end the following:
``(d) In a case under chapter 7 of this title in which the
debtor is an individual and in which the presumption of abuse
arises under section 707(b), the clerk shall give written
notice to all creditors not later than 10 days after the date
of the filing of the petition that the presumption of abuse
has arisen.''.
(e) Nonlimitation of Information.--Nothing in this title
shall limit the ability of a creditor to provide information
to a judge (except for information communicated ex parte,
unless otherwise permitted by applicable law), United States
trustee (or bankruptcy administrator, if any), or trustee.
(f) Dismissal for Certain Crimes.--Section 707 of title 11,
United States Code, is amended by adding at the end the
following:
``(c)(1) In this subsection--
``(A) the term `crime of violence' has the meaning given
such term in section 16 of title 18; and
``(B) the term `drug trafficking crime' has the meaning
given such term in section 924(c)(2) of title 18.
``(2) Except as provided in paragraph (3), after notice and
a hearing, the court, on a motion by the victim of a crime of
violence or a drug trafficking crime, may when it is in the
best interest of the victim dismiss a voluntary case filed
under this chapter by a debtor who is an individual if such
individual was convicted of such crime.
``(3) The court may not dismiss a case under paragraph (2)
if the debtor establishes by a preponderance of the evidence
that the filing of a case under this chapter is necessary to
satisfy a claim for a domestic support obligation.''.
(g) Confirmation of Plan.--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
a semicolon; and
(3) by inserting after paragraph (6) the following:
``(7) the action of the debtor in filing the petition was
in good faith;''.
(h) Applicability of Means Test to Chapter 13.--Section
1325(b) of title 11, United States Code, is amended--
(1) in paragraph (1)(B), by inserting ``to unsecured
creditors'' after ``to make payments''; and
(2) by striking paragraph (2) and inserting the following:
``(2) For purposes of this subsection, the term `disposable
income' means current monthly income 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 to the extent reasonably
necessary to be expended for such child) less amounts
reasonably necessary to be expended--
``(A)(i) for the maintenance or support of the debtor or a
dependent of the debtor, or for a domestic support
obligation, that first becomes payable after the date the
petition is filed; and
``(ii) for charitable contributions (that meet the
definition of `charitable contribution' under section
548(d)(3) to a qualified religious or charitable entity or
organization (as defined in section 548(d)(4)) in an amount
not to exceed 15 percent of gross income of the debtor for
the year in which the contributions are made; and
``(B) if the debtor is engaged in business, for the payment
of expenditures necessary for the continuation, preservation,
and operation of such business.
``(3) Amounts reasonably necessary to be expended under
paragraph (2) shall be determined in accordance with
subparagraphs (A) and (B) of section 707(b)(2), if the debtor
has current monthly income, when multiplied by 12, greater
than--
``(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1
earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the
applicable State for a family of the same number or fewer
individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus
$525 per month for each individual in excess of 4.''.
(i) Special Allowance for Health Insurance.--Section
1329(a) 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) reduce amounts to be paid under the plan by the
actual amount expended by the debtor to purchase health
insurance for the debtor (and for any dependent of the debtor
if such dependent does not otherwise have health insurance
coverage) if the debtor documents the cost of such insurance
and demonstrates that--
``(A) such expenses are reasonable and necessary;
``(B)(i) if the debtor previously paid for health
insurance, the amount is not materially larger than the cost
the debtor previously paid or the cost necessary to maintain
the lapsed policy; or
``(ii) if the debtor did not have health insurance, the
amount is not materially larger than the reasonable cost that
would be incurred by a debtor who purchases health insurance,
who has similar income, expenses, age, and health status, and
who lives in the same geographical location with the same
number of dependents who do not otherwise have health
insurance coverage; and
``(C) the amount is not otherwise allowed for purposes of
determining disposable income under section 1325(b) of this
title;
and upon request of any party in interest, files proof that a
health insurance policy was purchased.''.
(j) Adjustment of Dollar Amounts.--Section 104(b) of title
11, United States Code, is amended by striking ``and
523(a)(2)(C)'' each place it appears and inserting
``523(a)(2)(C), 707(b), and 1325(b)(3)''.
(k) Definition of `Median Family Income'.--Section 101 of
title 11, United States Code, is amended by inserting after
paragraph (39) the following:
``(39A) `median family income' means for any year--
``(A) the median family income both calculated and reported
by the Bureau of the Census in the then most recent year; and
``(B) if not so calculated and reported in the then current
year, adjusted annually after such most recent year until the
next year in which median family income is both calculated
and reported by the Bureau of the Census, to reflect the
percentage change in the Consumer Price Index for All Urban
Consumers during the period of years occurring after such
most recent year and before such current year;''.
(k) Clerical Amendment.--The table of sections for chapter
7 of title 11, United States Code, is amended by striking the
item relating to section 707 and inserting the following:
``707. Dismissal of a case or conversion to a case under chapter 11 or
13.''.
SEC. 103. SENSE OF CONGRESS AND STUDY.
(a) Sense of Congress.--It is the sense of Congress that
the Secretary of the Treasury has the authority to alter the
Internal Revenue Service standards established to set
guidelines for repayment plans as needed to accommodate their
use under section 707(b) of title 11, United States Code.
(b) Study.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Director of the Executive Office
for United States Trustees shall submit a report to the
Committee on the Judiciary of the Senate and the Committee on
the Judiciary of the House of Representatives containing the
findings of the Director regarding the utilization of
Internal Revenue Service standards for determining--
(A) the current monthly expenses of a debtor under section
707(b) of title 11, United States Code; and
(B) the impact that the application of such standards has
had on debtors and on the bankruptcy courts.
(2) Recommendation.--The report under paragraph (1) may
include recommendations for amendments to title 11, United
States Code, that are consistent with the findings of the
Director under paragraph (1).
SEC. 104. 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 case under this title shall be
subject to fine, imprisonment, or both; and
``(B) all information supplied by a debtor in connection
with a case under this title is subject to examination by the
Attorney General.''.
SEC. 105. 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 serve in cases under chapter 13 of
title 11, 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 debtors who are individuals on how to
better manage their finances.
(b) Test.--
(1) Selection of districts.--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) Use.--For an 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 title 11, United States Code.
[[Page S773]]
(c) Evaluation.--
(1) In general.--During the 18-month 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,
United States Code, and by consumer counseling groups.
(2) Report.--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.
SEC. 106. CREDIT COUNSELING.
(a) Who May Be a Debtor.--Section 109 of title 11, United
States Code, is amended by adding at the end the following:
``(h)(1) Subject to paragraphs (2) and (3), and
notwithstanding any other provision of this section, an
individual may not be a debtor under this title unless such
individual has, during the 180-day period preceding the date
of filing of the petition by such individual, received from
an approved nonprofit budget and credit counseling agency
described in section 111(a) an individual or group briefing
(including a briefing conducted by telephone or on the
Internet) that outlined the opportunities for available
credit counseling and assisted such individual in performing
a related budget analysis.
``(2)(A) Paragraph (1) shall not apply with respect to a
debtor who resides in a district for which the United States
trustee (or the bankruptcy administrator, if any) determines
that the approved nonprofit budget and credit counseling
agencies for such district are not reasonably able to provide
adequate services to the additional individuals who would
otherwise seek credit counseling from such agencies by reason
of the requirements of paragraph (1).
``(B) The United States trustee (or the bankruptcy
administrator, if any) who makes a determination described in
subparagraph (A) shall review such determination not later
than 1 year after the date of such determination, and not
less frequently than annually thereafter. Notwithstanding the
preceding sentence, a nonprofit budget and credit counseling
agency may be disapproved by the United States trustee (or
the bankruptcy administrator, if any) at any time.
``(3)(A) Subject to subparagraph (B), the requirements of
paragraph (1) shall not apply with respect to a debtor who
submits to the court a certification that--
``(i) describes exigent circumstances that merit a waiver
of the requirements of paragraph (1);
``(ii) states that the debtor requested credit counseling
services from an approved nonprofit budget and credit
counseling agency, but was unable to obtain the services
referred to in paragraph (1) during the 5-day period
beginning on the date on which the debtor made that request;
and
``(iii) is satisfactory to the court.
``(B) With respect to a debtor, an exemption under
subparagraph (A) shall cease to apply to that debtor on the
date on which the debtor meets the requirements of paragraph
(1), but in no case may the exemption apply to that debtor
after the date that is 30 days after the debtor files a
petition, except that the court, for cause, may order an
additional 15 days.''.
(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 filing the petition, the debtor failed to
complete an instructional course concerning personal
financial management described in section 111, except that
this paragraph shall not apply with respect to a debtor who
resides in a district for which the United States trustee (or
the bankruptcy administrator, if any) determines that the
approved instructional courses are not adequate to service
the additional individuals who would otherwise be required to
complete such instructional courses under this section (The
United States trustee (or the bankruptcy administrator, if
any) who makes a determination described in this paragraph
shall review such determination not later than 1 year after
the date of such determination, and not less frequently than
annually thereafter.).''.
(c) Chapter 13 Discharge.--Section 1328 of title 11, United
States Code, is amended by adding at the end the following:
``(g)(1) 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.
``(2) Paragraph (1) shall not apply with respect to a
debtor who resides in a district for which the United States
trustee (or the bankruptcy administrator, if any) determines
that the approved instructional courses are not adequate to
service the additional individuals who would otherwise be
required to complete such instructional course by reason of
the requirements of paragraph (1).
``(3) The United States trustee (or the bankruptcy
administrator, if any) who makes a determination described in
paragraph (2) shall review such determination not later than
1 year after the date of such determination, and not less
frequently than annually thereafter.''.
(d) Debtor's Duties.--Section 521 of title 11, United
States Code, is amended--
(1) by inserting ``(a)'' before ``The debtor shall--''; and
(2) by adding at the end the following:
``(b) In addition to the requirements under subsection (a),
a debtor who is an individual shall file with the court--
``(1) a certificate from the approved nonprofit budget and
credit counseling agency that provided the debtor services
under section 109(h) describing the services provided to the
debtor; and
``(2) a copy of the debt repayment plan, if any, developed
under section 109(h) through the approved nonprofit budget
and credit counseling agency 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. Nonprofit budget and credit counseling agencies;
financial management instructional courses
``(a) The clerk shall maintain a publicly available list
of--
``(1) nonprofit budget and credit counseling agencies that
provide 1 or more services described in section 109(h)
currently approved by the United States trustee (or the
bankruptcy administrator, if any); and
``(2) instructional courses concerning personal financial
management currently approved by the United States trustee
(or the bankruptcy administrator, if any), as applicable.
``(b) The United States trustee (or bankruptcy
administrator, if any) shall only approve a nonprofit budget
and credit counseling agency or an instructional course
concerning personal financial management as follows:
``(1) The United States trustee (or bankruptcy
administrator, if any) shall have thoroughly reviewed the
qualifications of the nonprofit budget and credit counseling
agency or of the provider of the instructional course under
the standards set forth in this section, and the services or
instructional courses that will be offered by such agency or
such provider, and may require such agency or such provider
that has sought approval to provide information with respect
to such review.
``(2) The United States trustee (or bankruptcy
administrator, if any) shall have determined that such agency
or such instructional course fully satisfies the applicable
standards set forth in this section.
``(3) If a nonprofit budget and credit counseling agency or
instructional course did not appear on the approved list for
the district under subsection (a) immediately before approval
under this section, approval under this subsection of such
agency or such instructional course shall be for a
probationary period not to exceed 6 months.
``(4) At the conclusion of the applicable probationary
period under paragraph (3), the United States trustee (or
bankruptcy administrator, if any) may only approve for an
additional 1-year period, and for successive 1-year periods
thereafter, an agency or instructional course that has
demonstrated during the probationary or applicable subsequent
period of approval that such agency or instructional course--
``(A) has met the standards set forth under this section
during such period; and
``(B) can satisfy such standards in the future.
``(5) Not later than 30 days after any final decision under
paragraph (4), an interested person may seek judicial review
of such decision in the appropriate district court of the
United States.
``(c)(1) The United States trustee (or the bankruptcy
administrator, if any) shall only approve a nonprofit budget
and credit counseling agency that demonstrates that it will
provide qualified counselors, maintain adequate provision for
safekeeping and payment of client funds, provide adequate
counseling with respect to client credit problems, and deal
responsibly and effectively with other matters relating to
the quality, effectiveness, and financial security of the
services it provides.
``(2) To be approved by the United States trustee (or the
bankruptcy administrator, if any), a nonprofit budget and
credit counseling agency shall, at a minimum--
``(A) have a board of directors the majority of which--
``(i) are not employed by such agency; and
``(ii) will not directly or indirectly benefit financially
from the outcome of the counseling services provided by such
agency;
``(B) if a fee is charged for counseling services, charge a
reasonable fee, and provide services without regard to
ability to pay the fee;
``(C) provide for safekeeping and payment of client funds,
including an annual audit of the trust accounts and
appropriate employee bonding;
``(D) provide full disclosures to a client, including
funding sources, counselor qualifications, possible impact on
credit reports, and
[[Page S774]]
any costs of such program that will be paid by such client
and how such costs will be paid;
``(E) provide adequate counseling with respect to a
client's credit problems that includes an analysis of such
client's current financial condition, factors that caused
such financial condition, and how such client can develop a
plan to respond to the problems without incurring negative
amortization of debt;
``(F) provide trained counselors who receive no commissions
or bonuses based on the outcome of the counseling services
provided by such agency, and who have adequate experience,
and have been adequately trained to provide counseling
services to individuals in financial difficulty, including
the matters described in subparagraph (E);
``(G) demonstrate adequate experience and background in
providing credit counseling; and
``(H) have adequate financial resources to provide
continuing support services for budgeting plans over the life
of any repayment plan.
``(d) The United States trustee (or the bankruptcy
administrator, if any) shall only approve an instructional
course concerning personal financial management--
``(1) for an initial probationary period under subsection
(b)(3) if the course will provide at a minimum--
``(A) trained personnel with adequate experience and
training in providing effective instruction and services;
``(B) learning materials and teaching methodologies
designed to assist debtors in understanding personal
financial management and that are consistent with stated
objectives directly related to the goals of such
instructional course;
``(C) adequate facilities situated in reasonably convenient
locations at which such instructional course is offered,
except that such facilities may include the provision of such
instructional course by telephone or through the Internet, if
such instructional course is effective; and
``(D) the preparation and retention of reasonable records
(which shall include the debtor's bankruptcy case number) to
permit evaluation of the effectiveness of such instructional
course, including any evaluation of satisfaction of
instructional course requirements for each debtor attending
such instructional course, which shall be available for
inspection and evaluation by the Executive Office for United
States Trustees, the United States trustee (or the bankruptcy
administrator, if any), or the chief bankruptcy judge for the
district in which such instructional course is offered; and
``(2) for any 1-year period if the provider thereof has
demonstrated that the course meets the standards of paragraph
(1) and, in addition--
``(A) has been effective in assisting a substantial number
of debtors to understand personal financial management; and
``(B) is otherwise likely to increase substantially the
debtor's understanding of personal financial management.
``(e) The district court may, at any time, investigate the
qualifications of a nonprofit budget and credit counseling
agency referred to in subsection (a), and request production
of documents to ensure the integrity and effectiveness of
such agency. The district court may, at any time, remove from
the approved list under subsection (a) a nonprofit budget and
credit counseling agency upon finding such agency does not
meet the qualifications of subsection (b).
``(f) The United States trustee (or the bankruptcy
administrator, if any) shall notify the clerk that a
nonprofit budget and credit counseling agency or an
instructional course is no longer approved, in which case the
clerk shall remove it from the list maintained under
subsection (a).
``(g)(1) No nonprofit budget and credit counseling agency
may provide to a credit reporting agency information
concerning whether a debtor has received or sought
instruction concerning personal financial management from
such agency.
``(2) A nonprofit budget and credit counseling agency that
willfully or negligently fails to comply with any requirement
under this title with respect to a debtor shall be liable for
damages in an amount equal to the sum of--
``(A) any actual damages sustained by the debtor as a
result of the violation; and
``(B) any court costs or reasonable attorneys' fees (as
determined by the court) incurred in an action to recover
those damages.''.
(2) Clerical amendment.--The table of sections for chapter
1 of title 11, United States Code, is amended by adding at
the end the following:
``111. Nonprofit budget and credit counseling agencies; financial
management instructional courses.''.
(f) Limitation.--Section 362 of title 11, United States
Code, is amended by adding at the end the following:
``(i) If a case commenced under chapter 7, 11, or 13 is
dismissed due to the creation of a debt repayment plan, for
purposes of subsection (c)(3), any subsequent case commenced
by the debtor under any such chapter shall not be presumed to
be filed not in good faith.
``(j) On request of a party in interest, the court shall
issue an order under subsection (c) confirming that the
automatic stay has been terminated.''.
SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY EXPENSES.
For purposes of section 707(b) of title 11, United States
Code, as amended by this Act, the Director of the Executive
Office for United States Trustees shall, not later than 180
days after the date of enactment of this Act, issue schedules
of reasonable and necessary administrative expenses of
administering a chapter 13 plan for each judicial district of
the United States.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.
(a) Reduction of Claim.--Section 502 of title 11, United
States Code, is amended by adding at the end the following:
``(k)(1) The court, on the motion of the debtor and after a
hearing, may reduce a claim filed under this section based in
whole on an unsecured consumer debt by not more than 20
percent of the claim, if--
``(A) the claim was filed by a creditor who unreasonably
refused to negotiate a reasonable alternative repayment
schedule proposed on behalf of the debtor by an approved
nonprofit budget and credit counseling agency described in
section 111;
``(B) the offer of the debtor under subparagraph (A)--
``(i) was made at least 60 days before the date of the
filing of the petition; and
``(ii) provided for payment of at least 60 percent of the
amount of the debt over a period not to exceed the repayment
period of the loan, or a reasonable extension thereof; and
``(C) no part of the debt under the alternative repayment
schedule is nondischargeable.
``(2) The debtor shall have the burden of proving, by clear
and convincing evidence, that--
``(A) the creditor unreasonably refused to consider the
debtor's proposal; and
``(B) the proposed alternative repayment schedule was made
prior to expiration of the 60-day period specified in
paragraph (1)(B)(i).''.
(b) Limitation on Avoidability.--Section 547 of title 11,
United States Code, is amended by adding at the end the
following:
``(h) The trustee may not avoid a transfer if such transfer
was made as a part of an alternative repayment schedule
between the debtor and any creditor of the debtor created by
an approved nonprofit budget and credit counseling agency.''.
SEC. 202. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended by
adding at the end the following:
``(i) The willful failure of a creditor to credit payments
received under a plan confirmed under this title, unless the
order confirming the plan is revoked, the plan is in default,
or the creditor has not received payments required to be made
under the plan in the manner required by the plan (including
crediting the amounts required under the plan), shall
constitute a violation of an injunction under subsection
(a)(2) if the act of the creditor to collect and failure to
credit payments in the manner required by the plan caused
material injury to the debtor.
``(j) Subsection (a)(2) does not operate as an injunction
against an act by a creditor that is the holder of a secured
claim, if--
``(1) such creditor retains a security interest in real
property that is the principal residence of the debtor;
``(2) such act is in the ordinary course of business
between the creditor and the debtor; and
``(3) such act is limited to seeking or obtaining periodic
payments associated with a valid security interest in lieu of
pursuit of in rem relief to enforce the lien.''.
SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION AGREEMENT
PRACTICES.
(a) In General.--Section 524 of title 11, United States
Code, as amended section 202, is amended--
(1) in subsection (c), by striking paragraph (2) and
inserting the following:
``(2) the debtor received the disclosures described in
subsection (k) at or before the time at which the debtor
signed the agreement;''; and
(2) by adding at the end the following:
``(k)(1) The disclosures required under subsection (c)(2)
shall consist of the disclosure statement described in
paragraph (3), completed as required in that paragraph,
together with the agreement specified in subsection (c),
statement, declaration, motion and order described,
respectively, in paragraphs (4) through (8), and shall be the
only disclosures required in connection with entering into
such agreement.
``(2) Disclosures made under paragraph (1) shall be made
clearly and conspicuously and in writing. The terms `Amount
Reaffirmed' and `Annual Percentage Rate' shall be disclosed
more conspicuously than other terms, data or information
provided in connection with this disclosure, except that the
phrases `Before agreeing to reaffirm a debt, review these
important disclosures' and `Summary of Reaffirmation
Agreement' may be equally conspicuous. Disclosures may be
made in a different order and may use terminology different
from that set forth in paragraphs (2) through (8), except
that the terms `Amount Reaffirmed' and `Annual Percentage
Rate' must be used where indicated.
``(3) The disclosure statement required under this
paragraph shall consist of the following:
``(A) The statement: `Part A: Before agreeing to reaffirm a
debt, review these important disclosures:';
[[Page S775]]
``(B) Under the heading `Summary of Reaffirmation
Agreement', the statement: `This Summary is made pursuant to
the requirements of the Bankruptcy Code';
``(C) The `Amount Reaffirmed', using that term, which shall
be--
``(i) the total amount of debt that the debtor agrees to
reaffirm by entering into an agreement of the kind specified
in subsection (c), and
``(ii) the total of any fees and costs accrued as of the
date of the disclosure statement, related to such total
amount.
``(D) In conjunction with the disclosure of the `Amount
Reaffirmed', the statements--
``(i) `The amount of debt you have agreed to reaffirm'; and
``(ii) `Your credit agreement may obligate you to pay
additional amounts which may come due after the date of this
disclosure. Consult your credit agreement.'.
``(E) The `Annual Percentage Rate', using that term, which
shall be disclosed as--
``(i) if, at the time the petition is filed, the debt is an
extension of credit under an open end credit plan, as the
terms `credit' and `open end credit plan' are defined in
section 103 of the Truth in Lending Act, then--
``(I) the annual percentage rate determined under
paragraphs (5) and (6) of section 127(b) of the Truth in
Lending Act, as applicable, as disclosed to the debtor in the
most recent periodic statement prior to entering into an
agreement of the kind specified in subsection (c) or, if no
such periodic statement has been given to the debtor during
the prior 6 months, the annual percentage rate as it would
have been so disclosed at the time the disclosure statement
is given to the debtor, or to the extent this annual
percentage rate is not readily available or not applicable,
then
``(II) the simple interest rate applicable to the amount
reaffirmed as of the date the disclosure statement is given
to the debtor, or if different simple interest rates apply to
different balances, the simple interest rate applicable to
each such balance, identifying the amount of each such
balance included in the amount reaffirmed, or
``(III) if the entity making the disclosure elects, to
disclose the annual percentage rate under subclause (I) and
the simple interest rate under subclause (II); or
``(ii) if, at the time the petition is filed, the debt is
an extension of credit other than under an open end credit
plan, as the terms `credit' and `open end credit plan' are
defined in section 103 of the Truth in Lending Act, then--
``(I) the annual percentage rate under section 128(a)(4) of
the Truth in Lending Act, as disclosed to the debtor in the
most recent disclosure statement given to the debtor prior to
the entering into an agreement of the kind specified in
subsection (c) with respect to the debt, or, if no such
disclosure statement was given to the debtor, the annual
percentage rate as it would have been so disclosed at the
time the disclosure statement is given to the debtor, or to
the extent this annual percentage rate is not readily
available or not applicable, then
``(II) the simple interest rate applicable to the amount
reaffirmed as of the date the disclosure statement is given
to the debtor, or if different simple interest rates apply to
different balances, the simple interest rate applicable to
each such balance, identifying the amount of such balance
included in the amount reaffirmed, or
``(III) if the entity making the disclosure elects, to
disclose the annual percentage rate under (I) and the simple
interest rate under (II).
``(F) If the underlying debt transaction was disclosed as a
variable rate transaction on the most recent disclosure given
under the Truth in Lending Act, by stating `The interest rate
on your loan may be a variable interest rate which changes
from time to time, so that the annual percentage rate
disclosed here may be higher or lower.'.
``(G) If the debt is secured by a security interest which
has not been waived in whole or in part or determined to be
void by a final order of the court at the time of the
disclosure, by disclosing that a security interest or lien in
goods or property is asserted over some or all of the debts
the debtor is reaffirming and listing the items and their
original purchase price that are subject to the asserted
security interest, or if not a purchase-money security
interest then listing by items or types and the original
amount of the loan.
``(H) At the election of the creditor, a statement of the
repayment schedule using 1 or a combination of the
following--
``(i) by making the statement: `Your first payment in the
amount of $___ is due on ___ but the future payment amount
may be different. Consult your reaffirmation agreement or
credit agreement, as applicable.', and stating the amount of
the first payment and the due date of that payment in the
places provided;
``(ii) by making the statement: `Your payment schedule will
be:', and describing the repayment schedule with the number,
amount, and due dates or period of payments scheduled to
repay the debts reaffirmed to the extent then known by the
disclosing party; or
``(iii) by describing the debtor's repayment obligations
with reasonable specificity to the extent then known by the
disclosing party.
``(I) The following statement: `Note: When this disclosure
refers to what a creditor ``may'' do, it does not use the
word ``may'' to give the creditor specific permission. The
word ``may'' is used to tell you what might occur if the law
permits the creditor to take the action. If you have
questions about your reaffirming a debt or what the law
requires, consult with the attorney who helped you negotiate
this agreement reaffirming a debt. If you don't have an
attorney helping you, the judge will explain the effect of
your reaffirming a debt when the hearing on the reaffirmation
agreement is held.'.
``(J)(i) The following additional statements:
`` `Reaffirming a debt is a serious financial decision. The
law requires you to take certain steps to make sure the
decision is in your best interest. If these steps are not
completed, the reaffirmation agreement is not effective, even
though you have signed it.
`` `1. Read the disclosures in this Part A carefully.
Consider the decision to reaffirm carefully. Then, if you
want to reaffirm, sign the reaffirmation agreement in Part B
(or you may use a separate agreement you and your creditor
agree on).
`` `2. Complete and sign Part D and be sure you can afford
to make the payments you are agreeing to make and have
received a copy of the disclosure statement and a completed
and signed reaffirmation agreement.
`` `3. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, the attorney
must have signed the certification in Part C.
`` `4. If you were not represented by an attorney during
the negotiation of your reaffirmation agreement, you must
have completed and signed Part E.
`` `5. The original of this disclosure must be filed with
the court by you or your creditor. If a separate
reaffirmation agreement (other than the one in Part B) has
been signed, it must be attached.
`` `6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your
reaffirmation agreement becomes effective upon filing with
the court unless the reaffirmation is presumed to be an undue
hardship as explained in Part D.
`` `7. If you were not represented by an attorney during
the negotiation of your reaffirmation agreement, it will not
be effective unless the court approves it. The court will
notify you of the hearing on your reaffirmation agreement.
You must attend this hearing in bankruptcy court where the
judge will review your reaffirmation agreement. The
bankruptcy court must approve your reaffirmation agreement as
consistent with your best interests, except that no court
approval is required if your reaffirmation agreement is for a
consumer debt secured by a mortgage, deed of trust, security
deed, or other lien on your real property, like your home.
`` `Your right to rescind (cancel) your reaffirmation
agreement. You may rescind (cancel) your reaffirmation
agreement at any time before the bankruptcy court enters a
discharge order, or before the expiration of the 60-day
period that begins on the date your reaffirmation agreement
is filed with the court, whichever occurs later. To rescind
(cancel) your reaffirmation agreement, you must notify the
creditor that your reaffirmation agreement is rescinded (or
canceled).
`` `What are your obligations if you reaffirm the debt? A
reaffirmed debt remains your personal legal obligation. It is
not discharged in your bankruptcy case. That means that if
you default on your reaffirmed debt after your bankruptcy
case is over, your creditor may be able to take your property
or your wages. Otherwise, your obligations will be determined
by the reaffirmation agreement which may have changed the
terms of the original agreement. For example, if you are
reaffirming an open end credit agreement, the creditor may be
permitted by that agreement or applicable law to change the
terms of that agreement in the future under certain
conditions.
`` `Are you required to enter into a reaffirmation
agreement by any law? No, you are not required to reaffirm a
debt by any law. Only agree to reaffirm a debt if it is in
your best interest. Be sure you can afford the payments you
agree to make.
`` `What if your creditor has a security interest or lien?
Your bankruptcy discharge does not eliminate any lien on your
property. A ``lien'' is often referred to as a security
interest, deed of trust, mortgage or security deed. Even if
you do not reaffirm and your personal liability on the debt
is discharged, because of the lien your creditor may still
have the right to take the security property if you do not
pay the debt or default on it. If the lien is on an item of
personal property that is exempt under your State's law or
that the trustee has abandoned, you may be able to redeem the
item rather than reaffirm the debt. To redeem, you make a
single payment to the creditor equal to the current value of
the security property, as agreed by the parties or determined
by the court.'.
``(ii) In the case of a reaffirmation under subsection
(m)(2), numbered paragraph 6 in the disclosures required by
clause (i) of this subparagraph shall read as follows:
`` `6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your
reaffirmation agreement becomes effective upon filing with
the court.'.
``(4) The form of such agreement required under this
paragraph shall consist of the following:
`` `Part B: Reaffirmation Agreement. I (we) agree to
reaffirm the debts arising under the credit agreement
described below.
[[Page S776]]
`` `Brief description of credit agreement:
`` `Description of any changes to the credit agreement made
as part of this reaffirmation agreement:
`` `Signature: Date:
`` `Borrower:
`` `Co-borrower, if also reaffirming these debts:
`` `Accepted by creditor:
`` `Date of creditor acceptance:'.
``(5) The declaration shall consist of the following:
``(A) The following certification:
`` `Part C: Certification by Debtor's Attorney (If Any).
`` `I hereby certify that (1) this agreement represents a
fully informed and voluntary agreement by the debtor; (2)
this agreement does not impose an undue hardship on the
debtor or any dependent of the debtor; and (3) I have fully
advised the debtor of the legal effect and consequences of
this agreement and any default under this agreement.
`` `Signature of Debtor's Attorney: Date:'.
``(B) If a presumption of undue hardship has been
established with respect to such agreement, such
certification shall state that in the opinion of the
attorney, the debtor is able to make the payment.
``(C) In the case of a reaffirmation agreement under
subsection (m)(2), subparagraph (B) is not applicable.
``(6)(A) The statement in support of such agreement, which
the debtor shall sign and date prior to filing with the
court, shall consist of the following:
`` `Part D: Debtor's Statement in Support of Reaffirmation
Agreement.
`` `1. I believe this reaffirmation agreement will not
impose an undue hardship on my dependents or me. I can afford
to make the payments on the reaffirmed debt because my
monthly income (take home pay plus any other income received)
is $___, and my actual current monthly expenses including
monthly payments on post-bankruptcy debt and other
reaffirmation agreements total $___, leaving $___ to make the
required payments on this reaffirmed debt. I understand that
if my income less my monthly expenses does not leave enough
to make the payments, this reaffirmation agreement is
presumed to be an undue hardship on me and must be reviewed
by the court. However, this presumption may be overcome if I
explain to the satisfaction of the court how I can afford to
make the payments here: ___.
`` `2. I received a copy of the Reaffirmation Disclosure
Statement in Part A and a completed and signed reaffirmation
agreement.'.
``(B) Where the debtor is represented by an attorney and is
reaffirming a debt owed to a creditor defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of
support of the reaffirmation agreement, which the debtor
shall sign and date prior to filing with the court, shall
consist of the following:
`` `I believe this reaffirmation agreement is in my
financial interest. I can afford to make the payments on the
reaffirmed debt. I received a copy of the Reaffirmation
Disclosure Statement in Part A and a completed and signed
reaffirmation agreement.'.
``(7) The motion that may be used if approval of such
agreement by the court is required in order for it to be
effective, shall be signed and dated by the movant and shall
consist of the following:
`` `Part E: Motion for Court Approval (To be completed only
if the debtor is not represented by an attorney.). I (we),
the debtor(s), affirm the following to be true and correct:
`` `I am not represented by an attorney in connection with
this reaffirmation agreement.
`` `I believe this reaffirmation agreement is in my best
interest based on the income and expenses I have disclosed in
my Statement in Support of this reaffirmation agreement, and
because (provide any additional relevant reasons the court
should consider):
`` `Therefore, I ask the court for an order approving this
reaffirmation agreement.'.
``(8) The court order, which may be used to approve such
agreement, shall consist of the following:
`` `Court Order: The court grants the debtor's motion and
approves the reaffirmation agreement described above.'.
``(l) Notwithstanding any other provision of this title the
following shall apply:
``(1) A creditor may accept payments from a debtor before
and after the filing of an agreement of the kind specified in
subsection (c) with the court.
``(2) A creditor may accept payments from a debtor under
such agreement that the creditor believes in good faith to be
effective.
``(3) The requirements of subsections (c)(2) and (k) shall
be satisfied if disclosures required under those subsections
are given in good faith.
``(m)(1) Until 60 days after an agreement of the kind
specified in subsection (c) is filed with the court (or such
additional period as the court, after notice and a hearing
and for cause, orders before the expiration of such period),
it shall be presumed that such agreement is an undue hardship
on the debtor if the debtor's monthly income less the
debtor's monthly expenses as shown on the debtor's completed
and signed statement in support of such agreement required
under subsection (k)(6)(A) is less than the scheduled
payments on the reaffirmed debt. This presumption shall be
reviewed by the court. The presumption may be rebutted in
writing by the debtor if the statement includes an
explanation that identifies additional sources of funds to
make the payments as agreed upon under the terms of such
agreement. If the presumption is not rebutted to the
satisfaction of the court, the court may disapprove such
agreement. No agreement shall be disapproved without notice
and a hearing to the debtor and creditor, and such hearing
shall be concluded before the entry of the debtor's
discharge.
``(2) This subsection does not apply to reaffirmation
agreements where the creditor is a credit union, as defined
in section 19(b)(1)(A)(iv) of the Federal Reserve Act.''.
(b) Law Enforcement.--
(1) In general.--Chapter 9 of title 18, United States Code,
is amended by adding at the end the following:
``Sec. 158. Designation of United States attorneys and agents
of the Federal Bureau of Investigation to address abusive
reaffirmations of debt and materially fraudulent statements
in bankruptcy schedules
``(a) In General.--The Attorney General of the United
States shall designate the individuals described in
subsection (b) to have primary responsibility in carrying out
enforcement activities in addressing violations of section
152 or 157 relating to abusive reaffirmations of debt. In
addition to addressing the violations referred to in the
preceding sentence, the individuals described under
subsection (b) shall address violations of section 152 or 157
relating to materially fraudulent statements in bankruptcy
schedules that are intentionally false or intentionally
misleading.
``(b) United States Attorneys and Agents of the Federal
Bureau of Investigation.--The individuals referred to in
subsection (a) are--
``(1) the United States attorney for each judicial district
of the United States; and
``(2) an agent of the Federal Bureau of Investigation for
each field office of the Federal Bureau of Investigation.
``(c) Bankruptcy Investigations.--Each United States
attorney designated under this section shall, in addition to
any other responsibilities, have primary responsibility for
carrying out the duties of a United States attorney under
section 3057.
``(d) Bankruptcy Procedures.--The bankruptcy courts shall
establish procedures for referring any case that may contain
a materially fraudulent statement in a bankruptcy schedule to
the individuals designated under this section.''.
(2) Clerical amendment.--The table of sections for chapter
9 of title 18, United States Code, is amended by adding at
the end the following:
``158. Designation of United States attorneys and agents of the Federal
Bureau of Investigation to address abusive reaffirmations
of debt and materially fraudulent statements in
bankruptcy schedules.''.
SEC. 204. PRESERVATION OF CLAIMS AND DEFENSES UPON SALE OF
PREDATORY LOANS.
Section 363 of title 11, United States Code, is amended--
(1) by redesignating subsection (o) as subsection (p), and
(2) by inserting after subsection (n) the following:
``(o) Notwithstanding subsection (f), if a person purchases
any interest in a consumer credit transaction that is subject
to the Truth in Lending Act or any interest in a consumer
credit contract (as defined in section 433.1 of title 16 of
the Code of Federal Regulations (January 1, 2004), as amended
from time to time), and if such interest is purchased through
a sale under this section, then such person shall remain
subject to all claims and defenses that are related to such
consumer credit transaction or such consumer credit contract,
to the same extent as such person would be subject to such
claims and defenses of the consumer had such interest been
purchased at a sale not under this section.''.
SEC. 205. GAO STUDY AND REPORT ON REAFFIRMATION AGREEMENT
PROCESS.
(a) Study.--The Comptroller General of the United States
shall conduct a study of the reaffirmation agreement process
that occurs under title 11 of the United States Code, to
determine the overall treatment of consumers within the
context of such process, and shall include in such study
consideration of--
(1) the policies and activities of creditors with respect
to reaffirmation agreements; and
(2) whether consumers are fully, fairly, and consistently
informed of their rights pursuant to such title.
(b) Report to the Congress.--Not later than 18 months after
the date of the enactment of this Act, the Comptroller
General shall submit to the President pro tempore of the
Senate and the Speaker of the House of Representatives a
report on the results of the study conducted under subsection
(a), together with recommendations for legislation (if any)
to address any abusive or coercive tactics found in
connection with the reaffirmation agreement process that
occurs under title 11 of the United States Code.
Subtitle B--Priority Child Support
SEC. 211. 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, on, or after the
[[Page S777]]
date of the order for relief in a case under this title,
including interest that accrues on that debt as provided
under applicable nonbankruptcy law notwithstanding any other
provision of this title, that is--
``(A) owed to or recoverable by--
``(i) a spouse, former spouse, or child of the debtor or
such child's parent, legal guardian, or responsible relative;
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 of the debtor or such
child's parent, without regard to whether such debt is
expressly so designated;
``(C) established or subject to establishment before, on,
or after the date of the order for relief in a case 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 of the debtor, or such child's parent, legal
guardian, or responsible relative for the purpose of
collecting the debt;''.
SEC. 212. 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 so redesignated, by striking
``First'' and inserting ``Second'';
(4) in paragraph (3), as so redesignated, by striking
``Second'' and inserting ``Third'';
(5) in paragraph (4), as so redesignated--
(A) by striking ``Third'' and inserting ``Fourth''; and
(B) by striking the semicolon at the end and inserting a
period;
(6) in paragraph (5), as so redesignated, by striking
``Fourth'' and inserting ``Fifth'';
(7) in paragraph (6), as so redesignated, by striking
``Fifth'' and inserting ``Sixth'';
(8) in paragraph (7), as so redesignated, by striking
``Sixth'' and inserting ``Seventh''; and
(9) by inserting before paragraph (2), as so redesignated,
the following:
``(1) First:
``(A) Allowed unsecured claims for domestic support
obligations that, as of the date of the filing of the
petition in a case under this title, are owed to or
recoverable by a spouse, former spouse, or child of the
debtor, or such child's parent, legal guardian, or
responsible relative, without regard to whether the claim is
filed by such person or is filed by a governmental unit on
behalf of such person, on the condition that funds received
under this paragraph by a governmental unit under this title
after the date of the filing of the petition shall be applied
and distributed in accordance with applicable nonbankruptcy
law.
``(B) Subject to claims under subparagraph (A), allowed
unsecured claims for domestic support obligations that, as of
the date of the filing of the petition, are assigned by a
spouse, former spouse, child of the debtor, or such child's
parent, legal guardian, or responsible relative to a
governmental unit (unless such obligation is assigned
voluntarily by the spouse, former spouse, child, parent,
legal guardian, or responsible relative of the child for the
purpose of collecting the debt) or are owed directly to or
recoverable by a governmental unit under applicable
nonbankruptcy law, on the condition that funds received under
this paragraph by a governmental unit under this title after
the date of the filing of the petition be applied and
distributed in accordance with applicable nonbankruptcy law.
``(C) If a trustee is appointed or elected under section
701, 702, 703, 1104, 1202, or 1302, the administrative
expenses of the trustee allowed under paragraphs (1)(A), (2),
and (6) of section 503(b) shall be paid before payment of
claims under subparagraphs (A) and (B), to the extent that
the trustee administers assets that are otherwise available
for the payment of such claims.''.
SEC. 213. 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 by statute, to pay a domestic
support obligation, the debtor has paid all amounts payable
under such order or such statute for such obligation that
first become payable after the date of the filing of the
petition.'';
(2) in section 1208(c)--
(A) in paragraph (8), by striking ``or'' at the end;
(B) in paragraph (9), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(10) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of the
filing of the petition.'';
(3) in section 1222(a)--
(A) in paragraph (2), by striking ``and'' at the end;
(B) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(4) notwithstanding any other provision of this section,
a plan may provide for less than full payment of all amounts
owed for a claim entitled to priority under section
507(a)(1)(B) only if the plan provides that all of the
debtor's projected disposable income for a 5-year period
beginning on the date that the first payment is due under the
plan will be applied to make payments under the plan.'';
(4) in section 1222(b)--
(A) in paragraph (10), by striking ``and'' at the end;
(B) by redesignating paragraph (11) as paragraph (12); and
(C) by inserting after paragraph (10) the following:
``(11) provide for the payment of interest accruing after
the date of the filing of the petition on unsecured claims
that are nondischargeable under section 1228(a), except that
such interest may be paid only to the extent that the debtor
has disposable income available to pay such interest after
making provision for full payment of all allowed claims;
and'';
(5) in section 1225(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) the debtor has paid all amounts that are required to
be paid under a domestic support obligation and that first
become payable after the date of the filing of the petition
if the debtor is required by a judicial or administrative
order, or by statute, to pay such domestic support
obligation.'';
(6) in section 1228(a), in the matter preceding paragraph
(1), by inserting ``, and in the case of a debtor who is
required by a judicial or administrative order, or by
statute, to pay a domestic support obligation, after such
debtor certifies that all amounts payable under such order or
such statute that are due on or before the date of the
certification (including amounts due before the petition was
filed, but only to the extent provided for by the plan) have
been paid'' after ``completion by the debtor of all payments
under the plan'';
(7) in section 1307(c)--
(A) in paragraph (9), by striking ``or'' at the end;
(B) in paragraph (10), by striking the period at the end
and inserting ``; or''; and
(C) by adding at the end the following:
``(11) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of the
filing of the petition.'';
(8) in section 1322(a)--
(A) in paragraph (2), by striking ``and'' at the end;
(B) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(4) notwithstanding any other provision of this section,
a plan may provide for less than full payment of all amounts
owed for a claim entitled to priority under section
507(a)(1)(B) only if the plan provides that all of the
debtor's projected disposable income for a 5-year period
beginning on the date that the first payment is due under the
plan will be applied to make payments under the plan.'';
(9) in section 1322(b)--
(A) in paragraph (9), by striking ``; and'' and inserting a
semicolon;
(B) by redesignating paragraph (10) as paragraph (11); and
(C) inserting after paragraph (9) the following:
``(10) provide for the payment of interest accruing after
the date of the filing of the petition on unsecured claims
that are nondischargeable under section 1328(a), except that
such interest may be paid only to the extent that the debtor
has disposable income available to pay such interest after
making provision for full payment of all allowed claims;
and'';
(10) in section 1325(a), as amended by section 102, by
inserting after paragraph (7) the following:
``(8) the debtor has paid all amounts that are required to
be paid under a domestic support obligation and that first
become payable after the date of the filing of the petition
if the debtor is required by a judicial or administrative
order, or by statute, to pay such domestic support
obligation; and'';
(11) in section 1328(a), in the matter preceding paragraph
(1), by inserting ``, and in the case of a debtor who is
required by a judicial or administrative order, or by
statute, to pay a domestic support obligation, after such
debtor certifies that all amounts payable under such order or
such statute that are due on or before the date of the
certification (including amounts due before the petition was
filed, but only to the extent provided for by the plan) have
been paid'' after ``completion by the debtor of all payments
under the plan''.
SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT
OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, is amended
by striking paragraph (2) and inserting the following:
``(2) under subsection (a)--
``(A) of the commencement or continuation of a civil action
or proceeding--
``(i) for the establishment of paternity;
``(ii) for the establishment or modification of an order
for domestic support obligations;
``(iii) concerning child custody or visitation;
[[Page S778]]
``(iv) for the dissolution of a marriage, except to the
extent that such proceeding seeks to determine the division
of property that is property of the estate; or
``(v) regarding domestic violence;
``(B) of the collection of a domestic support obligation
from property that is not property of the estate;
``(C) with respect to the withholding of income that is
property of the estate or property of the debtor for payment
of a domestic support obligation under a judicial or
administrative order or a statute;
``(D) of the withholding, suspension, or restriction of a
driver's license, a professional or occupational license, or
a recreational license, under State law, as specified in
section 466(a)(16) of the Social Security Act;
``(E) of the reporting of overdue support owed by a parent
to any consumer reporting agency as specified in section
466(a)(7) of the Social Security Act;
``(F) of the interception of a tax refund, as specified in
sections 464 and 466(a)(3) of the Social Security Act or
under an analogous State law; or
``(G) of the enforcement of a medical obligation, as
specified under title IV of the Social Security Act;''.
SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY,
MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is amended--
(1) in subsection (a)--
(A) by striking paragraph (5) and inserting the following:
``(5) for a domestic support obligation;''; and
(B) by striking paragraph (18);
(2) in subsection (c), by striking ``(6), or (15)'' each
place it appears and inserting ``or (6)''; and
(3) in paragraph (15), as added by Public Law 103-394 (108
Stat. 4133)--
(A) by inserting ``to a spouse, former spouse, or child of
the debtor and'' before ``not of the kind'';
(B) by inserting ``or'' after ``court of record,''; and
(C) by striking ``unless--'' and all that follows through
the end of the paragraph and inserting a semicolon.
SEC. 216. 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));'';
(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''; and
(3) in subsection (g)(2), by striking ``subsection (f)(2)''
and inserting ``subsection (f)(1)(B)''.
SEC. 217. 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;''.
SEC. 218. DISPOSABLE INCOME DEFINED.
Section 1225(b)(2)(A) of title 11, United States Code, is
amended by inserting ``or for a domestic support obligation
that first becomes payable after the date of the filing of
the petition'' after ``dependent of the debtor''.
SEC. 219. COLLECTION OF CHILD SUPPORT.
(a) Duties of Trustee Under Chapter 7.--Section 704 of
title 11, United States Code, as amended by section 102, is
amended--
(1) in subsection (a)--
(A) in paragraph (8), by striking ``and'' at the end;
(B) in paragraph (9), by striking the period and inserting
a semicolon; and
(C) by adding at the end the following:
``(10) if with respect to the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (c); and''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (a)(10) to which
subsection (a)(10) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (a)(10) of such claim and of the
right of such holder to use the services of the State child
support enforcement agency established under sections 464 and
466 of the Social Security Act for the State in which such
holder resides, for assistance in collecting child support
during and after the case under this title;
``(ii) include in the notice provided under clause (i) the
address and telephone number of such State child support
enforcement agency; and
``(iii) include in the notice provided under clause (i) an
explanation of the rights of such holder to payment of such
claim under this chapter;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice provided under clause (i) the
name, address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge
under section 727, provide written notice to such holder and
to such State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2), (4), or (14A)
of section 523(a); or
``(II) was reaffirmed by the debtor under section 524(c).
``(2)(A) The holder of a claim described in subsection
(a)(10) or the State child support enforcement agency of the
State in which such holder resides may request from a
creditor described in paragraph (1)(C)(iv) 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 by reason of making such
disclosure.''.
(b) Duties of Trustee Under Chapter 11.--Section 1106 of
title 11, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (6), by striking ``and'' at the end;
(B) in paragraph (7), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(8) if with respect to the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (a)(8) to which
subsection (a)(8) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (a)(8) of such claim and of the right
of such holder to use the services of the State child support
enforcement agency established under sections 464 and 466 of
the Social Security Act for the State in which such holder
resides, for assistance in collecting child support during
and after the case under this title; and
``(ii) include in the notice required by clause (i) the
address and telephone number of such State child support
enforcement agency;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice required by clause (i) the
name, address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge
under section 1141, provide written notice to such holder and
to such State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2), (4), or (14A)
of section 523(a); or
``(II) was reaffirmed by the debtor under section 524(c).
``(2)(A) The holder of a claim described in subsection
(a)(8) or the State child enforcement support agency of the
State in which such holder resides may request from a
creditor described in paragraph (1)(C)(iv) 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 by reason of making such
disclosure.''.
(c) Duties of Trustee Under Chapter 12.--Section 1202 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 the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (b)(6) to which
subsection (b)(6) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (b)(6) of such claim and of the right
of such holder to use the services of the State child support
enforcement agency established under sections 464 and 466 of
the Social Security Act for the State in which such holder
resides, for assistance in collecting child support during
and after the case under this title; and
``(ii) include in the notice provided under clause (i) the
address and telephone number of such State child support
enforcement agency;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice provided under clause (i) the
name, address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge
under section 1228, provide written notice to such holder and
to such State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
[[Page S779]]
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2), (4), or (14A)
of section 523(a); or
``(II) was reaffirmed by the debtor under section 524(c).
``(2)(A) The holder of a claim described in subsection
(b)(6) or the State child support enforcement agency of the
State in which such holder resides may request from a
creditor described in paragraph (1)(C)(iv) 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 by reason of making that
disclosure.''.
(d) 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 the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (d).''; and
(2) by adding at the end the following:
``(d)(1) In a case described in subsection (b)(6) to which
subsection (b)(6) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (b)(6) of such claim and of the right
of such holder to use the services of the State child support
enforcement agency established under sections 464 and 466 of
the Social Security Act for the State in which such holder
resides, for assistance in collecting child support during
and after the case under this title; and
``(ii) include in the notice provided under clause (i) the
address and telephone number of such State child support
enforcement agency;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice provided under clause (i) the
name, address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge
under section 1328, provide written notice to such holder and
to such State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2) or (4) of
section 523(a); or
``(II) was reaffirmed by the debtor under section 524(c).
``(2)(A) The holder of a claim described in subsection
(b)(6) or the State child support enforcement agency of the
State in which such holder resides may request from a
creditor described in paragraph (1)(C)(iv) 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 by reason of making that
disclosure.''.
SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS
AND LOANS.
Section 523(a) of title 11, United States Code, is amended
by striking paragraph (8) and inserting the following:
``(8) unless excepting such debt from discharge under this
paragraph would impose an undue hardship on the debtor and
the debtor's dependents, for--
``(A)(i) 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
``(ii) an obligation to repay funds received as an
educational benefit, scholarship, or stipend; or
``(B) any other educational loan that is a qualified
education loan, as defined in section 221(d)(1) of the
Internal Revenue Code of 1986, incurred by a debtor who is an
individual;''.
Subtitle C--Other Consumer Protections
SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY
FILINGS.
Section 110 of title 11, United States Code, is amended--
(1) in subsection (a)(1), by striking ``or an employee of
an attorney'' and inserting ``for the debtor or an employee
of such attorney under the direct supervision of such
attorney'';
(2) in subsection (b)--
(A) in paragraph (1), by adding at the end the following:
``If a bankruptcy petition preparer is not an individual,
then an officer, principal, responsible person, or partner of
the bankruptcy petition preparer shall be required to--
``(A) sign the document for filing; and
``(B) print on the document the name and address of that
officer, principal, responsible person, or partner.''; and
(B) by striking paragraph (2) and inserting the following:
``(2)(A) Before preparing any document for filing or
accepting any fees from a debtor, the bankruptcy petition
preparer shall provide to the debtor a written notice which
shall be on an official form prescribed by the Judicial
Conference of the United States in accordance with rule 9009
of the Federal Rules of Bankruptcy Procedure.
``(B) The notice under subparagraph (A)--
``(i) shall inform the debtor in simple language that a
bankruptcy petition preparer is not an attorney and may not
practice law or give legal advice;
``(ii) may contain a description of examples of legal
advice that a bankruptcy petition preparer is not authorized
to give, in addition to any advice that the preparer may not
give by reason of subsection (e)(2); and
``(iii) shall--
``(I) be signed by the debtor and, under penalty of
perjury, by the bankruptcy petition preparer; and
``(II) be filed with any document for filing.'';
(3) in subsection (c)--
(A) in paragraph (2)--
(i) by striking ``(2) For purposes'' and inserting ``(2)(A)
Subject to subparagraph (B), for purposes''; and
(ii) by adding at the end the following:
``(B) If a bankruptcy petition preparer is not an
individual, the identifying number of the bankruptcy petition
preparer shall be the Social Security account number of the
officer, principal, responsible person, or partner of the
bankruptcy petition preparer.''; and
(B) by striking paragraph (3);
(4) in subsection (d)--
(A) by striking ``(d)(1)'' and inserting ``(d)''; and
(B) by striking paragraph (2);
(5) in subsection (e)--
(A) by striking paragraph (2); and
(B) by adding at the end the following:
``(2)(A) A bankruptcy petition preparer may not offer a
potential bankruptcy debtor any legal advice, including any
legal advice described in subparagraph (B).
``(B) The legal advice referred to in subparagraph (A)
includes advising the debtor--
``(i) whether--
``(I) to file a petition under this title; or
``(II) commencing a case under chapter 7, 11, 12, or 13 is
appropriate;
``(ii) whether the debtor's debts will be discharged in a
case under this title;
``(iii) whether the debtor will be able to retain the
debtor's home, car, or other property after commencing a case
under this title;
``(iv) concerning--
``(I) the tax consequences of a case brought under this
title; or
``(II) the dischargeability of tax claims;
``(v) whether the debtor may or should promise to repay
debts to a creditor or enter into a reaffirmation agreement
with a creditor to reaffirm a debt;
``(vi) concerning how to characterize the nature of the
debtor's interests in property or the debtor's debts; or
``(vii) concerning bankruptcy procedures and rights.'';
(6) in subsection (f)--
(A) by striking ``(f)(1)'' and inserting ``(f)''; and
(B) by striking paragraph (2);
(7) in subsection (g)--
(A) by striking ``(g)(1)'' and inserting ``(g)''; and
(B) by striking paragraph (2);
(8) in subsection (h)--
(A) by redesignating paragraphs (1) through (4) as
paragraphs (2) through (5), respectively;
(B) by inserting before paragraph (2), as so redesignated,
the following:
``(1) The Supreme Court may promulgate rules under section
2075 of title 28, or the Judicial Conference of the United
States may prescribe guidelines, for setting a maximum
allowable fee chargeable by a bankruptcy petition preparer. A
bankruptcy petition preparer shall notify the debtor of any
such maximum amount before preparing any document for filing
for a debtor or accepting any fee from the debtor.'';
(C) in paragraph (2), as so redesignated--
(i) by striking ``Within 10 days after the date of the
filing of a petition, a bankruptcy petition preparer shall
file a'' and inserting ``A'';
(ii) by inserting ``by the bankruptcy petition preparer
shall be filed together with the petition,'' after
``perjury''; and
(iii) by adding at the end the following: ``If rules or
guidelines setting a maximum fee for services have been
promulgated or prescribed under paragraph (1), the
declaration under this paragraph shall include a
certification that the bankruptcy petition preparer complied
with the notification requirement under paragraph (1).'';
(D) by striking paragraph (3), as so redesignated, and
inserting the following:
``(3)(A) The court shall disallow and order the immediate
turnover to the bankruptcy trustee any fee referred to in
paragraph (2) found to be in excess of the value of any
services--
``(i) rendered by the bankruptcy petition preparer during
the 12-month period immediately preceding the date of the
filing of the petition; or
``(ii) found to be in violation of any rule or guideline
promulgated or prescribed under paragraph (1).
``(B) All fees charged by a bankruptcy petition preparer
may be forfeited in any case in
[[Page S780]]
which the bankruptcy petition preparer fails to comply with
this subsection or subsection (b), (c), (d), (e), (f), or
(g).
``(C) An individual may exempt any funds recovered under
this paragraph under section 522(b).''; and
(E) in paragraph (4), as so redesignated, by striking ``or
the United States trustee'' and inserting ``the United States
trustee (or the bankruptcy administrator, if any) or the
court, on the initiative of the court,'';
(9) in subsection (i)(1), by striking the matter preceding
subparagraph (A) and inserting the following:
``(i)(1) If a bankruptcy petition preparer violates this
section or commits any act that the court finds to be
fraudulent, unfair, or deceptive, on the motion of the
debtor, trustee, United States trustee (or the bankruptcy
administrator, if any), and after notice and a hearing, the
court shall order the bankruptcy petition preparer to pay to
the debtor--'';
(10) in subsection (j)--
(A) in paragraph (2)--
(i) in subparagraph (A)(i)(I), by striking ``a violation of
which subjects a person to criminal penalty'';
(ii) in subparagraph (B)--
(I) by striking ``or has not paid a penalty'' and inserting
``has not paid a penalty''; and
(II) by inserting ``or failed to disgorge all fees ordered
by the court'' after ``a penalty imposed under this
section,'';
(B) by redesignating paragraph (3) as paragraph (4); and
(C) by inserting after paragraph (2) the following:
``(3) The court, as part of its contempt power, may enjoin
a bankruptcy petition preparer that has failed to comply with
a previous order issued under this section. The injunction
under this paragraph may be issued on the motion of the
court, the trustee, or the United States trustee (or the
bankruptcy administrator, if any).''; and
(11) by adding at the end the following:
``(l)(1) A bankruptcy petition preparer who fails to comply
with any provision of subsection (b), (c), (d), (e), (f),
(g), or (h) may be fined not more than $500 for each such
failure.
``(2) The court shall triple the amount of a fine assessed
under paragraph (1) in any case in which the court finds that
a bankruptcy petition preparer--
``(A) advised the debtor to exclude assets or income that
should have been included on applicable schedules;
``(B) advised the debtor to use a false Social Security
account number;
``(C) failed to inform the debtor that the debtor was
filing for relief under this title; or
``(D) prepared a document for filing in a manner that
failed to disclose the identity of the bankruptcy petition
preparer.
``(3) A debtor, trustee, creditor, or United States trustee
(or the bankruptcy administrator, if any) may file a motion
for an order imposing a fine on the bankruptcy petition
preparer for any violation of this section.
``(4)(A) Fines imposed under this subsection in judicial
districts served by United States trustees shall be paid to
the United States trustee, who shall deposit an amount equal
to such fines in a special account of the United States
Trustee System Fund referred to in section 586(e)(2) of title
28. Amounts deposited under this subparagraph shall be
available to fund the enforcement of this section on a
national basis.
``(B) Fines imposed under this subsection in judicial
districts served by bankruptcy administrators shall be
deposited as offsetting receipts to the fund established
under section 1931 of title 28, and shall remain available
until expended to reimburse any appropriation for the amount
paid out of such appropriation for expenses of the operation
and maintenance of the courts of the United States.''.
SEC. 222. SENSE OF CONGRESS.
It is the sense of Congress that States should develop
curricula relating to the subject of personal finance,
designed for use in elementary and secondary schools.
SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES
CODE.
Section 507(a) of title 11, United States Code, as amended
by section 212, is amended by inserting after paragraph (9)
the following:
``(10) Tenth, allowed claims for death or personal injury
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. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.
(a) In General.--Section 522 of title 11, United States
Code, is amended--
(1) in subsection (b)--
(A) in paragraph (2)--
(i) in subparagraph (A), by striking ``and'' at the end;
(ii) in subparagraph (B), by striking the period at the end
and inserting ``; and'';
(iii) by adding at the end the following:
``(C) retirement funds to the extent that those funds are
in a fund or account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986.''; and
(iv) by striking ``(2)(A) any property'' and inserting:
``(3) Property listed in this paragraph is--
``(A) any property'';
(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) by striking ``(b) Notwithstanding'' and inserting
``(b)(1) Notwithstanding'';
(D) by striking ``paragraph (2)'' each place it appears and
inserting ``paragraph (3)'';
(E) by striking ``paragraph (1)'' each place it appears and
inserting ``paragraph (2)'';
(F) by striking ``Such property is--''; and
(G) by adding at the end the following:
``(4) For purposes of paragraph (3)(C) and subsection
(d)(12), the following shall apply:
``(A) If the retirement funds are in a retirement fund that
has received a favorable determination under section 7805 of
the Internal Revenue Code of 1986, and that determination is
in effect as of the date of the filing of the petition in a
case under 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 under 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)(I) the retirement fund is in substantial compliance
with the applicable requirements of the Internal Revenue Code
of 1986; or
``(II) the retirement fund fails to be in substantial
compliance with the applicable requirements of the Internal
Revenue Code of 1986 and the debtor is not materially
responsible for that failure.
``(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, under section 401(a)(31) of the Internal Revenue
Code of 1986, or otherwise, shall not cease to qualify for
exemption under paragraph (3)(C) or subsection (d)(12) by
reason of such direct transfer.
``(D)(i) Any distribution that qualifies as an eligible
rollover distribution within the meaning of section 402(c) of
the Internal Revenue Code of 1986 or that is described in
clause (ii) shall not cease to qualify for exemption under
paragraph (3)(C) or subsection (d)(12) by reason of such
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 such 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, is amended--
(1) in paragraph (17), by striking ``or'' at the end;
(2) in paragraph (18), by striking the period and inserting
a semicolon; and
(3) by inserting after paragraph (18) the following:
``(19) under subsection (a), of withholding of income from
a debtor's wages and collection of amounts withheld, under
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(c) 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
under 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) a loan from a thrift savings plan permitted under
subchapter III of chapter 84 of title 5, that satisfies the
requirements of section 8433(g) of such title;
but nothing in this paragraph 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, as amended by section 215, is amended by
inserting after paragraph (17) the following:
``(18) 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,
under--
``(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 a thrift savings plan permitted under
subchapter III of chapter 84 of title 5, that satisfies the
requirements of section 8433(g) of such title;
but nothing in this paragraph 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
[[Page S781]]
the Internal Revenue Code of 1986 constitutes a claim or a
debt under this title; or''.
(d) Plan Contents.--Section 1322 of title 11, United States
Code, is amended by adding at the end the following:
``(f) A plan may not materially alter the terms of a loan
described in section 362(b)(19) and any amounts required to
repay such loan shall not constitute `disposable income'
under section 1325.''.
(e) Asset Limitation.--
(1) Limitation.--Section 522 of title 11, United States
Code, is amended by adding at the end the following:
``(n) For assets in individual retirement accounts
described in section 408 or 408A of the Internal Revenue Code
of 1986, other than a simplified employee pension under
section 408(k) of such Code or a simple retirement account
under section 408(p) of such Code, the aggregate value of
such assets exempted under this section, without regard to
amounts attributable to rollover contributions under section
402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the
Internal Revenue Code of 1986, and earnings thereon, shall
not exceed $1,000,000 in a case filed by a debtor who is an
individual, except that such amount may be increased if the
interests of justice so require.''.
(2) Adjustment of dollar amounts.--Paragraphs (1) and (2)
of section 104(b) of title 11, United States Code, are
amended by inserting ``522(n),'' after ``522(d),''.
SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.
(a) Exclusions.--Section 541 of title 11, United States
Code, is amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``or'' at the end;
(B) by redesignating paragraph (5) as paragraph (9); and
(C) by inserting after paragraph (4) the following:
``(5) funds placed in an education individual retirement
account (as defined in section 530(b)(1) of the Internal
Revenue Code of 1986) not later than 365 days before the date
of the filing of the petition in a case under this title,
but--
``(A) only if the designated beneficiary of such account
was a child, stepchild, grandchild, or stepgrandchild of the
debtor for the taxable year for which funds were placed in
such account;
``(B) only to the extent that 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
``(C) in the case of funds placed in all such accounts
having the same designated beneficiary not earlier than 720
days nor later than 365 days before such date, only so much
of such funds as does not exceed $5,000;
``(6) funds used to purchase a tuition credit or
certificate or contributed to an account in accordance with
section 529(b)(1)(A) of the Internal Revenue Code of 1986
under a qualified State tuition program (as defined in
section 529(b)(1) of such Code) not later than 365 days
before the date of the filing of the petition in a case under
this title, but--
``(A) only if the designated beneficiary of the amounts
paid or contributed to such tuition program was a child,
stepchild, grandchild, or stepgrandchild of the debtor for
the taxable year for which funds were paid or contributed;
``(B) with respect to the aggregate amount paid or
contributed to such program having the same designated
beneficiary, only so much of such amount as does not exceed
the total contributions permitted under section 529(b)(7) of
such Code with respect to such beneficiary, as adjusted
beginning on the date of the filing of the petition in a case
under this title by the annual increase or decrease (rounded
to the nearest tenth of 1 percent) in the education
expenditure category of the Consumer Price Index prepared by
the Department of Labor; and
``(C) in the case of funds paid or contributed to such
program having the same designated beneficiary not earlier
than 720 days nor later than 365 days before such date, only
so much of such funds as does not exceed $5,000;''; and
(2) by adding at the end the following:
``(e) In determining whether any of the relationships
specified in paragraph (5)(A) or (6)(A) of subsection (b)
exists, a legally adopted child of an individual (and a child
who is a member of an individual's household, if placed with
such individual by an authorized placement agency for legal
adoption by such individual), or a foster child of an
individual (if such child has as the child's principal place
of abode the home of the debtor and is a member of the
debtor's household) shall be treated as a child of such
individual by blood.''.
(b) Debtor's Duties.--Section 521 of title 11, United
States Code, as amended by section 106, is amended by adding
at the end the following:
``(c) In addition to meeting the requirements under
subsection (a), a debtor shall file with the court a record
of any interest that a debtor has in an education individual
retirement account (as defined in section 530(b)(1) of the
Internal Revenue Code of 1986) or under a qualified State
tuition program (as defined in section 529(b)(1) of such
Code).''.
SEC. 226. 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 the value of whose
nonexempt property is 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 case or proceeding on
behalf of another or providing legal representation with
respect to a case or proceeding under this title;''; and
(3) by inserting after paragraph (12) the following:
``(12A) `debt relief agency' means any person who provides
any bankruptcy assistance to an assisted person in return for
the payment of money or other valuable consideration, or who
is a bankruptcy petition preparer under section 110, but does
not include--
``(A) any person who is an officer, director, employee, or
agent of a person who provides such assistance or of the
bankruptcy petition preparer;
``(B) a nonprofit organization that is exempt from taxation
under section 501(c)(3) of the Internal Revenue Code of 1986;
``(C) a creditor of such assisted person, to the extent
that the creditor is assisting such assisted person to
restructure any debt owed by such assisted person to the
creditor;
``(D) a 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 depository institution or
credit union; or
``(E) an author, publisher, distributor, or seller of works
subject to copyright protection under title 17, when acting
in such capacity.''.
(b) Conforming Amendment.--Section 104(b) of title 11,
United States Code, is amended by inserting ``101(3),'' after
``sections'' each place it appears.
SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.
(a) Enforcement.--Subchapter II of chapter 5 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 526. Restrictions on debt relief agencies
``(a) A debt relief agency shall not--
``(1) fail to perform any service that such agency informed
an assisted person or prospective assisted person it would
provide in connection with a case or proceeding under this
title;
``(2) make any statement, or counsel or advise any assisted
person or prospective assisted person to make a statement in
a document filed in a case or proceeding under this title,
that is untrue and misleading, or that upon the exercise of
reasonable care, should have been known by such agency to be
untrue or misleading;
``(3) misrepresent to any assisted person or prospective
assisted person, directly or indirectly, affirmatively or by
material omission, with respect to--
``(A) the services that such agency will provide to such
person; or
``(B) the benefits and risks that may result if such person
becomes a debtor in a case under this title; or
``(4) advise an assisted person or prospective assisted
person to incur more debt in contemplation of such person
filing a case under this title or 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 case under this title.
``(b) Any waiver by any assisted person of any protection
or right provided 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)(1) Any contract for bankruptcy assistance between a
debt relief agency and an assisted person that does not
comply with the material requirements of this section,
section 527, or section 528 shall be void and may not be
enforced by any Federal or State court or by any other
person, other than such assisted 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 that such
debt relief agency has received, for actual damages, and for
reasonable attorneys' fees and costs if such agency is found,
after notice and a hearing, to have--
``(A) intentionally or negligently failed to comply with
any provision of this section, section 527, or section 528
with respect to a case or proceeding under this title for
such assisted person;
``(B) provided bankruptcy assistance to an assisted person
in a case or proceeding under this title that is dismissed or
converted to a case under another chapter of this title
because of such agency's intentional or negligent failure to
file any required document including those specified in
section 521; or
``(C) intentionally or negligently disregarded the material
requirements of this title or the Federal Rules of Bankruptcy
Procedure applicable to such agency.
``(3) In addition to such other remedies as are provided
under State law, whenever the
[[Page S782]]
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 attorneys' fees as determined by the
court.
``(4) The district courts of the United States for
districts 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.
``(d) No provision of this section, section 527, or section
528 shall--
``(1) annul, alter, affect, or exempt any person subject to
such 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;
or
``(2) be deemed to limit or curtail the authority or
ability--
``(A) of a State or subdivision or instrumentality thereof,
to determine and enforce qualifications for the practice of
law under the laws of that State; or
``(B) of a Federal court to determine and enforce the
qualifications for the practice of law before that court.''.
(b) Conforming Amendment.--The table of sections for
chapter 5 of title 11, United States Code, is amended by
inserting after the item relating to section 525, the
following:
``526. Restrictions on debt relief agencies.''.
SEC. 228. DISCLOSURES.
(a) Disclosures.--Subchapter II of chapter 5 of title 11,
United States Code, as amended by section 227, 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--
``(1) the written notice required under section 342(b)(1);
and
``(2) to the extent not covered in the written notice
described in paragraph (1), and not later than 3 business
days after the first date on which a debt relief agency first
offers to provide any bankruptcy assistance services to an
assisted person, a clear and conspicuous written notice
advising assisted persons that--
``(A) all information that the assisted person is required
to provide with a petition and thereafter during a case under
this title is required to be complete, accurate, and
truthful;
``(B) all assets and all liabilities are required to 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 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 case under chapter 13 of this
title, disposable income (determined in accordance with
section 707(b)(2)), are required to be stated after
reasonable inquiry; and
``(D) information that 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 case under this title or other sanction, including a
criminal sanction.
``(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)
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 available under 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. A creditor is not permitted to
coerce you into reaffirming your debts.
`` `If you choose to file a chapter 13 case in which you
repay your creditors what you can afford over 3 to 5 years,
you may also want help with preparing your chapter 13 plan
and with the confirmation hearing on your plan which will be
before a bankruptcy judge.
`` `If you select another type of relief under the
Bankruptcy Code other than chapter 7 or chapter 13, you will
want to find out what should 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.
``(d) A debt relief agency shall maintain a copy of the
notices required under subsection (a) of this section for 2
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 227, is amended by inserting after the item relating
to section 526 the following:
``527. Disclosures.''.
SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.
(a) Enforcement.--Subchapter II of chapter 5 of title 11,
United States Code, as amended by sections 227 and 228, is
amended by adding at the end the following:
``Sec. 528. Requirements for debt relief agencies
``(a) A debt relief agency shall--
``(1) not later than 5 business days after the first date
on which such 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 such assisted person that explains
clearly and conspicuously--
``(A) the services such agency will provide to such
assisted person; and
``(B) the fees or charges for such services, and the terms
of payment;
``(2) provide the assisted person with a copy of the fully
executed and completed contract;
``(3) clearly and conspicuously 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 bankruptcy relief
under this title; and
``(4) clearly and conspicuously use the following statement
in such advertisement: `We are a debt relief agency. We help
people file for bankruptcy relief under the Bankruptcy Code.'
or a substantially similar statement.
``(b)(1) An advertisement of bankruptcy assistance services
or of the benefits of bankruptcy directed to the general
public includes--
``(A) descriptions of bankruptcy assistance in connection
with a chapter 13 plan whether or not chapter 13 is
specifically mentioned in such advertisement; and
``(B) statements such as `federally supervised repayment
plan' or `Federal debt restructuring help' or other similar
statements
[[Page S783]]
that could lead a reasonable consumer to believe that debt
counseling was being offered when in fact the services were
directed to providing bankruptcy assistance with a chapter 13
plan or other form of bankruptcy relief under this title.
``(2) An advertisement, directed to the general public,
indicating that the debt relief agency provides assistance
with respect to credit defaults, mortgage foreclosures,
eviction proceedings, excessive debt, debt collection
pressure, or inability to pay any consumer debt shall--
``(A) disclose clearly and conspicuously in such
advertisement that the assistance may involve bankruptcy
relief under this title; and
``(B) include the following statement: `We are a debt
relief agency. We help people file for bankruptcy 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
section 227 and 228, is amended by inserting after the item
relating to section 527, the following:
``528. Requirements for debt relief agencies.''.
SEC. 230. GAO STUDY.
(a) Study.--Not later than 270 days after the date of
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, United States Code, or the bankruptcy courts, to
provide to the Office of Child Support Enforcement promptly
after the commencement of cases by debtors who are
individuals under such title, the names and social security
account 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
enactment of this Act, the Comptroller General shall submit
to the President pro tempore of the Senate and the Speaker of
the House of Representatives a report containing the results
of the study required by subsection (a).
SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.
(a) Limitation.--Section 363(b)(1) of title 11, United
States Code, is amended by striking the period at the end and
inserting the following:
``, except that if the debtor in connection with offering a
product or a service discloses to an individual a policy
prohibiting the transfer of personally identifiable
information about individuals to persons that are not
affiliated with the debtor and if such policy is in effect on
the date of the commencement of the case, then the trustee
may not sell or lease personally identifiable information to
any person unless--
``(A) such sale or such lease is consistent with such
policy; or
``(B) after appointment of a consumer privacy ombudsman in
accordance with section 332, and after notice and a hearing,
the court approves such sale or such lease--
``(i) giving due consideration to the facts, circumstances,
and conditions of such sale or such lease; and
``(ii) finding that no showing was made that such sale or
such lease would violate applicable nonbankruptcy law.''.
(b) Definition.--Section 101 of title 11, United States
Code, is amended by inserting after paragraph (41) the
following:
``(41A) `personally identifiable information' means--
``(A) if provided by an individual to the debtor in
connection with obtaining a product or a service from the
debtor primarily for personal, family, or household
purposes--
``(i) the first name (or initial) and last name of such
individual, whether given at birth or time of adoption, or
resulting from a lawful change of name;
``(ii) the geographical address of a physical place of
residence of such individual;
``(iii) an electronic address (including an e-mail address)
of such individual;
``(iv) a telephone number dedicated to contacting such
individual at such physical place of residence;
``(v) a social security account number issued to such
individual; or
``(vi) the account number of a credit card issued to such
individual; or
``(B) if identified in connection with 1 or more of the
items of information specified in subparagraph (A)--
``(i) a birth date, the number of a certificate of birth or
adoption, or a place of birth; or
``(ii) any other information concerning an identified
individual that, if disclosed, will result in contacting or
identifying such individual physically or electronically;''.
SEC. 232. CONSUMER PRIVACY OMBUDSMAN.
(a) Consumer Privacy Ombudsman.--Title 11 of the United
States Code is amended by inserting after section 331 the
following:
``Sec. 332. Consumer privacy ombudsman
``(a) If a hearing is required under section 363(b)(1)(B),
the court shall order the United States trustee to appoint,
not later than 5 days before the commencement of the hearing,
1 disinterested person (other than the United States trustee)
to serve as the consumer privacy ombudsman in the case and
shall require that notice of such hearing be timely given to
such ombudsman.
``(b) The consumer privacy ombudsman may appear and be
heard at such hearing and shall provide to the court
information to assist the court in its consideration of the
facts, circumstances, and conditions of the proposed sale or
lease of personally identifiable information under section
363(b)(1)(B). Such information may include presentation of--
``(1) the debtor's privacy policy;
``(2) the potential losses or gains of privacy to consumers
if such sale or such lease is approved by the court;
``(3) the potential costs or benefits to consumers if such
sale or such lease is approved by the court; and
``(4) the potential alternatives that would mitigate
potential privacy losses or potential costs to consumers.
``(c) A consumer privacy ombudsman shall not disclose any
personally identifiable information obtained by the ombudsman
under this title.''.
(b) Compensation of Consumer Privacy Ombudsman.--Section
330(a)(1) of title 11, United States Code, is amended in the
matter preceding subparagraph (A), by inserting ``a consumer
privacy ombudsman appointed under section 332,'' before ``an
examiner''.
(c) Conforming Amendment.--The table of sections for
subchapter II of chapter 3 of title 11, United States Code,
is amended by adding at the end the following:
``332. Consumer privacy ombudsman.''.
SEC. 233. PROHIBITION ON DISCLOSURE OF NAME OF MINOR
CHILDREN.
(a) Prohibition.--Title 11 of the United States Code, as
amended by section 106, is amended by inserting after section
111 the following:
``Sec. 112. Prohibition on disclosure of name of minor
children
``The debtor may be required to provide information
regarding a minor child involved in matters under this title
but may not be required to disclose in the public records in
the case the name of such minor child. The debtor may be
required to disclose the name of such minor child in a
nonpublic record that is maintained by the court and made
available by the court for examination by the United States
trustee, the trustee, and the auditor (if any) serving under
section 586(f) of title 28, in the case. The court, the
United States trustee, the trustee, and such auditor shall
not disclose the name of such minor child maintained in such
nonpublic record.''.
(b) Clerical Amendment.--The table of sections for chapter
1 of title 11, United States Code, as amended by section 106,
is amended by inserting after the item relating to section
111 the following:
``112. Prohibition on disclosure of name of minor children.''.
(c) Conforming Amendment.--Section 107(a) of title 11,
United States Code, is amended by inserting ``and subject to
section 112'' after ``section''.
TITLE III --DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. TECHNICAL AMENDMENTS.
Section 523(a)(17) of title 11, United States Code, is
amended--
(1) by striking ``by a court'' and inserting ``on a
prisoner by any court'';
(2) by striking ``section 1915(b) or (f)'' and inserting
``subsection (b) or (f)(2) of section 1915''; and
(3) by inserting ``(or a similar non-Federal law)'' after
``title 28'' each place it appears.
SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is
amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(3) if a single or joint case is filed by or against
debtor who is an individual in a case under chapter 7, 11, or
13, and if a single or joint case of the debtor was pending
within the preceding 1-year period but was dismissed, other
than a case refiled under a chapter other than chapter 7
after dismissal under section 707(b)--
``(A) the stay under subsection (a) with respect to any
action taken with respect to a debt or property securing such
debt or with respect to any lease shall terminate with
respect to the debtor on the 30th day after the filing of the
later case;
``(B) on the motion of a party in interest for continuation
of the automatic stay and upon notice and a hearing, the
court may extend the stay in particular cases as to any or
all creditors (subject to such conditions or limitations as
the court may then impose) after notice and a hearing
completed before the expiration of the 30-day period only if
the party in interest demonstrates that the filing of the
later case is in good faith as to the creditors to be stayed;
and
``(C) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption
may be rebutted by clear and convincing evidence to the
contrary)--
``(i) as to all creditors, if--
``(I) more than 1 previous case under any of chapters 7,
11, and 13 in which the individual was a debtor was pending
within the preceding 1-year period;
``(II) a previous case under any of chapters 7, 11, and 13
in which the individual was a debtor was dismissed within
such 1-year period, after the debtor failed to--
``(aa) file or amend the petition or other documents as
required by this title or the
[[Page S784]]
court without substantial excuse (but mere inadvertence or
negligence shall not be a substantial excuse unless the
dismissal was caused by the negligence of the debtor's
attorney);
``(bb) provide adequate protection as ordered by the court;
or
``(cc) perform the terms of a plan confirmed by the court;
or
``(III) there has not been a substantial change in the
financial or personal affairs of the debtor since the
dismissal of the next most previous case under chapter 7, 11,
or 13 or any other reason to conclude that the later case
will be concluded--
``(aa) if a case under chapter 7, with a discharge; or
``(bb) if a case under chapter 11 or 13, with a confirmed
plan that will be fully performed; and
``(ii) as to any creditor that commenced an action under
subsection (d) in a previous case in which the individual was
a debtor if, as of the date of dismissal of such case, that
action was still pending or had been resolved by terminating,
conditioning, or limiting the stay as to actions of such
creditor; and
``(4)(A)(i) if a single or joint case is filed by or
against a debtor who is an individual under this title, and
if 2 or more single or joint cases of the debtor were pending
within the previous year but were dismissed, other than a
case refiled under section 707(b), the stay under subsection
(a) shall not go into effect upon the filing of the later
case; and
``(ii) on request of a party in interest, the court shall
promptly enter an order confirming that no stay is in effect;
``(B) if, within 30 days after the filing of the later
case, a party in interest requests the court may order the
stay to take effect in the case as to any or all creditors
(subject to such conditions or limitations as the court may
impose), after notice and a hearing, only if the party in
interest demonstrates that the filing of the later case is in
good faith as to the creditors to be stayed;
``(C) a stay imposed under subparagraph (B) shall be
effective on the date of the entry of the order allowing the
stay to go into effect; and
``(D) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption
may be rebutted by clear and convincing evidence to the
contrary)--
``(i) as to all creditors if--
``(I) 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
any other reason to conclude that the later case will not be
concluded, if a case under chapter 7, with a discharge, and
if a case under chapter 11 or 13, with a confirmed plan that
will be fully performed; or
``(ii) as to any creditor that commenced an action under
subsection (d) in a previous case in which the individual was
a debtor if, as of the date of dismissal of such case, such
action was still pending or had been resolved by terminating,
conditioning, or limiting the stay as to such action of such
creditor.''.
SEC. 303. CURBING ABUSIVE FILINGS.
(a) In General.--Section 362(d) of title 11, United States
Code, is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) with respect to a stay of an act against real
property under subsection (a), by a creditor whose claim is
secured by an interest in such real property, if the court
finds that the filing of the 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, such real property without the consent of the
secured creditor or court approval; or
``(B) multiple bankruptcy filings affecting such real
property.
If recorded in compliance with applicable State laws
governing notices of interests or liens in real property, an
order entered under paragraph (4) shall be binding in any
other case under this title purporting to affect such real
property filed not later than 2 years after the date of the
entry of such order by the court, except that a debtor in a
subsequent case under this title 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 that 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, as amended by section 224, is amended by
inserting after paragraph (19), the following:
``(20) under subsection (a), of any act to enforce any lien
against or security interest in real property following entry
of the order under subsection (d)(4) as to such real property
in any prior case under this title, for a period of 2 years
after the date of the entry of such an order, except that the
debtor, in a subsequent case under this title, may move for
relief from such order based upon changed circumstances or
for other good cause shown, after notice and a hearing;
``(21) under subsection (a), of any act to enforce any lien
against or security interest in real property--
``(A) if the debtor is ineligible under section 109(g) to
be a debtor in a case under this title; or
``(B) if the case under this title was filed in violation
of a bankruptcy court order in a prior case under this title
prohibiting the debtor from being a debtor in another case
under this title;''.
SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(1) in section 521(a), as so designated by section 106--
(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 a case under chapter 7 of this title in which the
debtor is an individual, 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
such personal property unless the debtor, not later than 45
days after the first meeting of creditors under section
341(a), either--
``(A) enters into an agreement with the creditor pursuant
to section 524(c) with respect to the claim secured by such
property; or
``(B) redeems such property from the security interest
pursuant to section 722.
If the debtor fails to so act within the 45-day period
referred to in paragraph (6), the stay under section 362(a)
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 filed 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. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES
NOT COMPLETE INTENDED SURRENDER OF CONSUMER
DEBT COLLATERAL.
Title 11, United States Code, is amended--
(1) in section 362, as amended by section 106--
(A) in subsection (c), by striking ``(e), and (f)'' and
inserting ``(e), (f), and (h)'';
(B) by redesignating subsection (h) as subsection (k) and
transferring such subsection so as to insert it after
subsection (j) as added by section 106; and
(C) by inserting after subsection (g) the following:
``(h)(1) In a case in which the debtor is an individual,
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)--
``(A) to file timely any statement of intention required
under section 521(a)(2) with respect to such personal
property or to indicate in such statement that the debtor
will either surrender such personal property or retain it
and, if retaining such personal property, either redeem such
personal property pursuant to section 722, enter into an
agreement of the kind specified in section 524(c) applicable
to the debt secured by such personal property, or assume such
unexpired lease pursuant to section 365(p) if the trustee
does not do so, as applicable; and
``(B) to take timely the action specified in such
statement, as it may be amended before expiration of the
period for taking action, unless such statement specifies the
debtor's intention to reaffirm such debt on the original
contract terms and the creditor refuses to agree to the
reaffirmation on such terms.
``(2) Paragraph (1) does not apply if the court determines,
on the motion of the trustee filed before the expiration of
the applicable time set by section 521(a)(2), after notice
and a hearing, that such personal property is of
consequential value or benefit to the estate, and 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, the stay provided by subsection (a) shall
terminate upon the conclusion of the hearing on the
motion.''; and
(2) in section 521, as amended by sections 106 and 225--
(A) in subsection (a)(2) by striking ``consumer'';
(B) in subsection (a)(2)(B)--
[[Page S785]]
(i) by striking ``forty-five days after the filing of a
notice of intent under this section'' and inserting ``30 days
after the first date set for the meeting of creditors under
section 341(a)''; and
(ii) by striking ``forty-five day'' and inserting ``30-
day'';
(C) in subsection (a)(2)(C) by inserting ``, except as
provided in section 362(h)'' before the semicolon; and
(D) by adding at the end the following:
``(d) 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), 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, nothing in this
title shall prevent or limit the operation of a provision in
the underlying lease or agreement that has the effect of
placing the debtor in default under 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. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER
13.
(a) In General.--Section 1325(a)(5)(B)(i) of title 11,
United States Code, is amended to read as follows:
``(i) the plan provides that--
``(I) the holder of such claim retain the lien securing
such claim until the earlier of--
``(aa) the payment of the underlying debt determined under
nonbankruptcy law; or
``(bb) discharge under section 1328; and
``(II) if the case under this chapter is dismissed or
converted without completion of the plan, such lien shall
also be retained by such holder to the extent recognized by
applicable nonbankruptcy law; and''.
(b) Restoring the Foundation for Secured Credit.--Section
1325(a) of title 11, United States Code, is amended by adding
at the end the following:
``For purposes of paragraph (5), section 506 shall not apply
to a claim described in that paragraph if the creditor has a
purchase money security interest securing the debt that is
the subject of the claim, the debt was incurred within the
910-day preceding the date of the filing of the petition, and
the collateral for that debt consists of a motor vehicle (as
defined in section 30102 of title 49) acquired for the
personal use of the debtor, or if collateral for that debt
consists of any other thing of value, if the debt was
incurred during the 1-year period preceding that filing.''.
(c) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by inserting after paragraph (13) the following:
``(13A) `debtor's principal residence'--
``(A) means a residential structure, including incidental
property, without regard to whether that structure is
attached to real property; and
``(B) includes an individual condominium or cooperative
unit, a mobile or manufactured home, or trailer;''; and
(2) by inserting after paragraph (27), the following:
``(27A) `incidental property' means, with respect to a
debtor's principal residence--
``(A) property commonly conveyed with a principal residence
in the area where the real property is located;
``(B) all easements, rights, appurtenances, fixtures,
rents, royalties, mineral rights, oil or gas rights or
profits, water rights, escrow funds, or insurance proceeds;
and
``(C) all replacements or additions;''.
SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.
Section 522(b)(3) of title 11, United States Code, as so
designated by section 106, is amended--
(1) in subparagraph (A)--
(A) by striking ``180 days'' and inserting ``730 days'';
and
(B) 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''; and
(2) by adding at the end the following:
``If the effect of the domiciliary requirement under
subparagraph (A) is to render the debtor ineligible for any
exemption, the debtor may elect to exempt property that is
specified under subsection (d).''.
SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.
Section 522 of title 11, United States Code, as amended by
section 224, is amended--
(1) in subsection (b)(3)(A), as so designated by this Act,
by inserting ``subject to subsections (o) and (p),'' 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;
``(3) a burial plot for the debtor or a dependent of the
debtor; or
``(4) real or personal property that the debtor or a
dependent of the debtor claims as a homestead;
shall be reduced to the extent that such value is
attributable to any portion of any property that the debtor
disposed of in the 10-year period ending on the date of the
filing of the petition with the intent to hinder, delay, or
defraud a creditor and that the debtor could not exempt, or
that portion that the debtor could not exempt, under
subsection (b), if on such date the debtor had held the
property so disposed of.''.
SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.
(a) Stopping Abusive Conversions From Chapter 13.--Section
348(f)(1) of title 11, United States Code, is amended--
(1) in subparagraph (A), by striking ``and'' at the end;
(2) in subparagraph (B)--
(A) by striking ``in the converted case, with allowed
secured claims'' and inserting ``only in a case converted to
a case under chapter 11 or 12, but not in a case converted to
a case under 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 case under chapter 13; and
``(ii) unless a prebankruptcy default has been fully cured
under the plan at the time of conversion, in any proceeding
under this title or otherwise, the default shall have the
effect given under applicable nonbankruptcy law.''.
(b) Giving Debtors the Ability To Keep Leased Personal
Property by Assumption.--Section 365 of title 11, United
States Code, is amended by adding at the end the following:
``(p)(1) If a lease of personal property is rejected or not
timely assumed by the trustee under subsection (d), the
leased property is no longer property of the estate and the
stay under section 362(a) is automatically terminated.
``(2)(A) If the debtor in a case under chapter 7 is an
individual, the debtor may notify the creditor in writing
that the debtor desires to assume the lease. Upon being so
notified, the creditor may, at its option, notify the debtor
that it is willing to have the lease assumed by the debtor
and may condition such assumption on cure of any outstanding
default on terms set by the contract.
``(B) If, not later than 30 days after notice is provided
under subparagraph (A), the debtor notifies the lessor in
writing that the lease is assumed, the liability under the
lease will be assumed by the debtor and not by the estate.
``(C) The stay under section 362 and the injunction under
section 524(a)(2) shall not be violated by notification of
the debtor and negotiation of cure under this subsection.
``(3) In a case under chapter 11 in which the debtor is an
individual and in a case under chapter 13, if the debtor is
the lessee with respect to personal property and the lease is
not assumed in the plan confirmed by the court, the lease is
deemed rejected as of the conclusion of the hearing on
confirmation. If the lease is rejected, the stay under
section 362 and any stay under section 1301 is automatically
terminated with respect to the property subject to the
lease.''.
(c) Adequate Protection of Lessors and Purchase Money
Secured Creditors.--
(1) Confirmation of plan.--Section 1325(a)(5)(B) of title
11, United States Code, as amended by section 306, is
amended--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by striking ``or'' at the end and
inserting ``and''; and
(C) by adding at the end the following:
``(iii) if--
``(I) property to be distributed pursuant to this
subsection is in the form of periodic payments, such payments
shall be in equal monthly amounts; and
``(II) the holder of the claim is secured by personal
property, the amount of such payments shall not be less than
an amount sufficient to provide to the holder of such claim
adequate protection during the period of the plan; or''.
(2) Payments.--Section 1326(a) of title 11, United States
Code, is amended to read as follows:
``(a)(1) Unless the court orders otherwise, the debtor
shall commence making payments not later than 30 days after
the date of the filing of the plan or the order for relief,
whichever is earlier, in the amount--
``(A) proposed by the plan to the trustee;
``(B) scheduled in a lease of personal property directly to
the lessor for that portion of the obligation that becomes
due after the order for relief, reducing the payments under
subparagraph (A) by the amount so paid and providing the
trustee with evidence of such payment, including the amount
and date of payment; and
``(C) that provides adequate protection directly to a
creditor holding an allowed claim secured by personal
property to the extent the claim is attributable to the
purchase of such property by the debtor for that portion
[[Page S786]]
of the obligation that becomes due after the order for
relief, reducing the payments under subparagraph (A) by the
amount so paid and providing the trustee with evidence of
such payment, including the amount and date of payment.
``(2) A payment made under paragraph (1)(A) shall be
retained by the trustee until confirmation or denial of
confirmation. If a plan is confirmed, the trustee shall
distribute any such payment in accordance with the plan as
soon as is practicable. If a plan is not confirmed, the
trustee shall return any such payments not previously paid
and not yet due and owing to creditors pursuant to paragraph
(3) to the debtor, after deducting any unpaid claim allowed
under section 503(b).
``(3) Subject to section 363, the court may, upon notice
and a hearing, modify, increase, or reduce the payments
required under this subsection pending confirmation of a
plan.
``(4) Not later than 60 days after the date of filing of a
case under this chapter, a debtor retaining possession of
personal property subject to a lease or securing a claim
attributable in whole or in part to the purchase price of
such property shall provide the lessor or secured creditor
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.''.
SEC. 310. LIMITATION ON LUXURY GOODS.
Section 523(a)(2)(C) of title 11, United States Code, is
amended to read as follows:
``(C)(i) for purposes of subparagraph (A)--
``(I) consumer debts owed to a single creditor and
aggregating more than $500 for luxury goods or services
incurred by an individual debtor on or within 90 days before
the order for relief under this title are presumed to be
nondischargeable; and
``(II) cash advances aggregating more than $750 that are
extensions of consumer credit under an open end credit plan
obtained by an individual debtor on or within 70 days before
the order for relief under this title, are presumed to be
nondischargeable; and
``(ii) for purposes of this subparagraph--
``(I) the terms `consumer', `credit', and `open end credit
plan' have the same meanings as in section 103 of the Truth
in Lending Act; and
``(II) the term `luxury goods or services' does not include
goods or services reasonably necessary for the support or
maintenance of the debtor or a dependent of the debtor.''.
SEC. 311. AUTOMATIC STAY.
(a) In general.--Section 362(b) of title 11, United States
Code, as amended by sections 224 and 303, is amended by
inserting after paragraph (21), the following:
``(22) subject to subsection (l), under subsection (a)(3),
of the continuation of any eviction, unlawful detainer
action, or similar proceeding by a lessor against a debtor
involving residential property in which the debtor resides as
a tenant under a lease or rental agreement and with respect
to which the lessor has obtained before the date of the
filing of the bankruptcy petition, a judgment for possession
of such property against the debtor;
``(23) subject to subsection (m), under subsection (a)(3),
of an eviction action that seeks possession of the
residential property in which the debtor resides as a tenant
under a lease or rental agreement based on endangerment of
such property or the illegal use of controlled substances on
such property, but only if the lessor files with the court,
and serves upon the debtor, a certification under penalty of
perjury that such an eviction action has been filed, or that
the debtor, during the 30-day period preceding the date of
the filing of the certification, has endangered property or
illegally used or allowed to be used a controlled substance
on the property;
``(24) under subsection (a), of any transfer that is not
avoidable under section 544 and that is not avoidable under
section 549;''.
(b) Limitations.--Section 362 of title 11, United States
Code, as amended by sections 106 and 305, is amended by
adding at the end the following:
``(l)(1) Except as otherwise provided in this subsection,
subsection (b)(22) shall apply on the date that is 30 days
after the date on which the bankruptcy petition is filed, if
the debtor files with the petition and serves upon the lessor
a certification under penalty of perjury that--
``(A) under nonbankruptcy law applicable in the
jurisdiction, there are circumstances under which the debtor
would be permitted to cure the entire monetary default that
gave rise to the judgment for possession, after that judgment
for possession was entered; and
``(B) the debtor (or an adult dependent of the debtor) has
deposited with the clerk of the court, any rent that would
become due during the 30-day period after the filing of the
bankruptcy petition.
``(2) If, within the 30-day period after the filing of the
bankruptcy petition, the debtor (or an adult dependent of the
debtor) complies with paragraph (1) and files with the court
and serves upon the lessor a further certification under
penalty of perjury that the debtor (or an adult dependent of
the debtor) has cured, under nonbankrupcty law applicable in
the jurisdiction, the entire monetary default that gave rise
to the judgment under which possession is sought by the
lessor, subsection (b)(22) shall not apply, unless ordered to
apply by the court under paragraph (3).
``(3)(A) If the lessor files an objection to any
certification filed by the debtor under paragraph (1) or (2),
and serves such objection upon the debtor, the court shall
hold a hearing within 10 days after the filing and service of
such objection to determine if the certification filed by the
debtor under paragraph (1) or (2) is true.
``(B) If the court upholds the objection of the lessor
filed under subparagraph (A)--
``(i) subsection (b)(22) shall apply immediately and relief
from the stay provided under subsection (a)(3) shall not be
required to enable the lessor to complete the process to
recover full possession of the property; and
``(ii) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the court's
order upholding the lessor's objection.
``(4) If a debtor, in accordance with paragraph (5),
indicates on the petition that there was a judgment for
possession of the residential rental property in which the
debtor resides and does not file a certification under
paragraph (1) or (2)--
``(A) subsection (b)(22) shall apply immediately upon
failure to file such certification, and relief from the stay
provided under subsection (a)(3) shall not be required to
enable the lessor to complete the process to recover full
possession of the property; and
``(B) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the docket
indicating the absence of a filed certification and the
applicability of the exception to the stay under subsection
(b)(22).
``(5)(A) Where a judgment for possession of residential
property in which the debtor resides as a tenant under a
lease or rental agreement has been obtained by the lessor,
the debtor shall so indicate on the bankruptcy petition and
shall provide the name and address of the lessor that
obtained that pre-petition judgment on the petition and on
any certification filed under this subsection.
``(B) The form of certification filed with the petition, as
specified in this subsection, shall provide for the debtor to
certify, and the debtor shall certify--
``(i) whether a judgment for possession of residential
rental housing in which the debtor resides has been obtained
against the debtor before the date of the filing of the
petition; and
``(ii) whether the debtor is claiming under paragraph (1)
that under nonbankruptcy law applicable in the jurisdiction,
there are circumstances under which the debtor would be
permitted to cure the entire monetary default that gave rise
to the judgment for possession, after that judgment of
possession was entered, and has made the appropriate deposit
with the court.
``(C) The standard forms (electronic and otherwise) used in
a bankruptcy proceeding shall be amended to reflect the
requirements of this subsection.
``(D) The clerk of the court shall arrange for the prompt
transmittal of the rent deposited in accordance with
paragraph (1)(B) to the lessor.
``(m)(1) Except as otherwise provided in this subsection,
subsection (b)(23) shall apply on the date that is 15 days
after the date on which the lessor files and serves a
certification described in subsection (b)(23).
``(2)(A) If the debtor files with the court an objection to
the truth or legal sufficiency of the certification described
in subsection (b)(23) and serves such objection upon the
lessor, subsection (b)(23) shall not apply, unless ordered to
apply by the court under this subsection.
``(B) If the debtor files and serves the objection under
subparagraph (A), the court shall hold a hearing within 10
days after the filing and service of such objection to
determine if the situation giving rise to the lessor's
certification under paragraph (1) existed or has been
remedied.
``(C) If the debtor can demonstrate to the satisfaction of
the court that the situation giving rise to the lessor's
certification under paragraph (1) did not exist or has been
remedied, the stay provided under subsection (a)(3) shall
remain in effect until the termination of the stay under this
section.
``(D) If the debtor cannot demonstrate to the satisfaction
of the court that the situation giving rise to the lessor's
certification under paragraph (1) did not exist or has been
remedied--
``(i) relief from the stay provided under subsection (a)(3)
shall not be required to enable the lessor to proceed with
the eviction; and
``(ii) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the court's
order upholding the lessor's certification.
``(3) If the debtor fails to file, within 15 days, an
objection under paragraph (2)(A)--
``(A) subsection (b)(23) shall apply immediately upon such
failure and relief from the stay provided under subsection
(a)(3) shall not be required to enable the lessor to complete
the process to recover full possession of the property; and
``(B) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the docket
indicating such failure.''.
SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.
Title 11, United States Code, is amended--
(1) in section 727(a)(8), by striking ``six'' and inserting
``8''; and
(2) in section 1328, by inserting after subsection (e) the
following:
[[Page S787]]
``(f) Notwithstanding subsections (a) and (b), the court
shall not grant a discharge of all debts provided for in the
plan or disallowed under section 502, if the debtor has
received a discharge--
``(1) in a case filed under chapter 7, 11, or 12 of this
title during the 4-year period preceding the date of the
order for relief under this chapter, or
``(2) in a case filed under chapter 13 of this title during
the 2-year period preceding the date of such order.''.
SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
(a) Definition.--Section 522(f) of title 11, United States
Code, is amended by adding at the end the following:
``(4)(A) Subject to subparagraph (B), for purposes of
paragraph (1)(B), the term `household goods' means--
``(i) clothing;
``(ii) furniture;
``(iii) appliances;
``(iv) 1 radio;
``(v) 1 television;
``(vi) 1 VCR;
``(vii) linens;
``(viii) china;
``(ix) crockery;
``(x) kitchenware;
``(xi) educational materials and educational equipment
primarily for the use of minor dependent children of the
debtor;
(xii) medical equipment and supplies;
``(xiii) furniture exclusively for the use of minor
children, or elderly or disabled dependents of the debtor;
``(xiv) personal effects (including the toys and hobby
equipment of minor dependent children and wedding rings) of
the debtor and the dependents of the debtor; and
``(xv) 1 personal computer and related equipment.
``(B) The term `household goods' does not include--
``(i) works of art (unless by or of the debtor, or any
relative of the debtor);
``(ii) electronic entertainment equipment with a fair
market value of more than $500 in the aggregate (except 1
television, 1 radio, and 1 VCR);
``(iii) items acquired as antiques with a fair market value
of more than $500 in the aggregate;
``(iv) jewelry with a fair market value of more than $500
in the aggregate (except wedding rings); and
``(v) a computer (except as otherwise provided for in this
section), motor vehicle (including a tractor or lawn
tractor), boat, or a motorized recreational device,
conveyance, vehicle, watercraft, or aircraft.''.
(b) Study.--Not later than 2 years after the date of
enactment of this Act, the Director of the Executive Office
for United States Trustees shall submit a report to the
Committee on the Judiciary of the Senate and the Committee on
the Judiciary of the House of Representatives containing its
findings regarding utilization of the definition of household
goods, as defined in section 522(f)(4) of title 11, United
States Code, as added by subsection (a), with respect to the
avoidance of nonpossessory, nonpurchase money security
interests in household goods under section 522(f)(1)(B) of
title 11, United States Code, and the impact such section
522(f)(4) has had on debtors and on the bankruptcy courts.
Such report may include recommendations for amendments to
such section 522(f)(4) consistent with the Director's
findings.
SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.
(a) In General.--Section 523(a) of title 11, United States
Code, is amended by inserting after paragraph (14) the
following:
``(14A) incurred to pay a tax to a governmental unit, other
than the United States, that would be nondischargeable under
paragraph (1);''.
(b) Discharge Under Chapter 13.--Section 1328(a) of title
11, United States Code, is amended by striking paragraphs (1)
through (3) and inserting the following:
``(1) provided for under section 1322(b)(5);
``(2) of the kind specified in paragraph (2), (3), (4),
(5), (8), or (9) of section 523(a);
``(3) for restitution, or a criminal fine, included in a
sentence on the debtor's conviction of a crime; or
``(4) for restitution, or damages, awarded in a civil
action against the debtor as a result of willful or malicious
injury by the debtor that caused personal injury to an
individual or the death of an individual.''.
SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13
CASES.
(a) Notice.--Section 342 of title 11, United States Code,
as amended by section 102, is amended--
(1) in subsection (c)--
(A) by inserting ``(1)'' after ``(c)'';
(B) by striking ``, but the failure of such notice to
contain such information shall not invalidate the legal
effect of such notice''; and
(C) by adding at the end the following:
``(2)(A) If, within the 90 days before the commencement of
a voluntary case, a creditor supplies the debtor in at least
2 communications sent to the debtor with the current account
number of the debtor and the address at which such creditor
requests to receive correspondence, then any notice required
by this title to be sent by the debtor to such creditor shall
be sent to such address and shall include such account
number.
``(B) If a creditor would be in violation of applicable
nonbankruptcy law by sending any such communication within
such 90-day period and if such creditor supplies the debtor
in the last 2 communications with the current account number
of the debtor and the address at which such creditor requests
to receive correspondence, then any notice required by this
title to be sent by the debtor to such creditor shall be sent
to such address and shall include such account number.''; and
(2) by adding at the end the following:
``(e)(1) In a case under chapter 7 or 13 of this title of a
debtor who is an individual, a creditor at any time may both
file with the court and serve on the debtor a notice of
address to be used to provide notice in such case to such
creditor.
``(2) Any notice in such case required to be provided to
such creditor by the debtor or the court later than 5 days
after the court and the debtor receive such creditor's notice
of address, shall be provided to such address.
``(f)(1) An entity may file with any bankruptcy court a
notice of address to be used by all the bankruptcy courts or
by particular bankruptcy courts, as so specified by such
entity at the time such notice is filed, to provide notice to
such entity in all cases under chapters 7 and 13 pending in
the courts with respect to which such notice is filed, in
which such entity is a creditor.
``(2) In any case filed under chapter 7 or 13, any notice
required to be provided by a court with respect to which a
notice is filed under paragraph (1), to such entity later
than 30 days after the filing of such notice under paragraph
(1) shall be provided to such address unless with respect to
a particular case a different address is specified in a
notice filed and served in accordance with subsection (e).
``(3) A notice filed under paragraph (1) may be withdrawn
by such entity.
``(g)(1) Notice provided to a creditor by the debtor or the
court other than in accordance with this section (excluding
this subsection) shall not be effective notice until such
notice is brought to the attention of such creditor. If such
creditor designates a person or an organizational subdivision
of such creditor to be responsible for receiving notices
under this title and establishes reasonable procedures so
that such notices receivable by such creditor are to be
delivered to such person or such subdivision, then a notice
provided to such creditor other than in accordance with this
section (excluding this subsection) shall not be considered
to have been brought to the attention of such creditor until
such notice is received by such person or such subdivision.
``(2) A monetary penalty may not be imposed on a creditor
for a violation of a stay in effect under section 362(a)
(including a monetary penalty imposed under section 362(k))
or for failure to comply with section 542 or 543 unless the
conduct that is the basis of such violation or of such
failure occurs after such creditor receives notice effective
under this section of the order for relief.''.
(b) Debtor's Duties.--Section 521 of title 11, United
States Code, as amended by sections 106, 225, and 305, is
amended--
(1) in subsection (a), as so designated by section 106, by
amending paragraph (1) to read as follows:
``(1) file--
``(A) a list of creditors; and
``(B) unless the court orders otherwise--
``(i) a schedule of assets and liabilities;
``(ii) a schedule of current income and current
expenditures;
``(iii) a statement of the debtor's financial affairs and,
if section 342(b) applies, a certificate--
``(I) of an attorney whose name is indicated on the
petition as the attorney for the debtor, or a bankruptcy
petition preparer signing the petition under section
110(b)(1), indicating that such attorney or the bankruptcy
petition preparer delivered to the debtor the notice required
by section 342(b); or
``(II) if no attorney is so indicated, and no bankruptcy
petition preparer signed the petition, of the debtor that
such notice was received and read by the debtor;
``(iv) copies of all payment advices or other evidence of
payment received within 60 days before the date of the filing
of the petition, by the debtor from any employer of the
debtor;
``(v) a statement of the amount of monthly net income,
itemized to show how the amount is calculated; and
``(vi) a statement disclosing any reasonably anticipated
increase in income or expenditures over the 12-month period
following the date of the filing of the petition;''; and
(2) by adding at the end the following:
``(e)(1) If the debtor in a case under chapter 7 or 13 is
an individual and if a creditor files with the court at any
time a request to receive a copy of the petition, schedules,
and statement of financial affairs filed by the debtor, then
the court shall make such petition, such schedules, and such
statement available to such creditor.
``(2)(A) The debtor shall provide--
``(i) not later than 7 days before the date first set for
the first meeting of creditors, to the trustee a copy of the
Federal income tax return required under applicable law (or
at the election of the debtor, a transcript of such return)
for the most recent tax year ending immediately before the
commencement of the case and for which a Federal income tax
return was filed; and
``(ii) at the same time the debtor complies with clause
(i), a copy of such return (or if elected under clause (i),
such transcript) to any creditor that timely requests such
copy.
``(B) If the debtor fails to comply with clause (i) or (ii)
of subparagraph (A), the
[[Page S788]]
court shall dismiss the case unless the debtor demonstrates
that the failure to so comply is due to circumstances beyond
the control of the debtor.
``(C) If a creditor requests a copy of such tax return or
such transcript and if the debtor fails to provide a copy of
such tax return or such transcript to such creditor at the
time the debtor provides such tax return or such transcript
to the trustee, then the court shall dismiss the case unless
the debtor demonstrates that the failure to provide a copy of
such tax return or such transcript is due to circumstances
beyond the control of the debtor.
``(3) If a creditor in a case under chapter 13 files with
the court at any time a request to receive a copy of the plan
filed by the debtor, then the court shall make available to
such creditor a copy of the plan--
``(A) at a reasonable cost; and
``(B) not later than 5 days after such request is filed.
``(f) At the request of the court, the United States
trustee, or any party in interest in a case under chapter 7,
11, or 13, a debtor who is an individual shall file with the
court--
``(1) at the same time filed with the taxing authority, a
copy of each Federal income tax return required under
applicable law (or at the election of the debtor, a
transcript of such tax return) with respect to each tax year
of the debtor ending while the case is pending under such
chapter;
``(2) at the same time filed with the taxing authority,
each Federal income tax return required under applicable law
(or at the election of the debtor, a transcript of such tax
return) that had not been filed with such authority as of the
date of the commencement of the case and that was
subsequently filed for any tax year of the debtor ending in
the 3-year period ending on the date of the commencement of
the case;
``(3) a copy of each amendment to any Federal income tax
return or transcript filed with the court under paragraph (1)
or (2); and
``(4) in a case under chapter 13--
``(A) on the date that is either 90 days after the end of
such tax year or 1 year after the date of the commencement of
the case, whichever is later, if a plan is not confirmed
before such later date; and
``(B) annually after the plan is confirmed and until the
case is closed, not later than the date that is 45 days
before the anniversary of the confirmation of the plan;
a statement, under penalty of perjury, of the income and
expenditures of the debtor during the tax year of the debtor
most recently concluded before such statement is filed under
this paragraph, and of the monthly income of the debtor, that
shows how income, expenditures, and monthly income are
calculated.
``(g)(1) A statement referred to in subsection (f)(4) shall
disclose--
``(A) the amount and sources of the income of the debtor;
``(B) the identity of any person responsible with the
debtor for the support of any dependent of the debtor; and
``(C) the identity of any person who contributed, and the
amount contributed, to the household in which the debtor
resides.
``(2) The tax returns, amendments, and statement of income
and expenditures described in subsections (e)(2)(A) and (f)
shall be available to the United States trustee (or the
bankruptcy administrator, if any), the trustee, and any party
in interest for inspection and copying, subject to the
requirements of section 315(c) of the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005.
``(h) If requested by the United States trustee or by the
trustee, the debtor shall provide--
``(1) a document that establishes the identity of the
debtor, including a driver's license, passport, or other
document that contains a photograph of the debtor; or
``(2) such other personal identifying information relating
to the debtor that establishes the identity of the debtor.''.
(c)(1) Not later than 180 days after the date of the
enactment of this Act, the Director of the Administrative
Office of the United States Courts shall establish procedures
for safeguarding the confidentiality of any tax information
required to be provided under this section.
(2) The procedures under paragraph (1) shall include
restrictions on creditor access to tax information that is
required to be provided under this section.
(3) Not later than 540 days after the date of enactment of
this Act, the Director of the Administrative Office of the
United States Courts shall prepare and submit to the
President pro tempore of the Senate and the Speaker of the
House of Representatives a report that--
(A) assesses the effectiveness of the procedures
established under paragraph (1); and
(B) if appropriate, includes proposed legislation to--
(i) further protect the confidentiality of tax information;
and
(ii) provide penalties for the improper use by any person
of the tax information required to be provided under this
section.
SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR
PROVIDE REQUIRED INFORMATION.
Section 521 of title 11, United States Code, as amended by
sections 106, 225, 305, and 315, is amended by adding at the
end the following:
``(i)(1) Subject to paragraphs (2) and (4) and
notwithstanding section 707(a), 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 date of the filing of the petition, the case shall
be automatically dismissed effective on the 46th day after
the date of the filing of the petition.
``(2) Subject to paragraph (4) and with respect to a case
described in paragraph (1), any party in interest may request
the court to enter an order dismissing the case. If
requested, the court shall enter an order of dismissal not
later than 5 days after such request.
``(3) Subject to paragraph (4) and upon request of the
debtor made within 45 days after the date of the filing of
the petition described in paragraph (1), the court may allow
the debtor an additional period of not to exceed 45 days to
file the information required under subsection (a)(1) if the
court finds justification for extending the period for the
filing.
``(4) Notwithstanding any other provision of this
subsection, on the motion of the trustee filed before the
expiration of the applicable period of time specified in
paragraph (1), (2), or (3), and after notice and a hearing,
the court may decline to dismiss the case if the court finds
that the debtor attempted in good faith to file all the
information required by subsection (a)(1)(B)(iv) and that the
best interests of creditors would be served by administration
of the case.''.
SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON
CONFIRMATION OF THE PLAN.
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
date of the meeting of creditors under section 341(a), unless
the court determines that it would be in the best interests
of the creditors and the estate to hold such hearing at an
earlier date and there is no objection to such earlier
date.''.
SEC. 318. 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)(1) If the current monthly income of the debtor and
the debtor's spouse combined, when multiplied by 12, is not
less than--
``(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1
earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the
applicable State for a family of the same number or fewer
individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus
$525 per month for each individual in excess of 4,
the plan may not provide for payments over a period that is
longer than 5 years.
``(2) If the current monthly income of the debtor and the
debtor's spouse combined, when multiplied by 12, is less
than--
``(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1
earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the
applicable State for a family of the same number or fewer
individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus
$525 per month for each individual in excess of 4,
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.'';
(2) in section 1325(b)(1)(B), by striking ``three-year
period'' and inserting ``applicable commitment period''; and
(3) in section 1325(b), as amended by section 102, by
adding at the end the following:
``(4) For purposes of this subsection, the `applicable
commitment period'--
``(A) subject to subparagraph (B), shall be--
``(i) 3 years; or
``(ii) 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--
``(I) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1
earner;
``(II) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the
applicable State for a family of the same number or fewer
individuals; or
``(III) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus
$525 per month for each individual in excess of 4; and
``(B) may be less than 3 or 5 years, whichever is
applicable under subparagraph (A), but only if the plan
provides for payment in full of all allowed unsecured claims
over a shorter period.''; and
(4) in section 1329(c), by striking ``three years'' and
inserting ``the applicable commitment period under section
1325(b)(1)(B)''.
[[Page S789]]
SEC. 319. SENSE OF CONGRESS REGARDING EXPANSION OF RULE 9011
OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE.
It is the sense of Congress that rule 9011 of the Federal
Rules of Bankruptcy Procedure (11 U.S.C. App.) should be
modified to include a requirement that all documents
(including schedules), signed and unsigned, submitted to the
court or to a trustee by debtors who represent themselves and
debtors who are represented by attorneys be submitted only
after the debtors or the debtors' attorneys have made
reasonable inquiry to verify that the information contained
in such documents is--
(1) well grounded in fact; and
(2) warranted by existing law or a good faith argument for
the extension, modification, or reversal of existing law.
SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.
Section 362(e) of title 11, United States Code, is
amended--
(1) by inserting ``(1)'' after ``(e)''; and
(2) by adding at the end the following:
``(2) Notwithstanding paragraph (1), in a case under
chapter 7, 11, or 13 in which the debtor is an individual,
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) such 60-day period is extended--
``(i) by agreement of all parties in interest; or
``(ii) by the court for such specific period of time as the
court finds is required for good cause, as described in
findings made by the court.''.
SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.
(a) Property of the Estate.--
(1) In general.--Subchapter I of chapter 11 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 1115. Property of the estate
``(a) In a case in which the debtor is an individual,
property of the estate includes, in addition to the property
specified in section 541--
``(1) all property of the kind specified in section 541
that the debtor acquires after the commencement of the case
but before the case is closed, dismissed, or converted to a
case under chapter 7, 12, or 13, whichever occurs first; and
``(2) earnings from services performed by the debtor after
the commencement of the case but before the case is closed,
dismissed, or converted to a case under chapter 7, 12, or 13,
whichever occurs first.
``(b) Except as provided in section 1104 or a confirmed
plan or order confirming a plan, the debtor shall remain in
possession of all property of the estate.''.
(2) Clerical amendment.--The table of sections for
subchapter I of chapter 11 of title 11, United States Code,
is amended by adding at the end the following:
``1115. Property of the estate.''.
(b) Contents of Plan.--Section 1123(a) of title 11, United
States Code, is amended--
(1) in paragraph (6), by striking ``and'' at the end;
(2) in paragraph (7), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(8) in a case in which the debtor is an individual,
provide for the payment to creditors under the plan of all or
such portion of earnings from personal services performed by
the debtor after the commencement of the case or other future
income of the debtor as is necessary for the execution of the
plan.''.
(c) Confirmation of Plan.--
(1) Requirements relating to value of property.--Section
1129(a) of title 11, United States Code, as amended by
section 213, is amended by adding at the end the following:
``(15) In a case in which the debtor is an individual and
in which the holder of an allowed unsecured claim objects to
the confirmation of the plan--
``(A) the value, as of the effective date of the plan, of
the property to be distributed under the plan on account of
such claim is not less than the amount of such claim; or
``(B) the value of the property to be distributed under the
plan is not less than the projected disposable income of the
debtor (as defined in section 1325(b)(2)) to be received
during the 5-year period beginning on the date that the first
payment is due under the plan, or during the period for which
the plan provides payments, whichever is longer.''.
(2) Requirement relating to interests in property.--Section
1129(b)(2)(B)(ii) of title 11, United States Code, is amended
by inserting before the period at the end the following: ``,
except that in a case in which the debtor is an individual,
the debtor may retain property included in the estate under
section 1115, subject to the requirements of subsection
(a)(14) of this section''.
(d) Effect of Confirmation.--Section 1141(d) of title 11,
United States Code, is amended--
(1) in paragraph (2), by striking ``The confirmation of a
plan does not discharge an individual debtor'' and inserting
``A discharge under this chapter does not discharge a debtor
who is an individual''; and
(2) by adding at the end the following:
``(5) In a case in which the debtor is an individual--
``(A) unless after notice and a hearing the court orders
otherwise for cause, confirmation of the plan does not
discharge any debt provided for in the plan until the court
grants a discharge on completion of all payments under the
plan;
``(B) at any time after the confirmation of the plan, and
after notice and a hearing, the court may grant a discharge
to the debtor who has not completed payments under the plan
if--
``(i) the value, as of the effective date of the plan, of
property actually distributed under the plan on account of
each allowed unsecured claim is not less than the amount that
would have been paid on such claim if the estate of the
debtor had been liquidated under chapter 7 on such date; and
``(ii) modification of the plan under section 1127 is not
practicable; and''.
(e) Modification of Plan.--Section 1127 of title 11, United
States Code, is amended by adding at the end the following:
``(e) If the debtor is an individual, the plan may be
modified at any time after confirmation of the plan but
before the completion of payments under the plan, whether or
not the plan has been substantially consummated, upon request
of the debtor, the trustee, the United States trustee, or the
holder of an allowed unsecured claim, to--
``(1) increase or reduce the amount of payments on claims
of a particular class provided for by the plan;
``(2) extend or reduce the time period for such payments;
or
``(3) alter the amount of the distribution to a creditor
whose claim is provided for by the plan to the extent
necessary to take account of any payment of such claim made
other than under the plan.
``(f)(1) Sections 1121 through 1128 and the requirements of
section 1129 apply to any modification under subsection (a).
``(2) The plan, as modified, shall become the plan only
after there has been disclosure under section 1125 as the
court may direct, notice and a hearing, and such modification
is approved.''.
SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION.
(a) Exemptions.--Section 522 of title 11, United States
Code, as amended by sections 224 and 308, is amended by
adding at the end the following:
``(p)(1) Except as provided in paragraph (2) of this
subsection and sections 544 and 548, as a result of electing
under subsection (b)(3)(A) to exempt property under State or
local law, a debtor may not exempt any amount of interest
that was acquired by the debtor during the 1215-day period
preceding the date of the filing of the petition that exceeds
in the aggregate $125,000 in value 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;
``(C) a burial plot for the debtor or a dependent of the
debtor; or
``(D) real or personal property that the debtor or
dependent of the debtor claims as a homestead.
``(2)(A) 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 such farmer.
``(B) For purposes of paragraph (1), any amount of such
interest does not include any interest transferred from a
debtor's previous principal residence (which was acquired
prior to the beginning of such 1215-day period) into the
debtor's current principal residence, if the debtor's
previous and current residences are located in the same
State.
``(q)(1) As a result of electing under subsection (b)(3)(A)
to exempt property under State or local law, a debtor may not
exempt any amount of an interest in property described in
subparagraphs (A), (B), (C), and (D) of subsection (p)(1)
which exceeds in the aggregate $125,000 if--
``(A) the court determines, after notice and a hearing,
that the debtor has been convicted of a felony (as defined in
section 3156 of title 18), which under the circumstances,
demonstrates that the filing of the case was an abuse of the
provisions of this title; or
``(B) the debtor owes a debt arising from--
``(i) any violation of the Federal securities laws (as
defined in section 3(a)(47) of the Securities Exchange Act of
1934), any State securities laws, or any regulation or order
issued under Federal securities laws or State securities
laws;
``(ii) fraud, deceit, or manipulation in a fiduciary
capacity or in connection with the purchase or sale of any
security registered under section 12 or 15(d) of the
Securities Exchange Act of 1934 or under section 6 of the
Securities Act of 1933;
``(iii) any civil remedy under section 1964 of title 18; or
``(iv) any criminal act, intentional tort, or willful or
reckless misconduct that caused serious physical injury or
death to another individual in the preceding 5 years.
``(2) Paragraph (1) shall not apply to the extent the
amount of an interest in property described in subparagraphs
(A), (B), (C), and (D) of subsection (p)(1) is reasonably
necessary for the support of the debtor and any dependent of
the debtor.''.
(b) Adjustment of Dollar Amounts.--Paragraphs (1) and (2)
of section 104(b) of title 11, United States Code, as amended
by section 224, are amended by inserting ``522(p), 522(q),''
after ``522(n),''.
SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT
CONTRIBUTIONS AND OTHER PROPERTY FROM THE
ESTATE.
Section 541(b) of title 11, United States Code, as amended
by section 225, is amended
[[Page S790]]
by adding after paragraph (6), as added by section
225(a)(1)(C), the following:
``(7) any amount--
``(A) withheld by an employer from the wages of employees
for payment as contributions--
``(i) to--
``(I) an employee benefit plan that is subject to title I
of the Employee Retirement Income Security Act of 1974 or
under an employee benefit plan which is a governmental plan
under section 414(d) of the Internal Revenue Code of 1986;
``(II) a deferred compensation plan under section 457 of
the Internal Revenue Code of 1986; or
``(III) a tax-deferred annuity under section 403(b) of the
Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not
constitute disposable income as defined in section
1325(b)(2); or
``(ii) to a health insurance plan regulated by State law
whether or not subject to such title; or
``(B) received by an employer from employees for payment as
contributions--
``(i) to--
``(I) an employee benefit plan that is subject to title I
of the Employee Retirement Income Security Act of 1974 or
under an employee benefit plan which is a governmental plan
under section 414(d) of the Internal Revenue Code of 1986;
``(II) a deferred compensation plan under section 457 of
the Internal Revenue Code of 1986; or
``(III) a tax-deferred annuity under section 403(b) of the
Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not
constitute disposable income, as defined in section
1325(b)(2); or
``(ii) to a health insurance plan regulated by State law
whether or not subject to such title;''.
SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLVING
BANKRUPTCY PROFESSIONALS.
(a) In General.--Section 1334 of title 28, United States
Code, is amended--
(1) in subsection (b), by striking ``Notwithstanding'' and
inserting ``Except as provided in subsection (e)(2), and
notwithstanding''; and
(2) by striking subsection (e) and inserting the following:
``(e) The district court in which a case under title 11 is
commenced or is pending shall have exclusive jurisdiction--
``(1) of all the property, wherever located, of the debtor
as of the commencement of such case, and of property of the
estate; and
``(2) over all claims or causes of action that involve
construction of section 327 of title 11, United States Code,
or rules relating to disclosure requirements under section
327.''.
(b) Applicability.--This section shall only apply to cases
filed after the date of enactment of this Act.
SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE INCREASE.
(a) Actions Under Chapter 7 or 13 of Title 11, United
States Code.--Section 1930(a) of title 28, United States
Code, is amended by striking paragraph (1) and inserting the
following:
``(1) For a case commenced--
``(A) under chapter 7 of title 11, $160; or
``(B) under chapter 13 of title 11, $150.''.
(b) United States Trustee System Fund.--Section 589a(b) of
title 28, United States Code, is amended--
(1) by striking paragraph (1) and inserting the following:
``(1)(A) 40.63 percent of the fees collected under section
1930(a)(1)(A) of this title in cases commenced under chapter
7 of title 11; and
``(B) 70.00 percent of the fees collected under section
1930(a)(1)(B) of this title in cases commenced under chapter
13 of title 11;'';
(2) in paragraph (2), by striking ``one-half'' and
inserting ``three-fourths''; and
(3) in paragraph (4), by striking ``one-half'' and
inserting ``100 percent''.
(c) Collection and Deposit of Miscellaneous Bankruptcy
Fees.--Section 406(b) of the Judiciary Appropriations Act,
1990 (28 U.S.C. 1931 note) is amended by striking ``pursuant
to 28 U.S.C. section 1930(b)'' and all that follows through
``28 U.S.C. section 1931'' and inserting ``under section
1930(b) of title 28, United States Code, and 31.25 percent of
the fees collected under section 1930(a)(1)(A) of that title,
30.00 percent of the fees collected under section
1930(a)(1)(B) of that title, and 25 percent of the fees
collected under section 1930(a)(3) of that title shall be
deposited as offsetting receipts to the fund established
under section 1931 of that title''.
SEC. 326. 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. 327. FAIR VALUATION OF COLLATERAL.
Section 506(a) of title 11, United States Code, is amended
by--
(1) inserting ``(1)'' after ``(a)''; and
(2) by adding at the end the following:
``(2) If the debtor is an individual in a case under
chapter 7 or 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 the
filing of the petition without deduction for costs of sale or
marketing. With respect to property acquired for personal,
family, or household purposes, 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. 328. 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 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, if it is impossible for the trustee to cure
such default by performing nonmonetary acts at and after the
time of assumption, except that if such default arises from a
failure to operate in accordance with a nonresidential real
property lease, then such default shall be cured by
performance at and after the time of assumption in accordance
with such lease, and pecuniary losses resulting from such
default shall be compensated in accordance with the
provisions of this paragraph;''; and
(B) in paragraph (2)(D), by striking ``penalty rate or
provision'' and inserting ``penalty rate or penalty
provision'';
(2) in subsection (c)--
(A) in paragraph (2), by inserting ``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)(2) 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, other than a
default arising from failure to operate a nonresidential real
property lease subject to section 365(b)(1)(A), 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. 329. 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--
``(i) wages, salaries, and commissions for services
rendered after the commencement of the case; and
``(ii) wages and benefits awarded pursuant to a judicial
proceeding or a proceeding of the National Labor Relations
Board as back pay attributable to any period of time
occurring after commencement of the case under this title, as
a result of a violation of Federal or State law by the
debtor, without regard to the time of the occurrence of
unlawful conduct on which such award is based or to whether
any services were rendered, if the court determines that
payment of wages and benefits by reason of the operation of
this clause will not substantially increase the probability
of layoff or termination of current employees, or of
nonpayment of domestic support obligations, during the case
under this title;''.
SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF CERTAIN
PROCEEDINGS.
(a) Chapter 7.--Section 727(a) of title 11, United States
Code, as amended by section 106, is amended--
(1) in paragraph (10), by striking ``or'' at the end;
(2) in paragraph (11) by striking the period at the end and
inserting ``; or''; and
(3) by inserting after paragraph (11) the following:
``(12) the court after notice and a hearing held not more
than 10 days before the date of the entry of the order
granting the discharge finds that there is reasonable cause
to believe that--
``(A) section 522(q)(1) may be applicable to the debtor;
and
``(B) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind
described in section 522(q)(1)(B).''.
(b) Chapter 11.--Section 1141(d) of title 11, United States
Code, as amended by section 321, is amended by adding at the
end the following:
``(C) unless after notice and a hearing held not more than
10 days before the date of the entry of the order granting
the discharge,
[[Page S791]]
the court finds that there is no reasonable cause to believe
that--
``(i) section 522(q)(1) may be applicable to the debtor;
and
``(ii) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind
described in section 522(q)(1)(B).''.
(c) Chapter 12.--Section 1228 of title 11, United States
Code, is amended--
(1) in subsection (a) by striking ``As'' and inserting
``Subject to subsection (d), as'',
(2) in subsection (b) by striking ``At'' and inserting
``Subject to subsection (d), at'', and
(3) by adding at the end the following:
``(f) The court may not grant a discharge under this
chapter unless the court after notice and a hearing held not
more than 10 days before the date of the entry of the order
granting the discharge finds that there is no reasonable
cause to believe that--
``(1) section 522(q)(1) may be applicable to the debtor;
and
``(2) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind
described in section 522(q)(1)(B).''.
(d) Chapter 13.--Section 1328 of title 11, United States
Code, as amended by section 106, is amended--
(1) in subsection (a) by striking ``As'' and inserting
``Subject to subsection (d), as'',
(2) in subsection (b) by striking ``At'' and inserting
``Subject to subsection (d), at'', and
(3) by adding at the end the following:
``(h) The court may not grant a discharge under this
chapter unless the court after notice and a hearing held not
more than 10 days before the date of the entry of the order
granting the discharge finds that there is no reasonable
cause to believe that--
``(1) section 522(q)(1) may be applicable to the debtor;
and
``(2) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind
described in section 522(q)(1)(B).''.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
SEC. 401. ADEQUATE PROTECTION FOR INVESTORS.
(a) Definition.--Section 101 of title 11, United States
Code, is amended by inserting after paragraph (48) the
following:
``(48A) `securities self regulatory organization' means
either a securities association registered with the
Securities and Exchange Commission under section 15A of the
Securities Exchange Act of 1934 or a national securities
exchange registered with the Securities and Exchange
Commission under section 6 of the Securities Exchange Act of
1934;''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, as amended by sections 224, 303, and 311, is
amended by inserting after paragraph (24) the following:
``(25) under subsection (a), of--
``(A) the commencement or continuation of an investigation
or action by a securities self regulatory organization to
enforce such organization's regulatory power;
``(B) the enforcement of an order or decision, other than
for monetary sanctions, obtained in an action by such
securities self regulatory organization to enforce such
organization's regulatory power; or
``(C) any act taken by such securities self regulatory
organization to delist, delete, or refuse to permit quotation
of any stock that does not meet applicable regulatory
requirements;''.
SEC. 402. 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. 403. PROTECTION OF REFINANCE OF SECURITY INTEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2) of
title 11, United States Code, are each amended by striking
``10'' each place it appears and inserting ``30''.
SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
(a) In General.--Section 365(d)(4) of title 11, United
States Code, is amended to read as follows:
``(4)(A) Subject to subparagraph (B), an unexpired lease of
nonresidential real property under which the debtor is the
lessee shall be deemed rejected, and the trustee shall
immediately surrender that nonresidential real property to
the lessor, if the trustee does not assume or reject the
unexpired lease by the earlier of--
``(i) the date that is 120 days after the date of the order
for relief; or
``(ii) the date of the entry of an order confirming a plan.
``(B)(i) The court may extend the period determined under
subparagraph (A), prior to the expiration of the 120-day
period, for 90 days on the motion of the trustee or 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 in each instance.''.
(b) Exception.--Section 365(f)(1) of title 11, United
States Code, is amended by striking ``subsection'' the first
place it appears and inserting ``subsections (b) and''.
SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.
(a) Appointment.--Section 1102(a) of title 11, United
States Code, is amended by adding at the end the following:
``(4) On request of a party in interest and after notice
and a hearing, the court may order the United States trustee
to change 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. The court may order the United
States trustee to increase the number of members of a
committee to include a creditor that is a small business
concern (as described in section 3(a)(1) of the Small
Business Act), if the court determines that the creditor
holds claims (of the kind represented by the committee) the
aggregate amount of which, in comparison to the annual gross
revenue of that creditor, is disproportionately large.''.
(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--
``(A) provide access to information for creditors who--
``(i) hold claims of the kind represented by that
committee; and
``(ii) are not appointed to the committee;
``(B) solicit and receive comments from the creditors
described in subparagraph (A); and
``(C) be subject to a court order that compels any
additional report or disclosure to be made to the creditors
described in subparagraph (A).''.
SEC. 406. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES
CODE.
Section 546 of title 11, United States Code, is amended--
(1) by redesignating the second subsection (g) (as added by
section 222(a) of Public Law 103-394) as subsection (h);
(2) in subsection (h), as so redesignated, by inserting
``and subject to the prior rights of holders of security
interests in such goods or the proceeds of such goods'' after
``consent of a creditor''; and
(3) by adding at the end the following:
``(i)(1) Notwithstanding paragraphs (2) and (3) of section
545, the trustee may not avoid a warehouseman's lien for
storage, transportation, or other costs incidental to the
storage and handling of goods.
``(2) The prohibition under paragraph (1) shall be applied
in a manner consistent with any State statute applicable to
such lien that is similar to section 7-209 of the Uniform
Commercial Code, as in effect on the date of enactment of the
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005, or any successor to such section 7-209.''.
SEC. 407. AMENDMENTS 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) by striking ``(A) In'' and inserting ``In''; and
(B) by inserting ``to an examiner, trustee under chapter
11, or professional person'' after ``awarded''; and
(2) by adding at the end the following:
``(7) In determining the amount of reasonable compensation
to be awarded to a trustee, the court shall treat such
compensation as a commission, based on section 326.''.
SEC. 408. 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. 409. PREFERENCES.
Section 547(c) of title 11, United States Code, is
amended--
(1) by striking paragraph (2) and inserting the following:
``(2) to the extent that such transfer was in payment of a
debt incurred by the debtor in the ordinary course of
business or financial affairs of the debtor and the
transferee, and such transfer was--
``(A) made in the ordinary course of business or financial
affairs of the debtor and the transferee; or
``(B) made according to ordinary business terms;'';
(2) in paragraph (8), by striking the period at the end and
inserting ``; or''; and
(3) 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. 410. VENUE OF CERTAIN PROCEEDINGS.
Section 1409(b) of title 28, United States Code, is amended
by inserting ``, or a debt (excluding a consumer debt)
against a noninsider of less than $10,000,'' after
``$5,000''.
SEC. 411. PERIOD FOR FILING PLAN UNDER CHAPTER 11.
Section 1121(d) of title 11, United States Code, is
amended--
[[Page S792]]
(1) by striking ``On'' and inserting ``(1) Subject to
paragraph (2), on''; and
(2) by adding at the end the following:
``(2)(A) The 120-day period specified in paragraph (1) may
not be extended beyond a date that is 18 months after the
date of the order for relief under this chapter.
``(B) The 180-day period specified in paragraph (1) may not
be extended beyond a date that is 20 months after the date of
the order for relief under this chapter.''.
SEC. 412. 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. 413. CREDITOR REPRESENTATION AT FIRST MEETING OF
CREDITORS.
Section 341(c) of title 11, United States Code, is amended
by inserting at the end the following: ``Notwithstanding any
local court rule, provision of a State constitution, any
otherwise applicable nonbankruptcy law, or any other
requirement that representation at the meeting of creditors
under subsection (a) be by an attorney, a creditor holding a
consumer debt or any representative of the creditor (which
may include an entity or an employee of an entity and may be
a representative for more than 1 creditor) shall be permitted
to appear at and participate in the meeting of creditors in a
case under chapter 7 or 13, either alone or in conjunction
with an attorney for the creditor. Nothing in this subsection
shall be construed to require any creditor to be represented
by an attorney at any meeting of creditors.''.
SEC. 414. 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. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.
Section 330(a)(3) of title 11, United States Code, is
amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) by redesignating subparagraph (E) as subparagraph (F);
and
(3) by inserting after subparagraph (D) the following:
``(E) with respect to a professional person, whether the
person is board certified or otherwise has demonstrated skill
and experience in the bankruptcy field; and''.
SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.
Section 1104(b) of title 11, United States Code, is
amended--
(1) by inserting ``(1)'' after ``(b)''; and
(2) by adding at the end the following:
``(2)(A) If an eligible, disinterested trustee is elected
at a meeting of creditors under paragraph (1), the United
States trustee shall file a report certifying that election.
``(B) Upon the filing of a report under subparagraph (A)--
``(i) the trustee elected under paragraph (1) shall be
considered to have been selected and appointed for purposes
of this section; and
``(ii) the service of any trustee appointed under
subsection (d) shall terminate.
``(C) The court shall resolve any dispute arising out of an
election described in subparagraph (A).''.
SEC. 417. UTILITY SERVICE.
Section 366 of title 11, United States Code, is amended--
(1) in subsection (a), by striking ``subsection (b)'' and
inserting ``subsections (b) and (c)''; and
(2) by adding at the end the following:
``(c)(1)(A) For purposes of this subsection, the term
`assurance of payment' means--
``(i) a cash deposit;
``(ii) a letter of credit;
``(iii) a certificate of deposit;
``(iv) a surety bond;
``(v) a prepayment of utility consumption; or
``(vi) another form of security that is mutually agreed on
between the utility and the debtor or the trustee.
``(B) For purposes of this subsection an administrative
expense priority shall not constitute an assurance of
payment.
``(2) Subject to paragraphs (3) and (4), with respect to a
case filed under chapter 11, a utility referred to in
subsection (a) may alter, refuse, or discontinue utility
service, if during the 30-day period beginning on the date of
the filing of the petition, the utility does not receive from
the debtor or the trustee adequate assurance of payment for
utility service that is satisfactory to the utility.
``(3)(A) On request of a party in interest and after notice
and a hearing, the court may order modification of the amount
of an assurance of payment under paragraph (2).
``(B) In making a determination under this paragraph
whether an assurance of payment is adequate, the court may
not consider--
``(i) the absence of security before the date of the filing
of the petition;
``(ii) the payment by the debtor of charges for utility
service in a timely manner before the date of the filing of
the petition; or
``(iii) the availability of an administrative expense
priority.
``(4) Notwithstanding any other provision of law, with
respect to a case subject to this subsection, a utility may
recover or set off against a security deposit provided to the
utility by the debtor before the date of the filing of the
petition without notice or order of the court.''.
SEC. 418. 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) Under the 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 if the court
determines that such individual has income less than 150
percent of the income official poverty line (as defined by
the Office of Management and Budget, and revised annually in
accordance with section 673(2) of the Omnibus Budget
Reconciliation Act of 1981) applicable to a family of the
size involved and is unable to pay that 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.
``(2) The district court or the bankruptcy court may waive
for such debtors other fees prescribed under 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 under this
section for other debtors and creditors.''.
SEC. 419. MORE COMPLETE INFORMATION REGARDING ASSETS OF THE
ESTATE.
(a) In General.--
(1) Disclosure.--The Judicial Conference of the United
States, in accordance with section 2075 of title 28 of the
United States Code and after consideration of the views of
the Director of the Executive Office for United States
Trustees, shall propose amended Federal Rules of Bankruptcy
Procedure and in accordance with rule 9009 of the Federal
Rules of Bankruptcy Procedure shall prescribe official
bankruptcy forms directing debtors under chapter 11 of title
11 of United States Code, to disclose the information
described in paragraph (2) by filing and serving periodic
financial and other reports designed to provide such
information.
(2) Information.--The information referred to in paragraph
(1) is the value, operations, and profitability of any
closely held corporation, partnership, or of any other entity
in which the debtor holds a substantial or controlling
interest.
(b) Purpose.--The purpose of the rules and reports under
subsection (a) shall be to assist parties in interest taking
steps to ensure that the debtor's interest in any entity
referred to in subsection (a)(2) is used for the payment of
allowed claims against debtor.
Subtitle B--Small Business Bankruptcy Provisions
SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.
Section 1125 of title 11, United States Code, is amended--
(1) in subsection (a)(1), by inserting before the semicolon
``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''; and
(2) by striking subsection (f), and inserting the
following:
``(f) Notwithstanding subsection (b), in a small business
case--
``(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
under 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 later than
25 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. 432. DEFINITIONS.
(a) Definitions.--Section 101 of title 11, United States
Code, is amended by striking paragraph (51C) and inserting
the following:
[[Page S793]]
``(51C) `small business case' means a case filed under
chapter 11 of this title in which the debtor is a small
business debtor;
``(51D) `small business debtor'--
``(A) subject to subparagraph (B), means a person engaged
in commercial or business activities (including any affiliate
of such person that is also a debtor under this title and
excluding a person whose primary activity is the business of
owning or operating real property or activities incidental
thereto) that has aggregate noncontingent liquidated secured
and unsecured debts as of the date of the petition or the
date of the order for relief in an amount not more than
$2,000,000 (excluding debts owed to 1 or more affiliates or
insiders) for a case in which the United States trustee has
not appointed under section 1102(a)(1) a committee of
unsecured creditors or where the court has determined that
the committee of unsecured creditors is not sufficiently
active and representative to provide effective oversight of
the debtor; and
``(B) does not include any member of a group of affiliated
debtors that has aggregate noncontingent liquidated secured
and unsecured debts in an amount greater than $2,000,000
(excluding debt owed to 1 or more affiliates or insiders);''.
(b) Conforming Amendment.--Section 1102(a)(3) of title 11,
United States Code, is amended by inserting ``debtor'' after
``small business''.
(c) Adjustment of Dollar Amounts.--Section 104(b) of title
11, United States Code, as amended by section 226, is amended
by inserting ``101(51D),'' after ``101(3),'' each place it
appears.
SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
Within a reasonable period of time after the date of
enactment of this Act, the Judicial Conference of the United
States shall prescribe in accordance with rule 9009 of the
Federal Rules of Bankruptcy Procedure official 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. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.
(a) Reporting Required.--
(1) In general.--Chapter 3 of title 11, United States Code,
is amended by inserting after section 307 the following:
``Sec. 308. Debtor reporting requirements
``(a) For purposes of this section, the term
`profitability' means, with respect to a debtor, the amount
of money that the debtor has earned or lost during current
and recent fiscal periods.
``(b) A small business debtor shall file periodic financial
and other reports containing information including--
``(1) the debtor's profitability;
``(2) reasonable approximations of the debtor's projected
cash receipts and cash disbursements over a reasonable
period;
``(3) comparisons of actual cash receipts and disbursements
with projections in prior reports;
``(4)(A) whether the debtor is--
``(i) in compliance in all material respects with
postpetition requirements imposed by this title and the
Federal Rules of Bankruptcy Procedure; and
``(ii) timely filing tax returns and other required
government filings and paying taxes and other administrative
expenses when due;
``(B) if the debtor is not in compliance with the
requirements referred to in subparagraph (A)(i) or filing tax
returns and other required government filings and making the
payments referred to in subparagraph (A)(ii), what the
failures are and how, at what cost, and when the debtor
intends to remedy such failures; and
``(C) such other matters as are in the best interests of
the debtor and creditors, and in the public interest in fair
and efficient procedures under chapter 11 of this title.''.
(2) Clerical amendment.--The table of sections for chapter
3 of title 11, United States Code, is amended by inserting
after the item relating to section 307 the following:
``308. Debtor reporting requirements.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect 60 days after the date on which rules are
prescribed under section 2075 of title 28, United States
Code, to establish forms to be used to comply with section
308 of title 11, United States Code, as added by subsection
(a).
SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR SMALL
BUSINESS CASES.
(a) Proposal of Rules and Forms.--The Judicial Conference
of the United States shall propose in accordance with section
2073 of title 28 of the United States Code amended Federal
Rules of Bankruptcy Procedure, and shall prescribe in
accordance with rule 9009 of the Federal Rules of Bankruptcy
Procedure official bankruptcy forms, directing 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 expenses when due.
(b) Purpose.--The rules and forms proposed under subsection
(a) shall be designed to achieve a practical balance among--
(1) the reasonable needs of the bankruptcy court, the
United States trustee, creditors, and other parties in
interest for reasonably complete information;
(2) a 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 such debtor to understand such debtor's financial
condition and plan the such debtor's future.
SEC. 436. DUTIES IN SMALL BUSINESS CASES.
(a) Duties in Chapter 11 Cases.--Subchapter I of chapter 11
of title 11, United States Code, as amended by section 321,
is amended by adding at the end the following:
``Sec. 1116. Duties of trustee or debtor in possession in
small business cases
``In a small business case, a trustee or the debtor in
possession, in addition to the duties provided in this title
and as otherwise required by law, shall--
``(1) append to the voluntary petition or, in an
involuntary case, file not later than 7 days after the date
of the order for relief--
``(A) its most recent balance sheet, statement of
operations, cash-flow statement, and Federal income tax
return; or
``(B) a statement made under penalty of perjury that no
balance sheet, statement of operations, or cash-flow
statement has been prepared and no Federal tax return has
been filed;
``(2) attend, through its senior management personnel and
counsel, meetings scheduled by the court or the United States
trustee, including initial debtor interviews, scheduling
conferences, and meetings of creditors convened under section
341 unless the court, after notice and a hearing, waives that
requirement upon a finding of extraordinary and compelling
circumstances;
``(3) timely file all schedules and statements of financial
affairs, unless the court, after notice and a hearing, grants
an extension, which shall not extend such time period to a
date later than 30 days after the date of the order for
relief, absent extraordinary and compelling circumstances;
``(4) file all postpetition financial and other reports
required by the Federal Rules of Bankruptcy Procedure or by
local rule of the district court;
``(5) subject to section 363(c)(2), maintain insurance
customary and appropriate to the industry;
``(6)(A) timely file tax returns and other required
government filings; and
``(B) subject to section 363(c)(2), timely pay all taxes
entitled to administrative expense priority except those
being contested by appropriate proceedings being diligently
prosecuted; and
``(7) allow the United States trustee, or a designated
representative of the United States trustee, to inspect the
debtor's business premises, books, and records at reasonable
times, after reasonable prior written notice, unless notice
is waived by the debtor.''.
(b) Clerical Amendment.--The table of sections for chapter
11 of title 11, United States Code, as amended by section
321, is amended by inserting after the item relating to
section 1115 the following:
``1116. Duties of trustee or debtor in possession in small business
cases.''.
SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121 of title 11, United States Code, is amended by
striking subsection (e) and inserting the following:
``(e) In a small business case--
``(1) only the debtor may file a plan until after 180 days
after the date of the order for relief, unless that period
is--
``(A) extended as provided by this subsection, after notice
and a hearing; or
``(B) the court, for cause, orders otherwise;
``(2) the plan and a disclosure statement (if any) shall be
filed not later than 300 days after the date of the order for
relief; and
``(3) the time periods specified in paragraphs (1) and (2),
and the time fixed in section 1129(e) within which the plan
shall be confirmed, may be extended only if--
``(A) the debtor, after providing notice to parties in
interest (including the United States trustee), demonstrates
by a preponderance of the evidence that it is more likely
than not that the court will confirm a plan within a
reasonable period of time;
``(B) a new deadline is imposed at the time the extension
is granted; and
``(C) the order extending time is signed before the
existing deadline has expired.''.
SEC. 438. 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 court shall confirm a
plan that complies with the applicable provisions of this
title and that is filed in accordance with section 1121(e)
not later than 45 days after the plan is filed unless the
time for confirmation is extended in accordance with section
1121(e)(3).''.
SEC. 439. 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:
[[Page S794]]
``(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; and'';
(2) in paragraph (5), by striking ``and'' at the end;
(3) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(4) by adding at the end the following:
``(7) in each of such small business cases--
``(A) conduct an initial debtor interview as soon as
practicable after the date of the order for relief but before
the first meeting scheduled under section 341(a) of title 11,
at which time the United States trustee shall--
``(i) begin to investigate the debtor's viability;
``(ii) inquire about the debtor's business plan;
``(iii) explain the debtor's obligations to file monthly
operating reports and other required reports;
``(iv) attempt to develop an agreed scheduling order; and
``(v) inform the debtor of other obligations;
``(B) if determined to be appropriate and advisable, visit
the appropriate business premises of the debtor, ascertain
the state of the debtor's books and records, and verify that
the debtor has filed its tax returns; and
``(C) review and monitor diligently the debtor's
activities, to identify as promptly as possible whether the
debtor will be unable to confirm a plan; and
``(8) in any case in which the United States trustee finds
material grounds for any relief under section 1112 of title
11, the United States trustee shall apply promptly after
making that finding to the court for relief.''.
SEC. 440. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is
amended--
(1) in the matter preceding paragraph (1), by striking ``,
may''; and
(2) by striking paragraph (1) and inserting the following:
``(1) shall hold such status conferences as are necessary
to further the expeditious and economical resolution of the
case; and''.
SEC. 441. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, as amended by
sections 106, 305, and 311, is amended--
(1) in subsection (k), as so redesignated by section 305--
(A) by striking ``An'' and inserting ``(1) Except as
provided in paragraph (2), an''; and
(B) by adding at the end the following:
``(2) If such violation is based on an action taken by an
entity in the good faith belief that subsection (h) applies
to the debtor, the recovery under paragraph (1) of this
subsection against such entity shall be limited to actual
damages.''; and
(2) by adding at the end the following:
``(n)(1) Except as provided in paragraph (2), subsection
(a) does not apply in a case in which the debtor--
``(A) is a debtor in a small business case pending at the
time the petition is filed;
``(B) was a debtor in a small business case that was
dismissed for any reason by an order that became final in the
2-year period ending on the date of the order for relief
entered with respect to the petition;
``(C) was a debtor in a small business case in which a plan
was confirmed in the 2-year period ending on the date of the
order for relief entered with respect to the petition; or
``(D) is an entity that has acquired substantially all of
the assets or business of a small business debtor described
in subparagraph (A), (B), or (C), unless such entity
establishes by a preponderance of the evidence that such
entity acquired substantially all of the assets or business
of such small business debtor in good faith and not for the
purpose of evading this paragraph.
``(2) Paragraph (1) does not apply--
``(A) to an involuntary case involving no collusion by the
debtor with creditors; or
``(B) to the filing of a petition if--
``(i) the debtor proves by a preponderance of the evidence
that the filing of the petition resulted from circumstances
beyond the control of the debtor not foreseeable at the time
the case then pending was filed; and
``(ii) it is more likely than not that the court will
confirm a feasible plan, but not a liquidating plan, within a
reasonable period of time.''.
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND
APPOINTMENT OF TRUSTEE.
(a) Expanded Grounds for Dismissal or Conversion.--Section
1112 of title 11, United States Code, is amended by striking
subsection (b) and inserting the following:
``(b)(1) Except as provided in paragraph (2) of this
subsection, subsection (c) of this section, and section
1104(a)(3), on request of a party in interest, and after
notice and a hearing, absent unusual circumstances
specifically identified by the court that establish that the
requested conversion or dismissal is not in the best
interests of creditors and the estate, the court shall
convert a case under this chapter to a case under chapter 7
or dismiss a case under this chapter, whichever is in the
best interests of creditors and the estate, if the movant
establishes cause.
``(2) The relief provided in paragraph (1) shall not be
granted absent unusual circumstances specifically identified
by the court that establish that such relief is not in the
best interests of creditors and the estate, if the debtor or
another party in interest objects and establishes that--
``(A) there is a reasonable likelihood that a plan will be
confirmed within the timeframes established in sections
1121(e) and 1129(e) of this title, or if such sections do not
apply, within a reasonable period of time; and
``(B) the grounds for granting such relief include an act
or omission of the debtor other than under paragraph (4)(A)--
``(i) for which there exists a reasonable justification for
the act or omission; and
``(ii) that will be cured within a reasonable period of
time fixed by the court.
``(3) The court shall commence the hearing on a motion
under this subsection not later than 30 days after filing of
the motion, and shall decide the motion not later than 15
days after commencement of such hearing, unless the movant
expressly consents to a continuance for a specific period of
time or compelling circumstances prevent the court from
meeting the time limits established by this paragraph.
``(4) For purposes of this subsection, the term `cause'
includes--
``(A) substantial or continuing loss to or diminution of
the estate and the absence of a reasonable likelihood of
rehabilitation;
``(B) gross mismanagement of the estate;
``(C) failure to maintain appropriate insurance that poses
a risk to the estate or to the public;
``(D) unauthorized use of cash collateral substantially
harmful to 1 or more creditors;
``(E) failure to comply with an order of the court;
``(F) unexcused failure to satisfy timely any filing or
reporting requirement established by this title or by any
rule applicable to a case under this chapter;
``(G) failure to attend the meeting of creditors convened
under section 341(a) or an examination ordered under rule
2004 of the Federal Rules of Bankruptcy Procedure without
good cause shown by the debtor;
``(H) failure timely to provide information or attend
meetings reasonably requested by the United States trustee
(or the bankruptcy administrator, if any);
``(I) failure timely to pay taxes owed after the date of
the order for relief or to file tax returns due after the
date of the order for relief;
``(J) failure to file a disclosure statement, or to file or
confirm a plan, within the time fixed by this title or by
order of the court;
``(K) failure to pay any fees or charges required under
chapter 123 of title 28;
``(L) revocation of an order of confirmation under section
1144;
``(M) inability to effectuate substantial consummation of a
confirmed plan;
``(N) material default by the debtor with respect to a
confirmed plan;
``(O) termination of a confirmed plan by reason of the
occurrence of a condition specified in the plan; and
``(P) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of the
filing of the petition.''.
(b) Additional Grounds for Appointment of Trustee.--Section
1104(a) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking ``or'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(3) if grounds exist to convert or dismiss the case under
section 1112, but the court determines that the appointment
of a trustee or an examiner is in the best interests of
creditors and the estate.''.
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED STATES CODE,
WITH RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of enactment of this
Act, the Administrator of the Small Business Administration,
in consultation with the Attorney General, the Director of
the Executive Office for United States Trustees, and the
Director of the Administrative Office of the United States
Courts, shall--
(1) conduct a study to determine--
(A) the internal and external factors that cause small
businesses, especially sole proprietorships, to become
debtors in cases under title 11, United States Code, and that
cause certain small businesses to successfully complete cases
under chapter 11 of such title; and
(B) how Federal laws relating to bankruptcy may be made
more effective and efficient in assisting small businesses to
remain viable; and
(2) submit to the President pro tempore of the Senate and
the Speaker of the House of Representatives a report
summarizing that study.
SEC. 444. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is
amended--
(1) by inserting ``or 30 days after the court determines
that the debtor is subject to this paragraph, whichever is
later'' after ``90-day period)''; and
(2) by striking subparagraph (B) and inserting the
following:
``(B) the debtor has commenced monthly payments that--
``(i) may, in the debtor's sole discretion, notwithstanding
section 363(c)(2), be made from rents or other income
generated before, on, or after the date of the commencement
of the case by or from the property to each creditor whose
claim is secured by such real estate (other than a claim
secured by a judgment lien or by an unmatured statutory
lien); and
``(ii) are in an amount equal to interest at the then
applicable nondefault contract rate of interest on the value
of the creditor's interest in the real estate; or''.
[[Page S795]]
SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, is
amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(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 a penalty provision, for the period of 2 years
following the later of the rejection date or the 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 an entity other than the debtor, 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);''.
SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A PLAN
ADMINISTRATOR OF AN EMPLOYEE BENEFIT PLAN.
(a) In General.--Section 521(a) of title 11, United States
Code, as amended by sections 106 and 304, is amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(3) by adding after paragraph (6) the following:
``(7) unless a trustee is serving in the case, continue to
perform the obligations required of the administrator (as
defined in section 3 of the Employee Retirement Income
Security Act of 1974) of an employee benefit plan if at the
time of the commencement of the case the debtor (or any
entity designated by the debtor) served as such
administrator.''.
(b) Duties of Trustees.--Section 704(a) of title 11, United
States Code, as amended by sections 102 and 219, is amended--
(1) in paragraph (10), by striking ``and'' at the end; and
(2) by adding at the end the following:
``(11) if, at the time of the commencement of the case, the
debtor (or any entity designated by the debtor) served as the
administrator (as defined in section 3 of the Employee
Retirement Income Security Act of 1974) of an employee
benefit plan, continue to perform the obligations required of
the administrator; and''.
(c) Conforming Amendment.--Section 1106(a)(1) of title 11,
United States Code, is amended to read as follows:
``(1) perform the duties of the trustee, as specified in
paragraphs (2), (5), (7), (8), (9), (10), and (11) of section
704;''.
SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EMPLOYEES.
Section 1114(d) of title 11, United States Code, is
amended--
(1) by striking ``appoint'' and inserting ``order the
appointment of'', and
(2) by adding at the end the following: ``The United States
trustee shall appoint any such committee.''.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.
(a) Technical Amendment Relating to Municipalities.--
Section 921(d) of title 11, United States Code, is amended by
inserting ``notwithstanding section 301(b)'' before the
period at the end.
(b) Conforming Amendment.--Section 301 of title 11, United
States Code, is amended--
(1) by inserting ``(a)'' before ``A voluntary''; and
(2) by striking the last sentence and inserting the
following:
``(b) The commencement of a voluntary case under a chapter
of this title constitutes an order for relief under such
chapter.''.
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.
Section 901(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--BANKRUPTCY DATA
SEC. 601. IMPROVED BANKRUPTCY STATISTICS.
(a) In General.--Chapter 6 of title 28, United States Code,
is amended by adding at the end the following:
``Sec. 159. Bankruptcy statistics
``(a) The clerk of the district court, or the clerk of the
bankruptcy court if one is certified pursuant to section
156(b) of this title, shall collect statistics regarding
debtors who are individuals with primarily consumer debts
seeking relief under chapters 7, 11, and 13 of title 11.
Those statistics shall be in a standardized format prescribed
by the Director of the Administrative Office of the United
States Courts (referred to in this section as the
`Director').
``(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 July 1, 2008, 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 debtors;
``(B) the current monthly income, average income, and
average expenses of 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 cases
filed during 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 date of the
filing of the petition and the closing of the case for cases
closed during the reporting period;
``(E) for cases closed during the reporting period--
``(i) the number of cases in which a reaffirmation
agreement was filed; and
``(ii)(I) the total number of reaffirmation agreements
filed;
``(II) of those cases in which a reaffirmation agreement
was filed, the number of cases in which the debtor was not
represented by an attorney; and
``(III) of those cases in which a reaffirmation agreement
was filed, the number of cases in which the reaffirmation
agreement 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 entered determining the
value of property securing a claim;
``(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 during the 6-year period preceding 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 attorney or damages awarded under
such Rule.''.
(b) Clerical Amendment.--The table of sections for chapter
6 of title 28, United States Code, is amended by adding at
the end the following:
``159. Bankruptcy statistics.''.
(c) Effective Date.--The amendments made by this section
shall take effect 18 months after the date of enactment of
this Act.
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY
DATA.
(a) Amendment.--Chapter 39 of title 28, United States Code,
is amended by adding at the end 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
in cases under chapter 11 of title 11.
``(b) Reports.--Each report referred to in subsection (a)
shall be designed (and the requirements as to place and
manner of filing shall be established) so as to facilitate
compilation of data and maximum possible access of the
public, both by physical inspection at one 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;
``(2) economy, simplicity, and lack of undue burden on
persons with a duty to file reports; and
``(3) appropriate privacy concerns and safeguards.
``(d) Final Reports.--The uniform forms for final reports
required under subsection (a) for use 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;
[[Page S796]]
``(2) assets abandoned;
``(3) assets exempted;
``(4) receipts and disbursements of the estate;
``(5) expenses of administration, including for use under
section 707(b), actual costs of administering cases under
chapter 13 of title 11;
``(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.--The uniform forms for periodic
reports required under subsection (a) for use 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 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 of the date of the
order for relief and at the 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, 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) Clerical Amendment.--The table of sections for chapter
39 of title 28, United States Code, is amended by adding at
the end the following:
``589b. Bankruptcy data.''.
SEC. 603. AUDIT PROCEDURES.
(a) In General.--
(1) Establishment of procedures.--The Attorney General (in
judicial districts served by United States trustees) and the
Judicial Conference of the United States (in judicial
districts served by bankruptcy administrators) shall
establish procedures to determine the accuracy, veracity, and
completeness of petitions, schedules, and other information
that the debtor is required to provide under sections 521 and
1322 of title 11, United States Code, and, if applicable,
section 111 of such title, in cases filed under chapter 7 or
13 of such title in which the debtor is an individual. Such
audits shall be in accordance with generally accepted
auditing standards and performed by independent certified
public accountants or independent licensed public
accountants, provided that the Attorney General and the
Judicial Conference, as appropriate, may develop alternative
auditing standards not later than 2 years after the date of
enactment of this Act.
(2) Procedures.--Those procedures required by paragraph (1)
shall--
(A) establish a method of selecting appropriate qualified
persons to contract to perform those audits;
(B) 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;
(C) require audits of schedules of income and expenses that
reflect greater than average variances from the statistical
norm of the district in which the schedules were filed if
those variances occur by reason of higher income or higher
expenses than the statistical norm of the district in which
the schedules were filed; and
(D) 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.
(b) Amendments.--Section 586 of title 28, United States
Code, is amended--
(1) in subsection (a), by striking paragraph (6) and
inserting the following:
``(6) make such reports as the Attorney General directs,
including the results of audits performed under section
603(a) of the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005;''; and
(2) by adding at the end the following:
``(f)(1) The United States trustee for each district is
authorized to contract with auditors to perform audits in
cases designated by the United States trustee, in accordance
with the procedures established under section 603(a) of the
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005.
``(2)(A) The report of each audit referred to in paragraph
(1) 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 in which a material misstatement of
income or expenditures or of assets has been reported, the
clerk of the district court (or the clerk of the bankruptcy
court if one is certified under section 156(b) of this title)
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; 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.''.
(c) Amendments to Section 521 of Title 11, U.S.C.--Section
521(a) of title 11, United States Code, as so designated by
section 106, is amended in each of paragraphs (3) and (4) by
inserting ``or an auditor serving under section 586(f) of
title 28'' after ``serving in the case''.
(d) Amendments to Section 727 of Title 11, U.S.C.--Section
727(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) the debtor has failed to explain satisfactorily--
``(A) a material misstatement in an audit referred to in
section 586(f) of title 28; 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 referred to in
section 586(f) of title 28.''.
(e) Effective Date.--The amendments made by this section
shall take effect 18 months after the date of enactment of
this Act.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF
BANKRUPTCY DATA.
It is the sense of 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, 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 Congress and the Judicial Conference of the United States
may determine; and
(2) there should be established a bankruptcy data system in
which--
(A) a single set of data definitions and forms are used to
collect data nationwide; and
(B) data for any particular bankruptcy case are aggregated
in the same electronic record.
TITLE VII--BANKRUPTCY TAX PROVISIONS
SEC. 701. TREATMENT OF CERTAIN LIENS.
(a) Treatment of Certain Liens.--Section 724 of title 11,
United States Code, is amended--
(1) in subsection (b), in the matter preceding paragraph
(1), by inserting ``(other than to the extent that there is a
properly perfected unavoidable tax lien arising in connection
with an ad valorem tax on real or personal property of the
estate)'' after ``under this title'';
(2) in subsection (b)(2), by inserting ``(except that such
expenses, other than claims for wages, salaries, or
commissions that arise after the date of the filing of the
petition, shall be limited to expenses incurred under chapter
7 of this title and shall not include expenses incurred under
chapter 11 of this title)'' after ``507(a)(1)''; and
(3) by adding at the end the following:
``(e) Before subordinating a tax lien on real or personal
property of the estate, the trustee shall--
``(1) exhaust the unencumbered assets of the estate; and
``(2) in a manner consistent with section 506(c), recover
from property securing an allowed secured claim the
reasonable, necessary costs and expenses of preserving or
disposing of such property.
``(f) Notwithstanding the exclusion of ad valorem tax liens
under this section and subject to the requirements of
subsection (e), the following may be paid from property of
the estate which secures a tax lien, or the proceeds of such
property:
``(1) Claims for wages, salaries, and commissions that are
entitled to priority under section 507(a)(4).
``(2) Claims for contributions to an employee benefit plan
entitled to priority under section 507(a)(5).''.
(b) Determination of Tax Liability.--Section 505(a)(2) of
title 11, United States Code, is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(C) the amount or legality of any amount arising in
connection with an ad valorem tax on real or personal
property of the estate, if the applicable period for
contesting or redetermining that amount under any law (other
than a bankruptcy law) has expired.''.
SEC. 702. TREATMENT OF FUEL TAX CLAIMS.
Section 501 of title 11, United States Code, is amended by
adding at the end the following:
[[Page S797]]
``(e) A claim arising from the liability of a debtor for
fuel use tax assessed consistent with the requirements of
section 31705 of title 49 may be filed by the base
jurisdiction designated pursuant to the International Fuel
Tax Agreement (as defined in section 31701 of title 49) and,
if so filed, shall be allowed as a single claim.''.
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
Section 505(b) of title 11, United States Code, is
amended--
(1) in the first sentence, by inserting ``at the address
and in the manner designated in paragraph (1)'' after
``determination of such tax'';
(2) by striking ``(1) upon payment'' and inserting ``(A)
upon payment'';
(3) by striking ``(A) such governmental unit'' and
inserting ``(i) such governmental unit'';
(4) by striking ``(B) such governmental unit'' and
inserting ``(ii) such governmental unit'';
(5) by striking ``(2) upon payment'' and inserting ``(B)
upon payment'';
(6) by striking ``(3) upon payment'' and inserting ``(C)
upon payment'';
(7) by striking ``(b)'' and inserting ``(2)''; and
(8) by inserting before paragraph (2), as so designated,
the following:
``(b)(1)(A) The clerk shall maintain a list under which a
Federal, State, or local governmental unit responsible for
the collection of taxes within the district may--
``(i) designate an address for service of requests under
this subsection; and
``(ii) describe where further information concerning
additional requirements for filing such requests may be
found.
``(B) If such governmental unit does not designate an
address and provide such address to the clerk under
subparagraph (A), any request made under this subsection may
be served at the address for the filing of a tax return or
protest with the appropriate taxing authority of such
governmental unit.''.
SEC. 704. RATE OF INTEREST ON TAX CLAIMS.
(a) In General.--Subchapter I of chapter 5 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 511. Rate of interest on tax claims
``(a) If any provision of this title requires the payment
of interest on a tax claim or on an administrative expense
tax, or the payment of interest to enable a creditor to
receive the present value of the allowed amount of a tax
claim, the rate of interest shall be the rate determined
under applicable nonbankruptcy law.
``(b) In the case of taxes paid under a confirmed plan
under this title, the rate of interest shall be determined as
of the calendar month in which the plan is confirmed.''.
(b) Clerical Amendment.--The table of sections for
subchapter I of chapter 5 of title 11, United States Code, is
amended by adding at the end the following:
``511. Rate of interest on tax claims.''.
SEC. 705. PRIORITY OF TAX CLAIMS.
Section 507(a)(8) of title 11, United States Code, is
amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by inserting ``for
a taxable year ending on or before the date of the filing of
the petition'' after ``gross receipts'';
(B) in clause (i), by striking ``for a taxable year ending
on or before the date of the filing of the petition''; and
(C) by striking clause (ii) and inserting the following:
``(ii) assessed within 240 days before the date of the
filing of the petition, exclusive of--
``(I) any time during which an offer in compromise with
respect to that tax was pending or in effect during that 240-
day period, plus 30 days; and
``(II) any time during which a stay of proceedings against
collections was in effect in a prior case under this title
during that 240-day period, plus 90 days.''; and
(2) by adding at the end the following:
``An otherwise applicable time period specified in this
paragraph shall be suspended for any period during which a
governmental unit is prohibited under applicable
nonbankruptcy law from collecting a tax as a result of a
request by the debtor for a hearing and an appeal of any
collection action taken or proposed against the debtor, plus
90 days; plus any time during which the stay of proceedings
was in effect in a prior case under this title or during
which collection was precluded by the existence of 1 or more
confirmed plans under this title, plus 90 days.''.
SEC. 706. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(8)(B) of title 11, United States Code, is
amended by striking ``assessed'' and inserting ``incurred''.
SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 13.
Section 1328(a)(2) of title 11, United States Code, as
amended by section 314, is amended by striking ``paragraph''
and inserting ``section 507(a)(8)(C) or in paragraph (1)(B),
(1)(C),''.
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 11.
Section 1141(d) of title 11, United States Code, as amended
by sections 321 and 330, is amended by adding at the end the
following:
``(6) Notwithstanding paragraph (1), the confirmation of a
plan does not discharge a debtor that is a corporation from
any debt--
``(A) of a kind specified in paragraph (2)(A) or (2)(B) of
section 523(a) that is owed to a domestic governmental unit,
or owed to a person as the result of an action filed under
subchapter III of chapter 37 of title 31 or any similar State
statute; or
``(B) for a tax or customs duty with respect to which the
debtor--
``(i) made a fraudulent return; or
``(ii) willfully attempted in any manner to evade or to
defeat such tax or such customs duty.''.
SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO PREPETITION
TAXES.
Section 362(a)(8) of title 11, United States Code, is
amended by striking ``the debtor'' and inserting ``a
corporate debtor's tax liability for a taxable period the
bankruptcy court may determine or concerning the tax
liability of a debtor who is an individual for a taxable
period ending before the date of the order for relief under
this title''.
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.
Section 1129(a)(9) of title 11, United States Code, is
amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) in subparagraph (C), by striking ``deferred cash
payments,'' and all that follows through the end of the
subparagraph, and inserting ``regular installment payments in
cash--
``(i) of a total value, as of the effective date of the
plan, equal to the allowed amount of such claim;
``(ii) over a period ending not later than 5 years after
the date of the order for relief under section 301, 302, or
303; and
``(iii) in a manner not less favorable than the most
favored nonpriority unsecured claim provided for by the plan
(other than cash payments made to a class of creditors under
section 1122(b)); and''; and
(3) by adding at the end the following:
``(D) with respect to a secured claim which would otherwise
meet the description of an unsecured claim of a governmental
unit under section 507(a)(8), but for the secured status of
that claim, the holder of that claim will receive on account
of that claim, cash payments, in the same manner and over the
same period, as prescribed in subparagraph (C).''.
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.
Section 545(2) of title 11, United States Code, is amended
by inserting before the semicolon at the end the following:
``, except in any case in which a purchaser is a purchaser
described in section 6323 of the Internal Revenue Code of
1986, or in any other similar provision of State or local
law''.
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.
(a) Payment of Taxes Required.--Section 960 of title 28,
United States Code, is amended--
(1) by inserting ``(a)'' before ``Any''; and
(2) by adding at the end the following:
``(b) A tax under subsection (a) shall be paid on or before
the due date of the tax under applicable nonbankruptcy law,
unless--
``(1) the tax is a property tax secured by a lien against
property that is abandoned under section 554 of title 11,
within a reasonable period of time after the lien attaches,
by the trustee in a case under 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
or elected under chapter 7 of title 11; or
``(2) before the due date of the tax, an order of the court
makes a finding of probable insufficiency of funds of the
estate to pay in full the administrative expenses allowed
under section 503(b) of title 11 that have the same priority
in distribution under section 726(b) of title 11 as the
priority of that tax.''.
(b) Payment of Ad Valorem Taxes Required.--Section
503(b)(1)(B)(i) of title 11, United States Code, is amended
by inserting ``whether secured or unsecured, including
property taxes for which liability is in rem, in personam, or
both,'' before ``except''.
(c) Request for Payment of Administrative Expense Taxes
Eliminated.--Section 503(b)(1) of title 11, United States
Code, is amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) in subparagraph (C), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(D) notwithstanding the requirements of subsection (a), a
governmental unit shall not be required to file a request for
the payment of an expense described in subparagraph (B) or
(C), as a condition of its being an allowed administrative
expense;''.
(d) Payment of Taxes and Fees as Secured Claims.--Section
506 of title 11, United States Code, is amended--
(1) in subsection (b), by inserting ``or State statute''
after ``agreement''; and
(2) in subsection (c), by inserting ``, including the
payment of all ad valorem property taxes with respect to the
property'' before the period at the end.
SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is
amended by striking ``before the date on which the trustee
commences distribution under this section;'' and inserting
the following: ``on or before the earlier of--
``(A) the date that is 10 days after the mailing to
creditors of the summary of the trustee's final report; or
[[Page S798]]
``(B) the date on which the trustee commences final
distribution under this section;''.
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.
Section 523(a) of title 11, United States Code, as amended
by sections 215 and 224, is amended--
(1) in paragraph (1)(B)--
(A) in the matter preceding clause (i), by inserting ``or
equivalent report or notice,'' after ``a return,'';
(B) in clause (i), by inserting ``or given'' after
``filed''; and
(C) in clause (ii)--
(i) by inserting ``or given'' after ``filed''; and
(ii) by inserting ``, report, or notice'' after ``return'';
and
(2) by adding at the end the following:
``For purposes of this subsection, the term `return' means a
return that satisfies the requirements of applicable
nonbankruptcy law (including applicable filing requirements).
Such term includes a return prepared pursuant to section
6020(a) of the Internal Revenue Code of 1986, or similar
State or local law, or a written stipulation to a judgment or
a final order entered by a nonbankruptcy tribunal, but does
not include a return made pursuant to section 6020(b) of the
Internal Revenue Code of 1986, or a similar State or local
law.''.
SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID
TAXES.
Section 505(b)(2) of title 11, United States Code, as
amended by section 703, is amended by inserting ``the
estate,'' after ``misrepresentation,''.
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER
13 PLANS.
(a) Filing of Prepetition Tax Returns Required for Plan
Confirmation.--Section 1325(a) of title 11, United States
Code, as amended by sections 102, 213, and 306, is amended by
inserting after paragraph (8) the following:
``(9) the debtor has filed all applicable Federal, State,
and local tax returns as required by section 1308.''.
(b) Additional Time Permitted for Filing Tax Returns.--
(1) In general.--Subchapter I of chapter 13 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 1308. Filing of prepetition tax returns
``(a) Not later than the day before the date on which the
meeting of the creditors is first scheduled to be held under
section 341(a), if the debtor was required to file a tax
return under applicable nonbankruptcy law, the debtor shall
file with appropriate tax authorities all tax returns for all
taxable periods ending during the 4-year period ending on the
date of the filing of the petition.
``(b)(1) Subject to paragraph (2), if the tax returns
required by subsection (a) have not been filed by the date on
which the meeting of creditors is first scheduled to be held
under section 341(a), the trustee may hold open that meeting
for a reasonable period of time to allow the debtor an
additional period of time to file any unfiled returns, but
such additional period of time shall not extend beyond--
``(A) for any return that is past due as of the date of the
filing of the petition, the date that is 120 days after the
date of that meeting; or
``(B) for any return that is not past due as of the date of
the filing of the petition, the later of--
``(i) the date that is 120 days after the date of that
meeting; or
``(ii) the date on which the return is due under the last
automatic extension of time for filing that return to which
the debtor is entitled, and for which request is timely made,
in accordance with applicable nonbankruptcy law.
``(2) After notice and a hearing, and order entered before
the tolling of any applicable filing period determined under
this subsection, if the debtor demonstrates by a
preponderance of the evidence that the failure to file a
return as required under this subsection is attributable to
circumstances beyond the control of the debtor, the court may
extend the filing period established by the trustee under
this subsection for--
``(A) a period of not more than 30 days for returns
described in paragraph (1); and
``(B) a period not to extend after the applicable extended
due date for a return described in paragraph (2).
``(c) For purposes of this section, the term `return'
includes a return prepared pursuant to subsection (a) or (b)
of section 6020 of the Internal Revenue Code of 1986, or a
similar State or local law, or a written stipulation to a
judgment or a final order entered by a nonbankruptcy
tribunal.''.
(2) Conforming amendment.--The table of sections for
subchapter I of chapter 13 of title 11, United States Code,
is amended by adding at the end 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 a tax return
under section 1308, 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 interest of the creditors and the estate.''.
(d) Timely Filed Claims.--Section 502(b)(9) of title 11,
United States Code, is amended by inserting before the period
at the end the following: ``, and except that in a case under
chapter 13, a claim of a governmental unit for a tax with
respect to a return filed under section 1308 shall be timely
if the claim is filed on or before the date that is 60 days
after the date on which such return was filed as required''.
(e) Rules for Objections to Claims and to Confirmation.--It
is the sense of Congress that the Judicial Conference of the
United States should, as soon as practicable after the date
of enactment of this Act, propose amended Federal Rules of
Bankruptcy Procedure that provide--
(1) notwithstanding the provisions of Rule 3015(f), in
cases under chapter 13 of title 11, United States Code, that
an objection to the confirmation of a plan filed by a
governmental unit on or before the date that is 60 days after
the date on which the debtor files all tax returns required
under sections 1308 and 1325(a)(7) of title 11, United States
Code, shall be treated for all purposes as if such objection
had been timely filed before such confirmation; and
(2) in addition to the provisions of Rule 3007, in a case
under chapter 13 of title 11, United States Code, that no
objection to a claim for a tax with respect to which a return
is required to be filed under section 1308 of title 11,
United States Code, shall be filed until such return has been
filed as required.
SEC. 717. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a)(1) of title 11, United States Code, is
amended--
(1) by inserting ``including a discussion of the potential
material Federal tax consequences of the plan to the debtor,
any successor to the debtor, and a hypothetical investor
typical of the holders of claims or interests in the case,''
after ``records,''; and
(2) by striking ``a hypothetical reasonable investor
typical of holders of claims or interests'' and inserting
``such a hypothetical investor''.
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended
by sections 224, 303, 311, and 401, is amended by inserting
after paragraph (25) the following:
``(26) under subsection (a), of the setoff under applicable
nonbankruptcy law of an income tax refund, by a governmental
unit, with respect to a taxable period that ended before the
date of the order for relief against an income tax liability
for a taxable period that also ended before the date of the
order for relief, except that in any case in which the setoff
of an income tax refund is not permitted under applicable
nonbankruptcy law 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, unless the court, on the motion of the trustee and
after notice and a hearing, grants the taxing authority
adequate protection (within the meaning of section 361) for
the secured claim of such authority in the setoff under
section 506(a);''.
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF
STATE AND LOCAL TAXES.
(a) In General.--
(1) Special provisions.--Section 346 of title 11, United
States Code, is amended to read as follows:
``Sec. 346. Special provisions related to the treatment of
State and local taxes
``(a) Whenever the Internal Revenue Code of 1986 provides
that a separate taxable estate or entity is created in a case
concerning a debtor under this title, and the income, gain,
loss, deductions, and credits of such estate shall be taxed
to or claimed by the estate, a separate taxable estate is
also created for purposes of any State and local law imposing
a tax on or measured by income and such income, gain, loss,
deductions, and credits shall be taxed to or claimed by the
estate and may not be taxed to or claimed by the debtor. The
preceding sentence shall not apply if the case is dismissed.
The trustee shall make tax returns of income required under
any such State or local law.
``(b) Whenever the Internal Revenue Code of 1986 provides
that no separate taxable estate shall be created in a case
concerning a debtor under this title, and the income, gain,
loss, deductions, and credits of an estate shall be taxed to
or claimed by the debtor, such income, gain, loss,
deductions, and credits shall be taxed to or claimed by the
debtor under a State or local law imposing a tax on or
measured by income and may not be taxed to or claimed by the
estate. The trustee shall make such tax returns of income of
corporations and of partnerships as are required under any
State or local law, but with respect to partnerships, shall
make such returns only to the extent such returns are also
required to be made under such Code. The estate shall be
liable for any tax imposed on such corporation or
partnership, but not for any tax imposed on partners or
members.
``(c) With respect to a partnership or any entity treated
as a partnership under a State or local law imposing a tax on
or measured by income that is a debtor in a case under this
title, any gain or loss resulting from a distribution of
property from such partnership, or any distributive share of
any income, gain, loss, deduction, or credit of a partner or
member that is distributed, or considered distributed, from
such partnership, after the commencement of the case, is
[[Page S799]]
gain, loss, income, deduction, or credit, as the case may be,
of the partner or member, and if such partner or member is a
debtor in a case under this title, shall be subject to tax in
accordance with subsection (a) or (b).
``(d) For purposes of any State or local law imposing a tax
on or measured by income, the taxable period of a debtor in a
case under this title shall terminate only if and to the
extent that the taxable period of such debtor terminates
under the Internal Revenue Code of 1986.
``(e) The estate in any case described in subsection (a)
shall use the same accounting method as the debtor used
immediately before the commencement of the case, if such
method of accounting complies with applicable nonbankruptcy
tax law.
``(f) For purposes of any State or local law imposing a tax
on or measured by income, a transfer of property from the
debtor to the estate or from the estate to the debtor shall
not be treated as a disposition for purposes of any provision
assigning tax consequences to a disposition, except to the
extent that such transfer is treated as a disposition under
the Internal Revenue Code of 1986.
``(g) Whenever a tax is imposed pursuant to a State or
local law imposing a tax on or measured by income pursuant to
subsection (a) or (b), such tax shall be imposed at rates
generally applicable to the same types of entities under such
State or local law.
``(h) The trustee shall withhold from any payment of claims
for wages, salaries, commissions, dividends, interest, or
other payments, or collect, any amount required to be
withheld or collected under applicable State or local tax
law, and shall pay such withheld or collected amount to the
appropriate governmental unit at the time and in the manner
required by such tax law, and with the same priority as the
claim from which such amount was withheld or collected was
paid.
``(i)(1) To the extent that any State or local law imposing
a tax on or measured by income provides for the carryover of
any tax attribute from one taxable period to a subsequent
taxable period, the estate shall succeed to such tax
attribute in any case in which such estate is subject to tax
under subsection (a).
``(2) After such a case is closed or dismissed, the debtor
shall succeed to any tax attribute to which the estate
succeeded under paragraph (1) to the extent consistent with
the Internal Revenue Code of 1986.
``(3) The estate may carry back any loss or tax attribute
to a taxable period of the debtor that ended before the date
of the order for relief under this title to the extent that--
``(A) applicable State or local tax law provides for a
carryback in the case of the debtor; and
``(B) the same or a similar tax attribute may be carried
back by the estate to such a taxable period of the debtor
under the Internal Revenue Code of 1986.
``(j)(1) For purposes of any State or local law imposing a
tax on or measured by income, income is not realized by the
estate, the debtor, or a successor to the debtor by reason of
discharge of indebtedness in a case under this title, except
to the extent, if any, that such income is subject to tax
under the Internal Revenue Code of 1986.
``(2) Whenever the Internal Revenue Code of 1986 provides
that the amount excluded from gross income in respect of the
discharge of indebtedness in a case under this title shall be
applied to reduce the tax attributes of the debtor or the
estate, a similar reduction shall be made under any State or
local law imposing a tax on or measured by income to the
extent such State or local law recognizes such attributes.
Such State or local law may also provide for the reduction of
other attributes to the extent that the full amount of income
from the discharge of indebtedness has not been applied.
``(k)(1) Except as provided in this section and section
505, the time and manner of filing tax returns and the items
of income, gain, loss, deduction, and credit of any taxpayer
shall be determined under applicable nonbankruptcy law.
``(2) For Federal tax purposes, the provisions of this
section are subject to the Internal Revenue Code of 1986 and
other applicable Federal nonbankruptcy law.''.
(2) Clerical Amendment.--The table of sections for chapter
3 of title 11, United States Code, is amended by striking the
item relating to section 346 and inserting the following:
``346. Special provisions related to the treatment of State and local
taxes.''.
(b) Conforming Amendments.--Title 11 of the United States
Code is amended--
(1) by striking section 728;
(2) in the table of sections for chapter 7 by striking the
item relating to section 728;
(3) in section 1146--
(A) by striking subsections (a) and (b); and
(B) by redesignating subsections (c) and (d) as subsections
(a) and (b), respectively; and
(4) in section 1231--
(A) by striking subsections (a) and (b); and
(B) by redesignating subsections (c) and (d) as subsections
(a) and (b), respectively.
SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RETURNS.
Section 521 of title 11, United States Code, as amended by
sections 106, 225, 305, 315, and 316, is amended by adding at
the end the following:
``(j)(1) Notwithstanding any other provision of this title,
if the debtor fails to file a tax return that becomes due
after the commencement of the case or to properly obtain an
extension of the due date for filing such return, the taxing
authority may request that the court enter an order
converting or dismissing the case.
``(2) If the debtor does not file the required return or
obtain the extension referred to in paragraph (1) within 90
days after a request is filed by the taxing authority under
that paragraph, the court shall convert or dismiss the case,
whichever is in the best interests of creditors and the
estate.''.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED
STATES CODE.
(a) In General.--Title 11, United States Code, is amended
by inserting after chapter 13 the following:
``CHAPTER 15--ANCILLARY AND OTHER CROSS-BORDER CASES
``Sec.
``1501. Purpose and scope of application.
``SUBCHAPTER I--GENERAL PROVISIONS
``1502. Definitions.
``1503. International obligations of the United States.
``1504. Commencement of ancillary case.
``1505. Authorization to act in a foreign country.
``1506. Public policy exception.
``1507. Additional assistance.
``1508. Interpretation.
``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
``1509. Right of direct access.
``1510. Limited jurisdiction.
``1511. Commencement of case under section 301 or 303.
``1512. Participation of a foreign representative in a case under this
title.
``1513. Access of foreign creditors to a case under this title.
``1514. Notification to foreign creditors concerning a case under this
title.
``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
``1515. Application for recognition.
``1516. Presumptions concerning recognition.
``1517. Order granting recognition.
``1518. Subsequent information.
``1519. Relief that may be granted upon filing petition for
recognition.
``1520. Effects of recognition of a foreign main proceeding.
``1521. Relief that may be granted upon recognition.
``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) courts of the United States, 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 pending 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.
[[Page S800]]
``(c) This chapter does not apply to--
``(1) a proceeding concerning an entity, other than a
foreign insurance company, identified by exclusion in section
109(b);
``(2) an individual, or to an individual and such
individual's spouse, who have debts within the limits
specified in section 109(e) and who are citizens of the
United States or aliens lawfully admitted for permanent
residence in the United States; or
``(3) an entity subject to a proceeding under the
Securities Investor Protection Act of 1970, 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.
``(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.
``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
pending 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, pending 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;
``(7) `recognition' means the entry of an order granting
recognition of a foreign main proceeding or foreign nonmain
proceeding under this chapter; and
``(8) `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 one 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, if recognition is granted, 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 by filing directly with the court a petition for
recognition of a foreign proceeding under section 1515.
``(b) If the court grants recognition under section 1517,
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 other than the
court which granted recognition shall be accompanied by a
certified copy of an order granting recognition under section
1517.
``(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, 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 States 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 a 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 the recognized 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,
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
letter or other formality is required.
``(c) When a notification of commencement of a case is to
be given to foreign creditors, such notification shall--
``(1) indicate the time period for filing proofs of claim
and specify the place for filing such proofs of claim;
``(2) indicate whether secured creditors need to file
proofs of claim; and
``(3) contain any other information required to be included
in such 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 proof of claim shall provide such
additional time to creditors with foreign addresses as is
reasonable under the circumstances.
[[Page S801]]
``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
``Sec. 1515. Application for recognition
``(a) A foreign representative applies to the court for
recognition of a 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 such
foreign proceeding and appointing the foreign representative;
``(2) a certificate from the foreign court affirming the
existence of such 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 such 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) shall 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 and that the person or body is a foreign
representative, 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 granting recognition
``(a) Subject to section 1506, after notice and a hearing,
an order recognizing a foreign proceeding shall be entered
if--
``(1) such foreign proceeding for which recognition is
sought 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; and
``(3) the petition meets the requirements of section 1515.
``(b) Such foreign proceeding shall be recognized--
``(1) as a foreign main proceeding if it is pending 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 order granting
recognition. A 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 a
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 such 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 filing petition
for recognition
``(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 granted.
``(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.
``(f) The exercise of rights not subject to the stay
arising under section 362(a) pursuant to paragraph (6), (7),
(17), or (27) of section 362(b) or pursuant to section 362(n)
shall not be stayed by any order of a court or administrative
agency in any proceeding under this chapter.
``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 apply with respect to the debtor
and the property of the debtor that is within the territorial
jurisdiction of the United States;
``(2) sections 363, 549, and 552 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
``(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).
``(f) The exercise of rights not subject to the stay
arising under section 362(a) pursuant to paragraph (6), (7),
(17), or (27) of section 362(b) or pursuant to section 362(n)
shall not be stayed by any order of a court or administrative
agency in any proceeding under this chapter.
``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), 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
[[Page S802]]
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, 553, and
724(a).
``(b) When a 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 a foreign court
or a foreign representative, either directly or through the
trustee.
``(b) The court is entitled to communicate directly with,
or to request information or assistance directly from, a
foreign court or a foreign representative, subject to the
rights of a party 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 a foreign court or a foreign
representative.
``(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 a
foreign court or a foreign representative.
``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
``If a foreign proceeding and a case under another chapter
of this title are pending concurrently regarding the same
debtor, the court shall seek cooperation and coordination
under sections 1525, 1526, and 1527, and the following shall
apply:
``(1) If the case in the United States pending at the time
the petition for recognition of such foreign proceeding is
filed--
``(A) any relief granted under section 1519 or 1521 must be
consistent with the relief granted in the case in the United
States; and
``(B) section 1520 does not apply even if such foreign
proceeding is recognized as a foreign main proceeding.
``(2) If a case in the United States under this title
commences after recognition, or after the date of the filing
of the petition for recognition, of such foreign proceeding--
``(A) 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 case in the United States; and
``(B) if such 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 laws of the United States, should be
administered in the foreign nonmain proceeding or concerns
information required in that proceeding.
``(4) In achieving cooperation and coordination under
sections 1528 and 1529, the court may grant any of the relief
authorized under section 305.
``Sec. 1530. Coordination of more than 1 foreign proceeding
``In matters referred to in section 1501, with respect to
more than 1 foreign proceeding regarding the debtor, the
court shall seek cooperation and coordination under sections
1525, 1526, and 1527, and the following shall apply:
``(1) Any relief granted under section 1519 or 1521 to a
representative of a foreign nonmain proceeding after
recognition of a foreign main proceeding must be consistent
with the foreign main proceeding.
``(2) If a foreign main proceeding is recognized after
recognition, or after the filing of a petition for
recognition, of a foreign nonmain proceeding, any relief in
effect under section 1519 or 1521 shall be reviewed by the
court and shall be modified or terminated if inconsistent
with the foreign main proceeding.
``(3) If, after recognition of a foreign nonmain
proceeding, another foreign nonmain proceeding is recognized,
the court shall grant, modify, or terminate relief for the
purpose of facilitating coordination of the proceedings.
``Sec. 1531. Presumption of insolvency based on recognition
of a foreign main proceeding
``In the absence of evidence to the contrary, recognition
of a foreign main proceeding is, for the purpose of
commencing a proceeding under section 303, proof that the
debtor is generally not paying its debts as such debts become
due.
``Sec. 1532. Rule of payment in concurrent proceedings
``Without prejudice to secured claims or rights in rem, a
creditor who has received payment with respect to its claim
in a foreign proceeding pursuant to a law relating to
insolvency may not receive a payment for the same claim in a
case under any other chapter of this title regarding the
debtor, so long as the payment to other creditors of the same
class is proportionately less than the payment the creditor
has already received.''.
(b) Clerical Amendment.--The table of chapters for title
11, United States Code, is amended by inserting after the
item relating to chapter 13 the following:
``15. Ancillary and Other Cross-Border Cases................1501''.....
SEC. 802. OTHER AMENDMENTS TO TITLES 11 AND 28, 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, 362(n), 555
through 557, and 559 through 562 apply in a case under
chapter 15''; and
(2) by adding at the end the following:
``(k) 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.--Section 101 of title 11, United States
Code, is amended by striking paragraphs (23) and (24) and
inserting the following:
``(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 such 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''.
(4) Venue of cases ancillary to foreign proceedings.--
Section 1410 of title 28, United States Code, is amended to
read as follows:
``Sec. 1410. Venue of cases ancillary to foreign proceedings
``A case under chapter 15 of title 11 may be commenced in
the district court of the United States for the district--
[[Page S803]]
``(1) in which the debtor has its principal place of
business or principal assets in the United States;
``(2) if the debtor does not have a place of business or
assets in the United States, in which there is pending
against the debtor an action or proceeding in a Federal or
State court; or
``(3) in a case other than those specified in paragraph (1)
or (2), in which venue will be consistent with the interests
of justice and the convenience of the parties, having regard
to the relief sought by the foreign representative.''.
(d) Other Sections of Title 11.--Title 11 of the United
States Code is amended--
(1) in section 109(b), by striking paragraph (3) and
inserting the following:
``(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, that has a branch or agency (as defined in
section 1(b) of the International Banking Act of 1978 in the
United States.'';
(2) in section 303, by striking subsection (k);
(3) by striking section 304;
(4) in the table of sections for chapter 3 by striking the
item relating to section 304;
(5) in section 306 by striking ``, 304,'' each place it
appears;
(6) in section 305(a) by striking paragraph (2) and
inserting the following:
``(2)(A) a petition under section 1515 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.''; and
(7) in section 508--
(A) by striking subsection (a); and
(B) in subsection (b), by striking ``(b)''.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR
RECEIVERS OF INSURED DEPOSITORY INSTITUTIONS.
(a) Definition of Qualified Financial Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)) is amended--
(A) by striking ``subsection--'' and inserting
``subsection, the following definitions shall apply:''; and
(B) in clause (i), by inserting ``, resolution, or order''
after ``any similar agreement that the Corporation determines
by regulation''.
(2) Insured credit unions.--Section 207(c)(8)(D) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is
amended--
(A) by striking ``subsection--'' and inserting
``subsection, the following definitions shall apply:''; and
(B) in clause (i), by inserting ``, resolution, or order''
after ``any similar agreement that the Board determines by
regulation''.
(b) Definition of Securities Contract.--
(1) FDIC-insured depository institutions.--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, mortgage loan, interest, group or index, or option,
and including any repurchase or reverse repurchase
transaction on any such security, certificate of deposit,
mortgage 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, mortgage 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, including any guarantee or
reimbursement obligation in connection with any agreement or
transaction referred to in this clause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(ii) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(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, mortgage loan, interest, group or index, or option,
and including any repurchase or reverse repurchase
transaction on any such security, certificate of deposit,
mortgage 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 Board 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, mortgage 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, including any guarantee or
reimbursement obligation in connection with any agreement or
transaction referred to in this clause.''.
(c) Definition of Commodity Contract.--
(1) FDIC-insured depository institutions.--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
[[Page S804]]
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) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in this clause, including any guarantee or reimbursement
obligation in connection with any agreement or transaction
referred to in this clause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(iii) of
the Federal Credit Union Act (12 U.S.C. 1787(c)(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) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in this clause, including any guarantee or reimbursement
obligation in connection with any agreement or transaction
referred to in this clause.''.
(d) Definition of Forward Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:
``(iv) Forward contract.--The term `forward contract'
means--
``(I) a contract (other than a commodity contract) for the
purchase, sale, or transfer of a commodity or any similar
good, article, service, right, or interest which is presently
or in the future becomes the subject of dealing in the
forward contract trade, or product or byproduct thereof, with
a maturity date more than 2 days after the date the contract
is entered into, including, a repurchase transaction, reverse
repurchase transaction, 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) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in subclause (I), (II), (III), or (IV), including any
guarantee or reimbursement obligation in connection with any
agreement or transaction referred to in any such
subclause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(iv) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(iv)) is
amended to read as follows:
``(iv) Forward contract.--The term `forward contract'
means--
``(I) a contract (other than a commodity contract) for the
purchase, sale, or transfer of a commodity or any similar
good, article, service, right, or interest which is presently
or in the future becomes the subject of dealing in the
forward contract trade, or product or byproduct thereof, with
a maturity date more than 2 days after the date the contract
is entered into, including, a repurchase transaction, reverse
repurchase transaction, 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) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in subclause (I), (II), (III), or (IV), including any
guarantee or reimbursement obligation in connection with any
agreement or transaction referred to in any such
subclause.''.
(e) Definition of Repurchase Agreement.--
(1) FDIC-insured depository institutions.--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) means an agreement, including related terms, which
provides for the transfer of one 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, mortgage loans, or interests with a
simultaneous agreement by such transferee to transfer to the
transferor thereof certificates of deposit, eligible bankers'
acceptances, securities, mortgage 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 any security agreement or arrangement or other
credit enhancement related to any agreement or transaction
referred to in subclause (I), (III), (IV), or (V), including
any guarantee or reimbursement obligation in connection with
any agreement or transaction referred to in any such
subclause.
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).''.
(2) Insured credit unions.--Section 207(c)(8)(D)(v) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(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) means an agreement, including related terms, which
provides for the transfer of one 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
[[Page S805]]
by the transferee of such certificates of deposit, eligible
bankers' acceptances, securities, mortgage loans, or
interests with a simultaneous agreement by such transferee to
transfer to the transferor thereof certificates of deposit,
eligible bankers' acceptances, securities, mortgage 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 Board
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 any security agreement or arrangement or other
credit enhancement related to any agreement or transaction
referred to in subclause (I), (III), (IV), or (V), including
any guarantee or reimbursement obligation in connection with
any agreement or transaction referred to in any such
subclause.
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.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(vi) 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 total return, credit spread or credit
swap, option, future, or forward agreement; a commodity index
or commodity swap, option, future, or forward agreement; or a
weather swap, weather derivative, or weather option;
``(II) any agreement or transaction that is similar to any
other agreement or transaction referred to in this clause and
that is of a type that has been, is presently, or in the
future becomes, the subject of recurrent dealings in the swap
markets (including terms and conditions incorporated by
reference in such agreement) and that is a forward, swap,
future, or option on one or more rates, currencies,
commodities, equity securities or other equity instruments,
debt securities or other debt instruments, quantitative
measures associated with an occurrence, extent of an
occurrence, or contingency associated with a financial,
commercial, or economic consequence, or economic or financial
indices or measures of economic or financial 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 subclause (I), (II), (III), (IV), or (V),
including any guarantee or reimbursement obligation in
connection with any agreement or transaction referred to in
any such subclause.
Such term is applicable for purposes of this subsection 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,
the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank
Products Act of 2000.''.
(2) Insured credit unions.--Section 207(c)(8)(D) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended
by adding at the end the following new clause:
``(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 total return, credit spread or credit
swap, option, future, or forward agreement; a commodity index
or commodity swap, option, future, or forward agreement; or a
weather swap, weather derivative, or weather option;
``(II) any agreement or transaction that is similar to any
other agreement or transaction referred to in this clause and
that is of a type that has been, is presently, or in the
future becomes, the subject of recurrent dealings in the swap
markets (including terms and conditions incorporated by
reference in such agreement) and that is a forward,
swap,future, or option on one or more rates, currencies,
commodities, equity securities or other equity instruments,
debt securities or other debt instruments, quantitative
measures associated with an occurrence, extent of an
occurrence, or contingency associated with a financial,
commercial, or economic consequence, or economic or financial
indices or measures of economic or financial 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 subclause (I), (II), (III), (IV), or (V),
including any guarantee or reimbursement obligation in
connection with any agreement or transaction referred to in
any such subclause.
Such term is applicable for purposes of this subsection 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,
the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank
Products Act of 2000.''.
(g) Definition of Transfer.--
(1) FDIC-insured depository institutions.--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
institution's equity of redemption.''.
(2) Insured credit unions.--Section 207(c)(8)(D) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) (as
amended by subsection (f) of this section) is amended by
adding at the end the following new clause:
``(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
institution's equity of redemption.''.
(h) Treatment of Qualified Financial Contracts.--
(1) FDIC-insured depository institutions.--Section 11(e)(8)
of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8))
is amended--
(A) in subparagraph (A)--
(i) by striking ``paragraph (10)'' and inserting
``paragraphs (9) and (10)'';
(ii) in clause (i), by striking ``to cause the termination
or liquidation'' and inserting ``such person has to cause the
termination, liquidation, or acceleration''; and
[[Page S806]]
(iii) by striking clause (ii) and inserting the following
new clause:
``(ii) any right under any security agreement or
arrangement or other credit enhancement related to one or
more qualified financial contracts described in clause
(i);''; and
(B) in subparagraph (E), by striking clause (ii) and
inserting the following:
``(ii) any right under any security agreement or
arrangement or other credit enhancement related to one or
more qualified financial contracts described in clause
(i);''.
(2) Insured credit unions.--Section 207(c)(8) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is amended--
(A) in subparagraph (A)--
(i) by striking ``paragraph (12)'' and inserting
``paragraphs (9) and (10)'';
(ii) in clause (i), by striking ``to cause the termination
or liquidation'' and inserting ``such person has to cause the
termination, liquidation, or acceleration''; and
(iii) by striking clause (ii) and inserting the following
new clause:
``(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
(B) in subparagraph (E), by striking clause (ii) and
inserting the following new clause:
``(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.--
(1) FDIC-insured depository institutions.--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 or any
other Federal or State law relating to the avoidance of
preferential or fraudulent transfers,'' before ``the
Corporation''.
(2) Insured credit unions.--Section 207(c)(8)(C)(i) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(C)(i)) is
amended by inserting ``section 5242 of the Revised Statutes
of the United States or any other Federal or State law
relating to the avoidance of preferential or fraudulent
transfers,'' before ``the Board''.
SEC. 902. AUTHORITY OF THE FDIC AND NCUAB WITH RESPECT TO
FAILED AND FAILING INSTITUTIONS.
(a) Federal Deposit Insurance Corporation.--
(1) In general.--Section 11(e)(8) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(A) 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
(B) 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.''.
(2) 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 by'' after ``the appointment of''.
(b) National Credit Union Administration Board.--
(1) In general.--Section 207(c)(8) of the Federal Credit
Union Act (12 U.S.C. 1787(c)(8)) is amended--
(A) in subparagraph (E) (as amended by section 901(h)), by
striking ``other than paragraph (12) of this subsection,
subsection (b)(9)'' and inserting ``other than subsections
(b)(9) and (c)(10)''; and
(B) 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 Board, or
authorizing any court or agency to limit or delay, in any
manner, the right or power of the Board 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 (c)(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 credit union 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.''.
(2) Technical and conforming amendment.--Section
207(c)(12)(A) of the Federal Credit Union Act (12 U.S.C.
1787(c)(12)(A)) is amended by inserting ``or the exercise of
rights or powers by'' after ``the appointment of''.
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED
FINANCIAL CONTRACTS.
(a) FDIC-Insured Depository Institutions.--
(1) 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 one 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 under
subparagraph (A)(i), the conservator or receiver for the
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 one 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 cleared by or
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) Definitions.--For purposes of this paragraph, 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, and the term
`clearing organization' has the same meaning as in section
402 of the Federal Deposit Insurance Corporation Improvement
Act of 1991.''.
(2) 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 in the
material immediately following clause (ii) by striking ``the
conservator'' and all that follows through the period and
inserting the following: ``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.''.
(3) Rights against receiver and conservator and treatment
of bridge banks.--
[[Page S807]]
Section 11(e)(10) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(10)) is amended--
(A) by redesignating subparagraph (B) as subparagraph (D);
and
(B) 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 that such person has to terminate,
liquidate, or net such contract under paragraph (8)(A) of
this subsection 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 that such person has
to terminate, liquidate, or net such contract under paragraph
(8)(E) of this subsection 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 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 paragraph, 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).
``(C) Treatment of bridge banks.--The following
institutions shall not be considered to be 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 paragraph (9):
``(i) A bridge bank.
``(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 the depository institution and the Corporation as
receiver for a depository institution in default.''.
(b) Insured Credit Unions.--
(1) Transfers of qualified financial contracts to financial
institutions.--Section 207(c)(9) of the Federal Credit Union
Act (12 U.S.C. 1787(c)(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 credit union in default which includes any
qualified financial contract, the conservator or liquidating
agent for such credit union 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 credit union in
default;
``(II) all claims of such person or any affiliate of such
person against such credit union 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 credit union);
``(III) all claims of such credit union 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 under
subparagraph (A)(i), the conservator or liquidating agent for
the credit union 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
liquidating agent transfers any qualified financial contract
and related claims, property, and credit enhancements
pursuant to subparagraph (A)(i) and such contract is cleared
by or 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) Definitions.--For purposes of this paragraph--
``(i) the term `financial institution' means a broker or
dealer, a depository institution, a futures commission
merchant, a credit union, or any other institution, as
determined by the Board by regulation to be a financial
institution; and
``(ii) the term `clearing organization' has the same
meaning as in section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991.''.
(2) Notice to qualified financial contract
counterparties.--Section 207(c)(10)(A) of the Federal Credit
Union Act (12 U.S.C. 1787(c)(10)(A)) is amended in the
material immediately following clause (ii) by striking ``the
conservator'' and all that follows through the period and
inserting the following: ``the conservator or liquidating
agent 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
liquidating agent in the case of a liquidation, or the
business day following such transfer in the case of a
conservatorship.''.
(3) Rights against liquidating agent and conservator and
treatment of bridge banks.--Section 207(c)(10) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(10)) is amended--
(A) by redesignating subparagraph (B) as subparagraph (D);
and
(B) by inserting after subparagraph (A) the following new
subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Liquidation.--A person who is a party to a qualified
financial contract with an insured credit union may not
exercise any right that such person has to terminate,
liquidate, or net such contract under paragraph (8)(A) of
this subsection 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 liquidating
agent for the credit union institution (or the insolvency or
financial condition of the credit union for which the
liquidating agent has been appointed)--
``(I) until 5:00 p.m. (eastern time) on the business day
following the date of the appointment of the liquidating
agent; 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 credit union may
not exercise any right that such person has to terminate,
liquidate, or net such contract under paragraph (8)(E) of
this subsection 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 conservator
for the credit union or the insolvency or financial condition
of the credit union for which the conservator has been
appointed).
``(iii) Notice.--For purposes of this paragraph, the Board
as conservator or liquidating agent of an insured credit
union shall be deemed to have notified a person who is a
party to a qualified financial contract with such credit
union if the Board has taken steps reasonably calculated to
provide notice to such person by the time specified in
subparagraph (A).
``(C) Treatment of bridge banks.--The following
institutions shall not be considered to be 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 paragraph (9):
``(i) A bridge bank.
``(ii) A credit union organized by the Board, for which a
conservator is appointed either--
``(I) immediately upon the organization of the credit
union; or
``(II) at the time of a purchase and assumption transaction
between the credit union and the Board as receiver for a
credit union in default.''.
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION
OF QUALIFIED FINANCIAL CONTRACTS.
(a) FDIC-Insured Depository Institutions.--Section 11(e) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)) is
amended--
(1) by redesignating paragraphs (11) through (15) as
paragraphs (12) through (16), respectively;
(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--
[[Page S808]]
``(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).'';
and
(3) by adding at the end the following new paragraph:
``(17) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection
only, and shall not be construed or applied so as to
challenge or affect the characterization, definition, or
treatment of any similar terms under any other statute,
regulation, or rule, including the Gramm-Leach-Bliley Act,
the Legal Certainty for Bank Products Act of 2000, the
securities laws (as that term is defined in section 3(a)(47)
of the Securities Exchange Act of 1934), and the Commodity
Exchange Act.''.
(b) Insured Credit Unions.--Section 207(c) of the Federal
Credit Union Act (12 U.S.C. 1787(c)) is amended--
(1) by redesignating paragraphs (11), (12), and (13) as
paragraphs (12), (13), and (14), respectively;
(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 liquidating agent with
respect to any qualified financial contract to which an
insured credit union is a party, the conservator or
liquidating agent for such credit union shall either--
``(A) disaffirm or repudiate all qualified financial
contracts between--
``(i) any person or any affiliate of such person; and
``(ii) the credit union 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).'';
and
(3) by adding at the end the following new paragraph:
``(15) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection
only, and shall not be construed or applied so as to
challenge or affect the characterization, definition, or
treatment of any similar terms under any other statute,
regulation, or rule, including the Gramm-Leach-Bliley Act,
the Legal Certainty for Bank Products Act of 2000, the
securities laws (as that term is defined in section (a)(47)
of the Securities Exchange Act of 1934), and the Commodity
Exchange Act.''.
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.
(a) FDIC-Insured Depository Institutions.--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 one 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.''.
(b) Insured Credit Unions.--Section 207(c)(8)(D) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended
by inserting after clause (vi) (as added by section 901(f))
the following new clause:
``(vii) Treatment of master agreement as one 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. 906. 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 (2)--
(A) in subparagraph (A)(ii), by inserting before the
semicolon ``, or is exempt from such registration by order of
the Securities and Exchange Commission''; and
(B) in subparagraph (B), by inserting before the period ``,
that has been granted an exemption under section 4(c)(1) of
the Commodity Exchange Act, or that is a multilateral
clearing organization (as defined in section 408 of this
Act)'';
(2) 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), so 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;'';
(3) in paragraph (11), by inserting before the period ``and
any other clearing organization with which such clearing
organization has a netting contract'';
(4) 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
close out values relating to such obligations or
entitlements) among the parties to the agreement; and''; and
(5) 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 striking subsection (a) and inserting the following:
``(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, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c)
of the Federal Credit Union 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, United States Code).''; 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 one 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, 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,
paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) of
the Federal Credit Union 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 striking subsection (a) and inserting the following:
``(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, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c)
of the Federal Credit Union 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 one 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, paragraphs (8)(E), (8)(F), and (10)(B) of
section 207(c) of the Federal Credit Union Act, and section
5(b)(2) of the Securities Investor Protection Act of
1970).''.
(d) Enforceability of Contracts With Uninsured National
Banks, Uninsured Federal Branches and Agencies, Certain
Uninsured State Member Banks, and Edge Act Corporations.--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 407A; and
(2) by inserting after section 406 the following new
section:
[[Page S809]]
``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL
BANKS, UNINSURED FEDERAL BRANCHES AND AGENCIES,
CERTAIN UNINSURED STATE MEMBER BANKS, AND EDGE
ACT CORPORATIONS.
``(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,
a corporation chartered under section 25A of the Federal
Reserve Act, or an uninsured State member bank which
operates, or operates as, a multilateral clearing
organization pursuant to section 409 of this Act, except that
for such purpose--
``(1) any reference to the `Corporation as receiver' or
`the receiver or the Corporation' shall refer to the receiver
appointed by the Comptroller of the Currency in the case of
an uninsured national bank or uninsured Federal branch or
agency, or to the receiver appointed by the Board of
Governors of the Federal Reserve System in the case of a
corporation chartered under section 25A of the Federal
Reserve Act or an uninsured State member bank;
``(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
appointed by the Comptroller of the Currency in the case of
an uninsured national bank or uninsured Federal branch or
agency, or to the receiver or conservator appointed by the
Board of Governors of the Federal Reserve System in the case
of a corporation chartered under section 25A of the Federal
Reserve Act or an uninsured State member bank; and
``(3) any reference to an `insured depository institution'
or `depository institution' shall refer to an uninsured
national bank, an uninsured Federal branch or Federal agency,
a corporation chartered under section 25A of the Federal
Reserve Act, or an uninsured State member bank which
operates, or operates as, a multilateral clearing
organization pursuant to section 409 of this Act.
``(b) Liability.--The liability of a receiver or
conservator of an uninsured national bank, uninsured Federal
branch or agency, a corporation chartered under section 25A
of the Federal Reserve Act, or an uninsured State member bank
which operates, or operates as, a multilateral clearing
organization pursuant to section 409 of this Act, 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 the
case of an uninsured national bank or uninsured Federal
branch or agency and the Board of Governors of the Federal
Reserve System in the case of a corporation chartered under
section 25A of the Federal Reserve Act, or an uninsured State
member bank that operates, or operates as, a multilateral
clearing organization pursuant to section 409 of this Act, in
consultation with the Federal Deposit Insurance Corporation,
may each promulgate regulations solely to implement this
section.
``(2) Specific requirement.--In promulgating regulations,
limited solely to implementing paragraphs (8), (9), (10), and
(11) of section 11(e) of the Federal Deposit Insurance Act,
the Comptroller of the Currency and the Board of Governors of
the Federal Reserve System each 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 meanings as in section 1(b) of the International
Banking Act of 1978.''.
SEC. 907. BANKRUPTCY LAW 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) any security agreement or arrangement, or other
credit enhancement related to any agreement or transaction
referred to in subparagraph (A), (B), (C), or (D), including
any guarantee or reimbursement obligation by or to a forward
contract merchant or financial participant in connection with
any agreement or transaction referred to in any such
subparagraph, but not to exceed the damages in connection
with any such agreement or transaction, measured in
accordance with section 562;'';
(B) in paragraph (46), by striking ``on any day during the
period beginning 90 days before the date of'' and inserting
``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)--
``(A) means--
``(i) an agreement, including related terms, which provides
for the transfer of one or more certificates of deposit,
mortgage related securities (as defined in section 3 of the
Securities Exchange Act of 1934), mortgage loans, interests
in mortgage related securities or mortgage loans, eligible
bankers' acceptances, qualified foreign government securities
(defined as a security that is a direct obligation of, or
that is fully guaranteed by, the central government of a
member of the Organization for Economic Cooperation and
Development), or 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, mortgage loans, or
interests, with a simultaneous agreement by such transferee
to transfer to the transferor thereof certificates of
deposit, eligible bankers' acceptance, securities, mortgage
loans, or interests of the kind described in this clause, 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) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in clause (i), (ii), (iii), or (iv), including any
guarantee or reimbursement obligation by or to a repo
participant or financial participant in connection with any
agreement or transaction referred to in any such clause, but
not to exceed the damages in connection with any such
agreement or transaction, measured in accordance with section
562 of this title; and
``(B) does not include a repurchase obligation under a
participation in a commercial mortgage loan;'';
(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--
``(I) an interest rate swap, option, future, or forward
agreement, including a rate floor, rate cap, rate collar,
cross-currency rate swap, and basis swap;
``(II) a spot, same day-tomorrow, tomorrow-next, forward,
or other foreign exchange or precious metals agreement;
``(III) a currency swap, option, future, or forward
agreement;
``(IV) an equity index or equity swap, option, future, or
forward agreement;
``(V) a debt index or debt swap, option, future, or forward
agreement;
``(VI) a total return, credit spread or credit swap,
option, future, or forward agreement;
``(VII) a commodity index or a commodity swap, option,
future, or forward agreement; or
``(VIII) a weather swap, weather derivative, or weather
option;
``(ii) any agreement or transaction that is similar to any
other agreement or transaction referred to in this paragraph
and that--
``(I) is of a type that has been, is presently, or in the
future becomes, the subject of recurrent dealings in the swap
markets (including terms and conditions incorporated by
reference therein); and
``(II) is a forward, swap, future, or option on one or more
rates, currencies, commodities, equity securities, or other
equity instruments, debt securities or other debt
instruments, quantitative measures associated with an
occurrence, extent of an occurrence, or contingency
associated with a financial, commercial, or economic
consequence, or economic or financial indices or measures of
economic or financial risk or value;
[[Page S810]]
``(iii) any combination of agreements or transactions
referred to in this subparagraph;
``(iv) any option to enter into an agreement or transaction
referred to in this subparagraph;
``(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
``(vi) any security agreement or arrangement or other
credit enhancement related to any agreements or transactions
referred to in clause (i) through (v), including any
guarantee or reimbursement obligation by or to a swap
participant or financial participant in connection with any
agreement or transaction referred to in any such clause, but
not to exceed the damages in connection with any such
agreement or transaction, measured in accordance with section
562; and
``(B) 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,
the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank
Products Act of 2000;'';
(2) in section 741(7), by striking paragraph (7) and
inserting the following:
``(7) `securities contract'--
``(A) means--
``(i) a contract for the purchase, sale, or loan of a
security, a 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, mortgage loan, interest, group or index, or option,
and including any repurchase or reverse repurchase
transaction on any such security, certificate of deposit,
mortgage 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, mortgage 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 subparagraph;
``(vi) any combination of the agreements or transactions
referred to in this subparagraph;
``(vii) any option to enter into any agreement or
transaction referred to in this subparagraph;
``(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 subparagraph, except
that such master agreement shall be considered to be a
securities contract under this subparagraph 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 subparagraph, including any guarantee or
reimbursement obligation by or to a stockbroker, securities
clearing agency, financial institution, or financial
participant in connection with any agreement or transaction
referred to in this subparagraph, but not to exceed the
damages in connection with any such agreement or transaction,
measured in accordance with section 562; 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 agreement, without regard to whether the master
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) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in this paragraph, including any guarantee or
reimbursement obligation by or to a commodity broker or
financial participant in connection with any agreement or
transaction referred to in this paragraph, but not to exceed
the damages in connection with any such agreement or
transaction, measured in accordance with section 562;''.
(b) Definitions of Financial Institution, Financial
Participant, and Forward Contract Merchant.--Section 101 of
title 11, United States Code, is amended--
(1) by striking paragraph (22) and inserting the following:
``(22) `financial institution' means--
``(A) 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,
federally-insured credit union, or receiver, liquidating
agent, or conservator for such entity and, when any such
Federal reserve bank, receiver, liquidating agent,
conservator or entity is acting as agent or custodian for a
customer in connection with a securities contract (as defined
in section 741) such customer; or
``(B) in connection with a securities contract (as defined
in section 741) an investment company registered under the
Investment Company Act of 1940;'';
(2) by inserting after paragraph (22) the following:
``(22A) `financial participant' means--
``(A) an entity that, at the time it enters into a
securities contract, commodity contract, swap agreement,
repurchase agreement, or forward contract, or at the time of
the date of the filing of the petition, has one or more
agreements or transactions described in paragraph (1), (2),
(3), (4), (5), or (6) of section 561(a) with the debtor or
any other entity (other than an affiliate) of a total gross
dollar value of not less than $1,000,000,000 in notional or
actual principal amount outstanding on any day during the
previous 15-month period, or has gross mark-to-market
positions of not less than $100,000,000 (aggregated across
counterparties) in one or more such agreements or
transactions with the debtor or any other entity (other than
an affiliate) on any day during the previous 15-month period;
or
``(B) a clearing organization (as defined in section 402 of
the Federal Deposit Insurance Corporation Improvement Act of
1991);''; and
(3) by striking paragraph (26) and inserting the following:
``(26) `forward contract merchant' means a Federal reserve
bank, or an entity the business of which consists in whole or
in part of entering into forward contracts as or with
merchants in a commodity (as defined in section 761) 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;''.
(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'--
``(A) means an agreement providing for the exercise of
rights, including rights of netting, setoff, liquidation,
termination, acceleration, or close out, under or in
connection with one or more contracts that are described in
any one or more of paragraphs (1) through (5) of section
561(a), or any security agreement or arrangement or other
credit enhancement related to one or more of the foregoing,
including any guarantee or reimbursement obligation related
to 1 or more of the foregoing; and
``(B) if the agreement contains provisions relating to
agreements or transactions that are not contracts described
in paragraphs (1) through (5) of section 561(a), shall be
deemed to be a master netting agreement only with respect to
those agreements or transactions that are described in any
one or more of paragraphs (1) through (5) of section 561(a);
``(38B) `master netting agreement participant' means an
entity that, at any time before the date of 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 224, 303, 311, 401, and 718, is
amended--
(A) in paragraph (6), by inserting ``, pledged to, under
the control of,'' after ``held by'';
(B) in paragraph (7), by inserting ``, pledged to, under
the control of,'' after ``held by'';
(C) by striking paragraph (17) and inserting the following:
``(17) under subsection (a), of the setoff by a swap
participant or financial participant of a mutual debt and
claim under or in connection with one or more swap agreements
that constitutes the setoff of a claim against the debtor for
any payment or other transfer of
[[Page S811]]
property due from the debtor under or in connection with any
swap agreement against any payment due to the debtor from the
swap participant or financial participant under or in
connection with any swap agreement or against cash,
securities, or other property held by, pledged to, under the
control of, or due from such swap participant or financial
participant to margin, guarantee, secure, or settle any swap
agreement;''; and
(D) by inserting after paragraph (26) the following:
``(27) under subsection (a), of the setoff by a master
netting agreement participant of a mutual debt and claim
under or in connection with one 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
to, 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 that 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; and''.
(2) Limitation.--Section 362 of title 11, United States
Code, as amended by sections 106, 305, 311, and 441, is
amended by adding at the end the following:
``(o) The exercise of rights not subject to the stay
arising under subsection (a) pursuant to paragraph (6), (7),
(17), or (27) 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, 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
(C) by inserting ``or financial participant'' after ``swap
participant''; and
(2) by adding at the end the following:
``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B),
and 548(b) the trustee may not avoid a transfer made by or to
a master netting agreement participant under or in connection
with any master netting agreement or any individual contract
covered thereby that is made before the commencement of the
case, except under section 548(a)(1)(A) and except to the
extent that the trustee could otherwise avoid such a transfer
made under an individual contract covered by such master
netting agreement.''.
(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'' at the end;
(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 that, with respect to a
transfer under any individual contract covered thereby, to
the extent that such master netting agreement participant
otherwise did not take (or is otherwise not deemed to have
taken) such transfer for value.''.
(g) Termination or Acceleration of Securities Contracts.--
Section 555 of title 11, United States Code, is amended--
(1) by 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'';
(2) in the first sentence, by striking ``liquidation'' and
inserting ``liquidation, termination, or acceleration''; and
(3) in the second sentence, by striking ``As used'' and all
that follows through ``right,'' and inserting ``As used in
this section, the term `contractual right' includes a right
set forth in a rule or bylaw of a derivatives clearing
organization (as defined in the Commodity Exchange Act), a
multilateral clearing organization (as defined in the Federal
Deposit Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities
association, a securities clearing agency, a contract market
designated under the Commodity Exchange Act, a derivatives
transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the
Commodity Exchange Act) or in a resolution of the governing
board thereof and a right,''.
(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'';
(2) in the first sentence, by striking ``liquidation'' and
inserting ``liquidation, termination, or acceleration''; and
(3) in the third sentence, by striking ``As used'' and all
that follows through ``right,'' and inserting ``As used in
this section, the term `contractual right' includes a right
set forth in a rule or bylaw of a derivatives clearing
organization (as defined in the Commodity Exchange Act), a
multilateral clearing organization (as defined in the Federal
Deposit Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities
association, a securities clearing agency, a contract market
designated under the Commodity Exchange Act, a derivatives
transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the
Commodity Exchange Act) or in a resolution of the governing
board thereof and a right,''.
(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'';
(2) in the first sentence, by striking ``termination of a
swap agreement'' and inserting ``liquidation, termination, or
acceleration of one or more swap agreements'';
(3) by striking ``in connection with any swap agreement''
and inserting ``in connection with the termination,
liquidation, or acceleration of one or more swap
agreements''; and
(4) in the second sentence, by striking ``As used'' and all
that follows through ``right,'' and inserting ``As used in
this section, the term `contractual right' includes a right
set forth in a rule or bylaw of a derivatives clearing
organization (as defined in the Commodity Exchange Act), a
multilateral clearing organization (as defined in the Federal
Deposit Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities
association, a securities clearing agency, a contract market
designated under the Commodity Exchange Act, a derivatives
transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the
Commodity Exchange Act) or in a resolution of the governing
board thereof and a right,''.
(k) Liquidation, Termination, Acceleration, or Offset Under
a Master Netting Agreement and Across Contracts.--
(1) In general.--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; proceedings under chapter 15
``(a) Subject to subsection (b), the exercise of any
contractual right, because of a condition of the kind
specified in section 365(e)(1), to cause the termination,
liquidation, or acceleration of or to offset or net
termination values, payment amounts, or other transfer
obligations arising under or in connection with one or more
(or the termination, liquidation, or acceleration of one or
more)--
``(1) securities contracts, as defined in section 741(7);
``(2) commodity contracts, as defined in section 761(4);
``(3) forward contracts;
``(4) repurchase agreements;
``(5) swap agreements; or
``(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by
operation of any provision of this title or by any order of a
court or administrative agency in any proceeding under this
title.
``(b)(1) A party may exercise a contractual right described
in subsection (a) to terminate, liquidate, or accelerate only
to the extent that such party could exercise such a right
under section 555, 556, 559, or 560 for each individual
contract covered by the master netting agreement in issue.
``(2) If a debtor is a commodity broker subject to
subchapter IV of chapter 7--
``(A) a party may not net or offset an obligation to the
debtor arising under, or in connection with, a commodity
contract traded on or subject to the rules of a contract
market designated under the Commodity Exchange Act or a
derivatives transaction execution facility registered under
the Commodity Exchange Act against any claim arising under,
or in connection with, other instruments, contracts, or
agreements listed in subsection (a) except to the extent that
the party has positive net equity in the commodity accounts
at the debtor, as calculated under such subchapter; 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 and traded
[[Page S812]]
on or subject to the rules of a contract market designated
under the Commodity Exchange Act or a derivatives transaction
execution facility registered under the Commodity Exchange
Act against any claim arising under, or in connection with,
other instruments, contracts, or agreements listed in
subsection (a).
``(3) No provision of subparagraph (A) or (B) of paragraph
(2) shall prohibit the offset of claims and obligations that
arise under--
``(A) a cross-margining agreement or similar arrangement
that has been approved by the Commodity Futures Trading
Commission or submitted to the Commodity Futures Trading
Commission under paragraph (1) or (2) of section 5c(c) of the
Commodity Exchange Act and has not been abrogated or rendered
ineffective by the Commodity Futures Trading Commission; or
``(B) any other netting agreement between a clearing
organization (as defined in section 761) and another entity
that has been approved by the Commodity Futures Trading
Commission.
``(c) As used in this section, the term `contractual right'
includes a right set forth in a rule or bylaw of a
derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing organization
(as defined in the Federal Deposit Insurance Corporation
Improvement Act of 1991), a national securities exchange, a
national securities association, a securities clearing
agency, a contract market designated under the Commodity
Exchange Act, a derivatives transaction execution facility
registered under the Commodity Exchange Act, or a board of
trade (as defined in the Commodity Exchange Act) 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.
``(d) Any provisions of this title relating to securities
contracts, commodity contracts, forward contracts, repurchase
agreements, swap agreements, or master netting agreements
shall apply in a case under chapter 15, 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).''.
(2) 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 560 the
following:
``561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts;
proceedings under chapter 15.''.
(l) 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, financial participants, 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, financial
participant, 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.''.
(m) 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, financial participants, 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, financial
participant, 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) Setoff.--Section 553 of title 11, United States Code,
is amended--
(1) in subsection (a)(2)(B)(ii), by inserting before the
semicolon the following: ``(except for a setoff of a kind
described in section 362(b)(6), 362(b)(7), 362(b)(17),
362(b)(27), 555, 556, 559, 560, or 561)'';
(2) in subsection (a)(3)(C), by inserting before the period
the following: ``(except for a setoff of a kind described in
section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555,
556, 559, 560, or 561)''; and
(3) in subsection (b)(1), by striking ``362(b)(14),'' and
inserting ``362(b)(17), 362(b)(27), 555, 556, 559, 560,
561,''.
(o) 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 sections 362(b)(7) and 546(f), by inserting ``or
financial participant'' after ``repo participant'' each place
such term appears;
(3) in section 546(e), by inserting ``financial
participant,'' after ``financial institution,'';
(4) in section 548(d)(2)(B), by inserting ``financial
participant,'' after ``financial institution,'';
(5) in section 548(d)(2)(C), by inserting ``or financial
participant'' after ``repo participant'';
(6) in section 548(d)(2)(D), by inserting ``or financial
participant'' after ``swap participant'';
(7) in section 555--
(A) by inserting ``financial participant,'' after
``financial institution,''; and
(B) by striking the second sentence and inserting the
following: ``As used in this section, the term `contractual
right' includes a right set forth in a rule or bylaw of a
derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing organization
(as defined in the Federal Deposit Insurance Corporation
Improvement Act of 1991), a national securities exchange, a
national securities association, a securities clearing
agency, a contract market designated under the Commodity
Exchange Act, a derivatives transaction execution facility
registered under the Commodity Exchange Act, or a board of
trade (as defined in the Commodity Exchange Act), 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.'';
(8) in section 556, by inserting ``, financial
participant,'' after ``commodity broker'';
(9) in section 559, by inserting ``or financial
participant'' after ``repo participant'' each place such term
appears; and
(10) in section 560, by inserting ``or financial
participant'' after ``swap participant''.
(p) Conforming Amendments.--Title 11, United States Code,
is amended--
(1) in the table of sections for 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 for chapter 7--
(A) by inserting after the item relating to section 766 the
following:
``767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions,
financial participants, 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,
financial participants, securities clearing agencies,
swap participants, repo participants, and master netting
agreement participants.''.
SEC. 908. RECORDKEEPING REQUIREMENTS.
(a) FDIC-Insured Depository Institutions.--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 by any insured depository institution with
respect to qualified financial contracts (including market
valuations) only if such insured depository institution is in
a troubled condition (as such term is defined by the
Corporation pursuant to section 32).''.
(b) Insured Credit Unions.--Section 207(c)(8) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is amended by
adding at the end the following new subparagraph:
``(H) Recordkeeping requirements.--The Board, in
consultation with the appropriate Federal banking agencies,
may prescribe regulations requiring more detailed
recordkeeping by any insured credit union with respect to
qualified financial contracts (including market valuations)
only if such insured credit union is in a troubled condition
(as such term is defined by the Board pursuant to section
212).''.
SEC. 909. 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
[[Page S813]]
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) one 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. 910. DAMAGE MEASURE.
(a) In General.--Title 11, United States Code, is amended--
(1) by inserting after section 561, as added by section
907, the following:
``Sec. 562. Timing of damage measurement in connection with
swap agreements, securities contracts, forward contracts,
commodity contracts, repurchase agreements, and master
netting agreements
``(a) If the trustee rejects a swap agreement, securities
contract (as defined in section 741), forward contract,
commodity contract (as defined in section 761), repurchase
agreement, or master netting agreement pursuant to section
365(a), or if a forward contract merchant, stockbroker,
financial institution, securities clearing agency, repo
participant, financial participant, master netting agreement
participant, or swap participant liquidates, terminates, or
accelerates such contract or agreement, damages shall be
measured as of the earlier of--
``(1) the date of such rejection; or
``(2) the date or dates of such liquidation, termination,
or acceleration.
``(b) If there are not any commercially reasonable
determinants of value as of any date referred to in paragraph
(1) or (2) of subsection (a), damages shall be measured as of
the earliest subsequent date or dates on which there are
commercially reasonable determinants of value.
``(c) For the purposes of subsection (b), if damages are
not measured as of the date or dates of rejection,
liquidation, termination, or acceleration, and the forward
contract merchant, stockbroker, financial institution,
securities clearing agency, repo participant, financial
participant, master netting agreement participant, or swap
participant or the trustee objects to the timing of the
measurement of damages--
``(1) the trustee, in the case of an objection by a forward
contract merchant, stockbroker, financial institution,
securities clearing agency, repo participant, financial
participant, master netting agreement participant, or swap
participant; or
``(2) the forward contract merchant, stockbroker, financial
institution, securities clearing agency, repo participant,
financial participant, master netting agreement participant,
or swap participant, in the case of an objection by the
trustee,
has the burden of proving that there were no commercially
reasonable determinants of value as of such date or dates.'';
and
(2) in the table of sections for chapter 5, by inserting
after the item relating to section 561 (as added by section
907) the following new item:
``562. Timing of damage measure in connection with swap agreements,
securities contracts, forward contracts, commodity
contracts, repurchase agreements, or master netting
agreements.''.
(b) Claims Arising From Rejection.--Section 502(g) of title
11, United States Code, is amended--
(1) by inserting ``(1)'' after ``(g)''; and
(2) by adding at the end the following:
``(2) A claim for damages calculated in accordance with
section 562 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. 911. 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 at the
end 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 SIPC
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, as those terms are defined in sections 101, 741,
and 761 of title 11, United States Code, to offset or net
termination values, payment amounts, or other transfer
obligations arising under or in connection with one or more
of such contracts or agreements, or to foreclose on any cash
collateral pledged by the debtor, whether or not with respect
to one 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, or
disposition of, securities collateral pledged by the debtor,
whether or not with respect to one 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 subparagraph, 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.''.
TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.
(a) Reenactment.--
(1) In general.--Chapter 12 of title 11, United States
Code, as reenacted by section 149 of division C of the
Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999 (Public Law 105-277), and as in
effect on June 30, 2005, is hereby reenacted.
(2) Effective date of reenactment.--Paragraph (1) shall
take effect on July 1, 2005.
(b) Amendments--Chapter 12 of title 11, United States Code,
as reenacted by subsection (a), is amended by this Act.
(c) Conforming Amendment.--Section 302 of the Bankruptcy
Judges, United States Trustees, and Family Farmer Bankruptcy
Act of 1986 (28 U.S.C. 581 note) is amended by striking
subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, as amended
by section 226, is amended by inserting ``101(18),'' after
``101(3),'' each place it appears.
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.
(a) Contents of Plan.--Section 1222(a)(2) of title 11,
United States Code, as amended by section 213, 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;''.
(b) Special Notice Provisions.--Section 1231(b) of title
11, United States Code, as so designated by section 719, is
amended by striking ``a State or local governmental unit''
and inserting ``any governmental unit''.
(c) Effective Date; Application of Amendments.--This
section and the amendments made by this section shall take
effect on the date of the enactment of this Act and shall not
apply with respect to cases commenced under title 11 of the
United States Code before such date.
SEC. 1004. 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
``$3,237,000''; and
(B) by striking ``80'' and inserting ``50''; and
(2) in subparagraph (B)(ii)--
(A) by striking ``$1,500,000'' and inserting
``$3,237,000''; and
(B) by striking ``80'' and inserting ``50''.
SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND
SPOUSE RECEIVE OVER 50 PERCENT OF INCOME FROM
FARMING OPERATION IN YEAR PRIOR TO BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is
amended by striking ``for the taxable year preceding the
taxable year'' and inserting the following:
``for--
``(i) the taxable year preceding; or
``(ii) each of the 2d and 3d taxable years preceding;
the taxable year''.
SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF
DISPOSABLE INCOME.
(a) Confirmation of Plan.--Section 1225(b)(1) 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 value of the property to be distributed under the
plan in the 3-year period, or such longer period as the court
may approve under section 1222(c), beginning on the date that
the first distribution is due under the plan is not less than
the debtor's projected disposable income for such period.''.
(b) Modification of Plan.--Section 1229 of title 11, United
States Code, is amended by adding at the end the following:
``(d) A plan may not be modified under this section--
``(1) to increase the amount of any payment due before the
plan as modified becomes the plan;
``(2) by anyone except the debtor, based on an increase in
the debtor's disposable income, to increase the amount of
payments to unsecured creditors required for a particular
month so that the aggregate of such payments exceeds the
debtor's disposable income for such month; or
``(3) in the last year of the plan by anyone except the
debtor, to require payments that would leave the debtor with
insufficient
[[Page S814]]
funds to carry on the farming operation after the plan is
completed.''.
SEC. 1007. FAMILY FISHERMEN.
(a) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by inserting after paragraph (7) the following:
``(7A) `commercial fishing operation' means--
``(A) the catching or harvesting of fish, shrimp, lobsters,
urchins, seaweed, shellfish, or other aquatic species or
products of such species; or
``(B) for purposes of section 109 and chapter 12,
aquaculture activities consisting of raising for market any
species or product described in subparagraph (A);
``(7B) `commercial fishing vessel' means a vessel used by a
family fisherman to carry out a commercial fishing
operation;''; and
(2) by inserting after paragraph (19) the following:
``(19A) `family fisherman' means--
``(A) an individual or individual and spouse engaged in a
commercial fishing operation--
``(i) whose aggregate debts do not exceed $1,500,000 and
not less than 80 percent of whose aggregate noncontingent,
liquidated debts (excluding a debt for the principal
residence of such individual or such individual and spouse,
unless such debt arises out of a commercial fishing
operation), on the date the case is filed, arise out of a
commercial fishing operation owned or operated by such
individual or such individual and spouse; and
``(ii) who receive from such commercial fishing operation
more than 50 percent of such individual's or such
individual's and spouse's gross income for the taxable year
preceding the taxable year in which the case concerning such
individual or such individual and spouse was filed; or
``(B) a corporation or partnership--
``(i) in which more than 50 percent of the outstanding
stock or equity is held by--
``(I) 1 family that conducts the commercial fishing
operation; or
``(II) 1 family and the relatives of the members of such
family, and such family or such relatives conduct the
commercial fishing operation; and
``(ii)(I) more than 80 percent of the value of its assets
consists of assets related to the commercial fishing
operation;
``(II) its aggregate debts do not exceed $1,500,000 and not
less than 80 percent of its aggregate noncontingent,
liquidated debts (excluding a debt for 1 dwelling which is
owned by such corporation or partnership and which a
shareholder or partner maintains as a principal residence,
unless such debt arises out of a commercial fishing
operation), on the date the case is filed, arise out of a
commercial fishing operation owned or operated by such
corporation or such partnership; and
``(III) if such corporation issues stock, such stock is not
publicly traded;
``(19B) `family fisherman with regular annual income' means
a family fisherman whose annual income is sufficiently stable
and regular to enable such family fisherman to make payments
under a plan under chapter 12 of this title;''.
(b) Who May Be a Debtor.--Section 109(f) of title 11,
United States Code, is amended by inserting ``or family
fisherman'' after ``family farmer''.
(c) Chapter 12.--Chapter 12 of title 11, United States
Code, is amended--
(1) in the chapter heading, by inserting ``OR FISHERMAN''
after ``FAMILY FARMER'';
(2) in section 1203, by inserting ``or commercial fishing
operation'' after ``farm''; and
(3) in section 1206, by striking ``if the property is
farmland or farm equipment'' and inserting ``if the property
is farmland, farm equipment, or property used to carry out a
commercial fishing operation (including a commercial fishing
vessel)''.
(d) Clerical Amendment.--In the table of chapters for title
11, United States Code, the item relating to chapter 12, is
amended to read as follows:
``12. Adjustments of Debts of a Family Farmer or Family Fisherman with
Regular Annual Income...................................1201''.....
(e) Applicability.--Nothing in this section shall change,
affect, or amend the Fishery Conservation and Management Act
of 1976 (16 U.S.C. 1801 et seq.).
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) Health Care Business Defined.--Section 101 of title 11,
United States Code, as amended by section 306, is amended--
(1) by redesignating paragraph (27A) as paragraph (27B);
and
(2) by inserting after paragraph (27) the following:
``(27A) `health care business'--
``(A) means any public or private entity (without regard to
whether that entity is organized for profit or not for
profit) that is primarily engaged in offering to the general
public facilities and services for--
``(i) the diagnosis or treatment of injury, deformity, or
disease; and
``(ii) surgical, drug treatment, psychiatric, or obstetric
care; and
``(B) includes--
``(i) any--
``(I) general or specialized hospital;
``(II) ancillary ambulatory, emergency, or surgical
treatment facility;
``(III) hospice;
``(IV) home health agency; and
``(V) other health care institution that is similar to an
entity referred to in subclause (I), (II), (III), or (IV);
and
``(ii) any long-term care facility, including any--
``(I) skilled nursing facility;
``(II) intermediate care facility;
``(III) assisted living facility;
``(IV) home for the aged;
``(V) domiciliary care facility; and
``(VI) health care institution that is related to a
facility referred to in subclause (I), (II), (III), (IV), or
(V), if that institution is primarily engaged in offering
room, board, laundry, or personal assistance with activities
of daily living and incidentals to activities of daily
living;''.
(b) Patient and Patient Records Defined.--Section 101 of
title 11, United States Code, is amended by inserting after
paragraph (40) the following:
``(40A) `patient' means any individual who obtains or
receives services from a health care business;
``(40B) `patient records' means any written document
relating to a patient or a record recorded in a magnetic,
optical, or other form of electronic medium;''.
(c) Rule of Construction.--The amendments made by
subsection (a) of this section shall not affect the
interpretation of section 109(b) of title 11, United States
Code.
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) In General.--Subchapter III of chapter 3 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 351. Disposal of patient records
``If a health care business commences a case under chapter
7, 9, or 11, and the trustee does not have a sufficient
amount of funds to pay for the storage of patient records in
the manner required under applicable Federal or State law,
the following requirements shall apply:
``(1) The trustee shall--
``(A) promptly publish notice, in 1 or more appropriate
newspapers, that if patient records are not claimed by the
patient or an insurance provider (if applicable law permits
the insurance provider to make that claim) by the date that
is 365 days after the date of that notification, the trustee
will destroy the patient records; and
``(B) during the first 180 days of the 365-day period
described in subparagraph (A), promptly attempt to notify
directly each patient that is the subject of the patient
records and appropriate insurance carrier concerning the
patient records by mailing to the most recent known address
of that patient, or a family member or contact person for
that patient, and to the appropriate insurance carrier an
appropriate notice regarding the claiming or disposing of
patient records.
``(2) If, after providing the notification under paragraph
(1), patient records are not claimed during the 365-day
period described under that paragraph, the trustee shall
mail, by certified mail, at the end of such 365-day period a
written request to each appropriate Federal agency to request
permission from that agency to deposit the patient records
with that agency, except that no Federal agency is required
to accept patient records under this paragraph.
``(3) If, following the 365-day period described in
paragraph (2) and after providing the notification under
paragraph (1), patient records are not claimed by a patient
or insurance provider, or request is not granted by a Federal
agency to deposit such records with that agency, the trustee
shall destroy those records by--
``(A) if the records are written, shredding or burning the
records; or
``(B) if the records are magnetic, optical, or other
electronic records, by otherwise destroying those records so
that those records cannot be retrieved.''.
(b) Clerical Amendment.--The table of sections for
subchapter III of chapter 3 of title 11, United States Code,
is amended by adding at the end the following:
``351. Disposal of patient records.''.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING
A HEALTH CARE BUSINESS AND OTHER ADMINISTRATIVE
EXPENSES.
Section 503(b) of title 11, United States Code, as amended
by section 445, is amended by adding at the end the
following:
``(8) the actual, necessary costs and expenses of closing a
health care business incurred by a trustee or by a Federal
agency (as defined in section 551(1) of title 5) or a
department or agency of a State or political subdivision
thereof, including any cost or expense incurred--
``(A) in disposing of patient records in accordance with
section 351; or
``(B) in connection with transferring patients from the
health care business that is in the process of being closed
to another health care business; and''.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT
ADVOCATE.
(a) Ombudsman To Act as Patient Advocate.--
(1) Appointment of ombudsman.--Title 11, United States
Code, as amended by section 232, is amended by inserting
after section 332 the following:
``Sec. 333. Appointment of patient care ombudsman
``(a)(1) If the debtor in a case under chapter 7, 9, or 11
is a health care business, the court shall order, not later
than 30 days after the commencement of the case, the
appointment of an ombudsman to monitor the quality of patient
care and to represent the interests of
[[Page S815]]
the patients of the health care business unless the court
finds that the appointment of such ombudsman is not necessary
for the protection of patients under the specific facts of
the case.
``(2)(A) If the court orders the appointment of an
ombudsman under paragraph (1), the United States trustee
shall appoint 1 disinterested person (other than the United
States trustee) to serve as such ombudsman.
``(B) If the debtor is a health care business that provides
long-term care, then the United States trustee may appoint
the State Long-Term Care Ombudsman appointed under the Older
Americans Act of 1965 for the State in which the case is
pending to serve as the ombudsman required by paragraph (1).
``(C) If the United States trustee does not appoint a State
Long-Term Care Ombudsman under subparagraph (B), the court
shall notify the State Long-Term Care Ombudsman appointed
under the Older Americans Act of 1965 for the State in which
the case is pending, of the name and address of the person
who is appointed under subparagraph (A).
``(b) An ombudsman appointed under subsection (a) shall--
``(1) monitor the quality of patient care provided to
patients of the debtor, to the extent necessary under the
circumstances, including interviewing patients and
physicians;
``(2) not later than 60 days after the date of appointment,
and not less frequently than at 60-day intervals thereafter,
report to the court after notice to the parties in interest,
at a hearing or in writing, regarding the quality of patient
care provided to patients of the debtor; and
``(3) if such ombudsman determines that the quality of
patient care provided to patients of the debtor is declining
significantly or is otherwise being materially compromised,
file with the court a motion or a written report, with notice
to the parties in interest immediately upon making such
determination.
``(c)(1) An ombudsman appointed under subsection (a) shall
maintain any information obtained by such ombudsman under
this section that relates to patients (including information
relating to patient records) as confidential information.
Such ombudsman may not review confidential patient records
unless the court approves such review in advance and imposes
restrictions on such ombudsman to protect the confidentiality
of such records.
``(2) An ombudsman appointed under subsection (a)(2)(B)
shall have access to patient records consistent with
authority of such ombudsman under the Older Americans Act of
1965 and under non-Federal laws governing the State Long-Term
Care Ombudsman program.''.
(2) Clerical amendment.--The table of sections for
subchapter II of chapter 3 of title 11, United States Code,
as amended by section 232, is amended by adding at the end
the following:
``333. Appointment of ombudsman.''.
(b) Compensation of Ombudsman.--Section 330(a)(1) of title
11, United States Code, is amended--
(1) in the matter preceding subparagraph (A), by inserting
``an ombudsman appointed under section 333, or'' before ``a
professional person''; and
(2) in subparagraph (A), by inserting ``ombudsman,'' before
``professional person''.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER
PATIENTS.
(a) In General.--Section 704(a) of title 11, United States
Code, as amended by sections 102, 219, and 446, is amended by
adding at the end the following:
``(12) use all reasonable and best efforts to transfer
patients from a health care business that is in the process
of being closed to an appropriate health care business that--
``(A) is in the vicinity of the health care business that
is closing;
``(B) provides the patient with services that are
substantially similar to those provided by the health care
business that is in the process of being closed; and
``(C) maintains a reasonable quality of care.''.
(b) Conforming Amendment.--Section 1106(a)(1) of title 11,
United States Code, as amended by section 446, is amended by
striking ``and (11)'' and inserting ``(11), and (12)''.
SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION NOT SUBJECT
TO AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, is amended
by inserting after paragraph (27), as amended by sections
224, 303, 311, 401, 718, and 907, the following:
``(28) under subsection (a), of the exclusion by the
Secretary of Health and Human Services of the debtor from
participation in the medicare program or any other Federal
health care program (as defined in section 1128B(f) of the
Social Security Act pursuant to title XI or XVIII of such
Act).''.
TITLE XII--TECHNICAL AMENDMENTS
SEC. 1201. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by
this Act, is further amended--
(1) by striking ``In this title--'' and inserting ``In this
title the following definitions shall apply:'';
(2) in each paragraph (other than paragraph (54A)), 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), (38), and (54A), 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 and inserting a
semicolon;
(6) by striking paragraph (54) and inserting the following:
``(54) The term `transfer' means--
``(A) the creation of a lien;
``(B) the retention of title as a security interest;
``(C) the foreclosure of a debtor's equity of redemption;
or
``(D) each mode, direct or indirect, absolute or
conditional, voluntary or involuntary, of disposing of or
parting with--
``(i) property; or
``(ii) an interest in property;'';
(7) in paragraph (54A)--
(A) by striking ``the term'' and inserting ``The term'';
and
(B) by indenting the left margin of paragraph (54A) 2 ems
to the right; and
(8) in each of paragraphs (1) through (35), in each of
paragraphs (36), (37), (38A), (38B) and (39A), and in each of
paragraphs (40) through (55), by striking the semicolon at
the end and inserting a period.
SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, is amended by
inserting ``522(f)(3),'' after ``522(d),'' each place it
appears.
SEC. 1203. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is
amended by striking ``922'' and all that follows through
``or'', and inserting ``922, 1201, or''.
SEC. 1204. TECHNICAL AMENDMENTS.
Title 11, 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. 1205. PENALTY FOR PERSONS WHO NEGLIGENTLY OR
FRAUDULENTLY PREPARE BANKRUPTCY PETITIONS.
Section 110(j)(4) of title 11, United States Code, as so
redesignated by section 221, is amended by striking
``attorney's'' and inserting ``attorneys' ''.
SEC. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL
PERSONS.
Section 328(a) of title 11, United States Code, is amended
by inserting ``on a fixed or percentage fee basis,'' after
``hourly basis,''.
SEC. 1207. 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. 1208. 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. 1209. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as amended by
sections 215 and 314, is amended--
(1) by transferring paragraph (15), as added by section
304(e) of Public Law 103-394 (108 Stat. 4133), so as to
insert such paragraph after subsection (a)(14A);
(2) in subsection (a)(9), by striking ``motor vehicle'' and
inserting ``motor vehicle, vessel, or aircraft''; and
(3) in subsection (e), by striking ``a insured'' and
inserting ``an insured''.
SEC. 1210. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is
amended by striking ``section 523'' and all that follows
through ``or that'' and inserting ``section 523, 1228(a)(1),
or 1328(a)(1), or that''.
SEC. 1211. 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. 1212. 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. 1213. PREFERENCES.
(a) In General.--Section 547 of title 11, United States
Code, as amended by section 201, 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 shall be considered to be avoided under this
section only with respect to the creditor that is an
insider.''.
(b) Applicability.--The amendments made by this section
shall apply to any case that is pending or commenced on or
after the date of enactment of this Act.
SEC. 1214. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is
amended--
(1) by inserting ``an interest in'' after ``transfer of''
each place it appears;
[[Page S816]]
(2) by striking ``such property'' and inserting ``such real
property''; and
(3) by striking ``the interest'' and inserting ``such
interest''.
SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended
by striking ``1009,''.
SEC. 1216. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, is amended
by inserting ``1123(d),'' after ``1123(b),''.
SEC. 1217. 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. 1218. 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. 1219. 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. 1220. 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. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE
CORPORATIONS.
(a) Sale of Property of Estate.--Section 363(d) of title
11, United States Code, is amended by striking ``only'' and
all that follows through the end of the subsection and
inserting ``only--
``(1) in accordance with applicable nonbankruptcy law that
governs the transfer of property by a corporation or trust
that is not a moneyed, business, or commercial corporation or
trust; and
``(2) to the extent not inconsistent with any relief
granted under subsection (c), (d), (e), or (f) of section
362.''.
(b) Confirmation of Plan of Reorganization.--Section
1129(a) of title 11, United States Code, as amended by
sections 213 and 321, is amended by adding at the end the
following:
``(16) 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 225, 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, or filed under
that title on or after that date of enactment, except that
the court shall not confirm a plan under chapter 11 of title
11, United States Code, 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 filing of the petition. The parties who
may appear and be heard in a proceeding under this section
include the attorney general of the State in which the debtor
is incorporated, was formed, or does business.
(e) Rule of Construction.--Nothing in this section shall be
construed to require the court in which a case under chapter
11 of title 11, United States Code, 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. 1222. 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. 1223. BANKRUPTCY JUDGESHIPS.
(a) Short Title.--This section may be cited as the
``Bankruptcy Judgeship Act of 2005''.
(b) Temporary Judgeships.--
(1) Appointments.--The following bankruptcy judges shall be
appointed 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 judge for the eastern
district of California.
(B) Three additional bankruptcy judges for the central
district of California.
(C) Four additional bankruptcy judges for the district of
Delaware.
(D) Two additional bankruptcy judges for the southern
district of Florida.
(E) One additional bankruptcy judge for the southern
district of Georgia.
(F) Three additional bankruptcy judges for the district of
Maryland.
(G) One additional bankruptcy judge for the eastern
district of Michigan.
(H) One additional bankruptcy judge for the southern
district of Mississippi.
(I) One additional bankruptcy judge for the district of New
Jersey.
(J) One additional bankruptcy judge for the eastern
district of New York.
(K) One additional bankruptcy judge for the northern
district of New York.
(L) One additional bankruptcy judge for the southern
district of New York.
(M) One additional bankruptcy judge for the eastern
district of North Carolina.
(N) One additional bankruptcy judge for the eastern
district of Pennsylvania.
(O) One additional bankruptcy judge for the middle district
of Pennsylvania.
(P) One additional bankruptcy judge for the district of
Puerto Rico.
(Q) One additional bankruptcy judge for the western
district of Tennessee.
(R) One additional bankruptcy judge for the eastern
district of Virginia.
(S) One additional bankruptcy judge for the district of
South Carolina.
(T) One additional bankruptcy judge for the district of
Nevada.
(2) Vacancies.--
(A) Districts with single appointments.--Except as provided
in subparagraphs (B), (C), (D), and (E), the first vacancy
occurring in the office of bankruptcy judge in each of the
judicial districts set forth in paragraph (1)--
(i) occurring 5 years or more after the appointment date of
the bankruptcy judge appointed under paragraph (1) to such
office; and
(ii) resulting from the death, retirement, resignation, or
removal of a bankruptcy judge;
shall not be filled.
(B) Central district of california.--The 1st, 2d, and 3d
vacancies in the office of bankruptcy judge in the central
district of California--
(i) occurring 5 years or more after the respective 1st, 2d,
and 3d appointment dates of the bankruptcy judges appointed
under paragraph (1)(B); and
(ii) resulting from the death, retirement, resignation, or
removal of a bankruptcy judge;
shall not be filled.
(C) District of delaware.--The 1st, 2d, 3d, and 4th
vacancies in the office of bankruptcy judge in the district
of Delaware--
(i) occurring 5 years or more after the respective 1st, 2d,
3d, and 4th appointment dates of the bankruptcy judges
appointed under paragraph (1)(F); and
(ii) resulting from the death, retirement, resignation, or
removal of a bankruptcy judge;
shall not be filled.
(D) Southern district of florida.--The 1st and 2d vacancies
in the office of bankruptcy judge in the southern district of
Florida--
(i) occurring 5 years or more after the respective 1st and
2d appointment dates of the bankruptcy judges appointed under
paragraph (1)(D); and
(ii) resulting from the death, retirement, resignation, or
removal of a bankruptcy judge;
shall not be filled.
(E) District of maryland.--The 1st, 2d, and 3d vacancies in
the office of bankruptcy judge in the district of Maryland--
(i) occurring 5 years or more after the respective 1st, 2d,
and 3d appointment dates of the bankruptcy judges appointed
under paragraph (1)(F); and
(ii) resulting from the death, retirement, resignation, or
removal of a bankruptcy judge;
shall not be filled.
(c) Extensions.--
(1) In general.--The temporary office of bankruptcy judges
authorized for the northern district of Alabama, the district
of Delaware, the district of Puerto Rico, and the eastern
district of Tennessee under paragraphs (1), (3), (7), and (9)
of section 3(a) 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 5
years after the date of the enactment of this Act.
(2) Applicability of other provisions.--All other
provisions of section 3 of the Bankruptcy Judgeship Act of
1992 (28 U.S.C. 152 note) remain applicable to the temporary
office of bankruptcy judges referred to in this subsection.
(d) Technical Amendments.--Section 152(a) of title 28,
United States Code, is amended--
(1) in paragraph (1), by striking the first sentence and
inserting the following: ``Each bankruptcy judge to be
appointed for a judicial district, as provided in paragraph
(2), shall be appointed by the court of appeals of the United
States for the circuit in which such district is located.'';
and
(2) in paragraph (2)--
(A) in the item relating to the middle district of Georgia,
by striking ``2'' and inserting ``3''; and
(B) in the collective item relating to the middle and
southern districts of Georgia, by striking ``Middle and
Southern . . . . . . 1''.
[[Page S817]]
(e) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 1224. COMPENSATING TRUSTEES.
Section 1326 of title 11, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking ``and'';
(B) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(3) if a chapter 7 trustee has been allowed compensation
due to the conversion or dismissal of the debtor's prior case
pursuant to section 707(b), and some portion of that
compensation remains unpaid in a case converted to this
chapter or in the case dismissed under section 707(b) and
refiled under this chapter, the amount of any such unpaid
compensation, which shall be paid monthly--
``(A) by prorating such amount over the remaining duration
of the plan; and
``(B) by monthly payments not to exceed the greater of--
``(i) $25; 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
(2) by adding at the end the following:
``(d) Notwithstanding any other provision of this title--
``(1) compensation referred to in subsection (b)(3) is
payable and may be collected by the trustee under that
paragraph, even if such amount has been discharged in a prior
case under this title; and
``(2) such compensation is payable in a case under this
chapter only to the extent permitted by subsection (b)(3).''.
SEC. 1225. AMENDMENT TO SECTION 362 OF TITLE 11, UNITED
STATES CODE.
Section 362(b)(18) of title 11, United States Code, is
amended to read as follows:
``(18) under subsection (a) of the creation or perfection
of a statutory lien for an ad valorem property tax, or a
special tax or special assessment on real property whether or
not ad valorem, imposed by a governmental unit, if such tax
or assessment comes due after the date of the filing of the
petition;''.
SEC. 1226. JUDICIAL EDUCATION.
The Director of the Federal Judicial Center, in
consultation with the Director of the Executive Office for
United States Trustees, shall develop materials and conduct
such training as may be useful to courts in implementing this
Act and the amendments made by this Act, including the
requirements relating to the means test under section 707(b),
and reaffirmation agreements under section 524, of title 11
of the United States Code, as amended by this Act.
SEC. 1227. RECLAMATION.
(a) Rights and Powers of the Trustee.--Section 546(c) of
title 11, United States Code, is amended to read as follows:
``(c)(1) Except as provided in subsection (d) of this
section and in section 507(c), and subject to the prior
rights of a holder of a security interest in such goods or
the proceeds thereof, the rights and powers of the trustee
under sections 544(a), 545, 547, and 549 are subject to the
right of a seller of goods that has sold goods to the debtor,
in the ordinary course of such seller's business, to reclaim
such goods if the debtor has received such goods while
insolvent, within 45 days before the date of the commencement
of a case under this title, but such seller may not reclaim
such goods unless such seller demands in writing reclamation
of such goods--
``(A) not later than 45 days after the date of receipt of
such goods by the debtor; or
``(B) not later than 20 days after the date of commencement
of the case, if the 45-day period expires after the
commencement of the case.
``(2) If a seller of goods fails to provide notice in the
manner described in paragraph (1), the seller still may
assert the rights contained in section 503(b)(9).''.
(b) Administrative Expenses.--Section 503(b) of title 11,
United States Code, as amended by sections 445 and 1103, is
amended by adding at the end the following:
``(9) the value of any goods received by the debtor within
20 days before the date of commencement of a case under this
title in which the goods have been sold to the debtor in the
ordinary course of such debtor's business.''.
SEC. 1228. PROVIDING REQUESTED TAX DOCUMENTS TO THE COURT.
(a) Chapter 7 Cases.--The court shall not grant a discharge
in the case of an individual who is a debtor in a case under
chapter 7 of title 11, United States Code, unless requested
tax documents have been provided to the court.
(b) Chapter 11 and Chapter 13 Cases.--The court shall not
confirm a plan of reorganization in the case of an individual
under chapter 11 or 13 of title 11, United States Code,
unless requested tax documents have been filed with the
court.
(c) Document Retention.--The court shall destroy documents
submitted in support of a bankruptcy claim not sooner than 3
years after the date of the conclusion of a case filed by an
individual under chapter 7, 11, or 13 of title 11, United
States Code. In the event of a pending audit or enforcement
action, the court may extend the time for destruction of such
requested tax documents.
SEC. 1229. ENCOURAGING CREDITWORTHINESS.
(a) Sense of the Congress.--It is the sense of the Congress
that--
(1) certain lenders may sometimes offer credit to consumers
indiscriminately, without taking steps to ensure that
consumers are capable of repaying the resulting debt, and in
a manner which may encourage certain consumers to accumulate
additional debt; and
(2) resulting consumer debt may increasingly be a major
contributing factor to consumer insolvency.
(b) Study Required.--The Board of Governors of the Federal
Reserve System (hereafter in this section referred to as the
``Board'') shall conduct a study of--
(1) consumer credit industry practices of soliciting and
extending credit--
(A) indiscriminately;
(B) without taking steps to ensure that consumers are
capable of repaying the resulting debt; and
(C) in a manner that encourages consumers to accumulate
additional debt; and
(2) the effects of such practices on consumer debt and
insolvency.
(c) Report and Regulations.--Not later than 12 months after
the date of enactment of this Act, the Board--
(1) shall make public a report on its findings with respect
to the indiscriminate solicitation and extension of credit by
the credit industry;
(2) may issue regulations that would require additional
disclosures to consumers; and
(3) may take any other actions, consistent with its
existing statutory authority, that the Board finds necessary
to ensure responsible industrywide practices and to prevent
resulting consumer debt and insolvency.
SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMPTION.
Section 541(b) of title 11, United States Code, as amended
by sections 225 and 323, is amended by adding after paragraph
(7), as added by section 323, the following:
``(8) subject to subchapter III of chapter 5, any interest
of the debtor in property where the debtor pledged or sold
tangible personal property (other than securities or written
or printed evidences of indebtedness or title) as collateral
for a loan or advance of money given by a person licensed
under law to make such loans or advances, where--
``(A) the tangible personal property is in the possession
of the pledgee or transferee;
``(B) the debtor has no obligation to repay the money,
redeem the collateral, or buy back the property at a
stipulated price; and
``(C) neither the debtor nor the trustee have exercised any
right to redeem provided under the contract or State law, in
a timely manner as provided under State law and section
108(b); or''.
SEC. 1231. 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, United States Code,
may obtain judicial review of the final agency decision by
commencing an action in the district court of the United
States for the district for which the panel to which the
trustee is appointed under subsection (a)(1), or in the
district court of the United States 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 district court of the United
States for 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.''.
SEC. 1232. BANKRUPTCY FORMS.
Section 2075 of title 28, United States Code, is amended by
adding at the end the following:
``The bankruptcy rules promulgated under this section shall
prescribe a form for the statement required under section
707(b)(2)(C) of title 11 and may provide general rules on the
content of such statement.''.
SEC. 1233. DIRECT APPEALS OF BANKRUPTCY MATTERS TO COURTS OF
APPEALS.
(a) Appeals.--Section 158 of title 28, United States Code,
is amended--
(1) in subsection (c)(1), by striking ``Subject to
subsection (b),'' and inserting ``Subject to subsections (b)
and (d)(2),''; and
(2) in subsection (d)--
[[Page S818]]
(A) by inserting ``(1)'' after ``(d)''; and
(B) by adding at the end the following:
``(2)(A) The appropriate court of appeals shall have
jurisdiction of appeals described in the first sentence of
subsection (a) if the bankruptcy court, the district court,
or the bankruptcy appellate panel involved, acting on its own
motion or on the request of a party to the judgment, order,
or decree described in such first sentence, or all the
appellants and appellees (if any) acting jointly, certify
that--
``(i) the judgment, order, or decree involves a question of
law as to which there is no controlling decision of the court
of appeals for the circuit or of the Supreme Court of the
United States, or involves a matter of public importance;
``(ii) the judgment, order, or decree involves a question
of law requiring resolution of conflicting decisions; or
``(iii) an immediate appeal from the judgment, order, or
decree may materially advance the progress of the case or
proceeding in which the appeal is taken;
and if the court of appeals authorizes the direct appeal of
the judgment, order, or decree.
``(B) If the bankruptcy court, the district court, or the
bankruptcy appellate panel--
``(i) on its own motion or on the request of a party,
determines that a circumstance specified in clause (i), (ii),
or (iii) of subparagraph (A) exists; or
``(ii) receives a request made by a majority of the
appellants and a majority of appellees (if any) to make the
certification described in subparagraph (A);
then the bankruptcy court, the district court, or the
bankruptcy appellate panel shall make the certification
described in subparagraph (A).
``(C) The parties may supplement the certification with a
short statement of the basis for the certification.
``(D) An appeal under this paragraph does not stay any
proceeding of the bankruptcy court, the district court, or
the bankruptcy appellate panel from which the appeal is
taken, unless the respective bankruptcy court, district
court, or bankruptcy appellate panel, or the court of appeals
in which the appeal in pending, issues a stay of such
proceeding pending the appeal.
``(E) Any request under subparagraph (B) for certification
shall be made not later than 60 days after the entry of the
judgment, order, or decree.''.
(b) Procedural Rules.--
(1) Temporary application.--A provision of this subsection
shall apply to appeals under section 158(d)(2) of title 28,
United States Code, until a rule of practice and procedure
relating to such provision and such appeals is promulgated or
amended under chapter 131 of such title.
(2) Certification.--A district court, a bankruptcy court,
or a bankruptcy appellate panel may make a certification
under section 158(d)(2) of title 28, United States Code, only
with respect to matters pending in the respective bankruptcy
court, district court, or bankruptcy appellate panel.
(3) Procedure.--Subject to any other provision of this
subsection, an appeal authorized by the court of appeals
under section 158(d)(2)(A) of title 28, United States Code,
shall be taken in the manner prescribed in subdivisions
(a)(1), (b), (c), and (d) of rule 5 of the Federal Rules of
Appellate Procedure. For purposes of subdivision (a)(1) of
rule 5--
(A) a reference in such subdivision to a district court
shall be deemed to include a reference to a bankruptcy court
and a bankruptcy appellate panel, as appropriate; and
(B) a reference in such subdivision to the parties
requesting permission to appeal to be served with the
petition shall be deemed to include a reference to the
parties to the judgment, order, or decree from which the
appeal is taken.
(4) Filing of petition with attachment.--A petition
requesting permission to appeal, that is based on a
certification made under subparagraph (A) or (B) of section
158(d)(2) shall--
(A) be filed with the circuit clerk not later than 10 days
after the certification is entered on the docket of the
bankruptcy court, the district court, or the bankruptcy
appellate panel from which the appeal is taken; and
(B) have attached a copy of such certification.
(5) References in rule 5.--For purposes of rule 5 of the
Federal Rules of Appellate Procedure--
(A) a reference in such rule to a district court shall be
deemed to include a reference to a bankruptcy court and to a
bankruptcy appellate panel; and
(B) a reference in such rule to a district clerk shall be
deemed to include a reference to a clerk of a bankruptcy
court and to a clerk of a bankruptcy appellate panel.
(6) Application of rules.--The Federal Rules of Appellate
Procedure shall apply in the courts of appeals with respect
to appeals authorized under section 158(d)(2)(A), to the
extent relevant and as if such appeals were taken from final
judgments, orders, or decrees of the district courts or
bankruptcy appellate panels exercising appellate jurisdiction
under subsection (a) or (b) of section 158 of title 28,
United States Code.
SEC. 1234. INVOLUNTARY CASES.
(a) Amendments.--Section 303 of title 11, United States
Code, is amended--
(1) in subsection (b)(1), by--
(A) inserting ``as to liability or amount'' after ``bona
fide dispute''; and
(B) striking ``if such claims'' and inserting ``if such
noncontingent, undisputed claims''; and
(2) in subsection (h)(1), by inserting ``as to liability or
amount'' before the semicolon at the end.
(b) Effective Date; Application of Amendments.--This
section and the amendments made by this section shall take
effect on the date of the enactment of this Act and shall
apply with respect to cases commenced under title 11 of the
United States Code before, on, and after such date.
SEC. 1235. FEDERAL ELECTION LAW FINES AND PENALTIES AS
NONDISCHARGEABLE DEBT.
Section 523(a) of title 11, United States Code, as amended
by section 314, is amended by inserting after paragraph (14A)
the following:
``(14B) incurred to pay fines or penalties imposed under
Federal election law;''.
TITLE XIII--CONSUMER CREDIT DISCLOSURE
SEC. 1301. ENHANCED DISCLOSURES UNDER AN OPEN END CREDIT
PLAN.
(a) 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)(A) In the case of an open end credit plan that
requires a minimum monthly payment of not more than 4 percent
of the balance on which finance charges are accruing, the
following statement, located on the front of the billing
statement, disclosed clearly and conspicuously: `Minimum
Payment Warning: Making only the minimum payment will
increase the interest you pay and the time it takes to repay
your balance. For example, making only the typical 2% minimum
monthly payment on a balance of $1,000 at an interest rate of
17% would take 88 months to repay the balance in full. For an
estimate of the time it would take to repay your balance,
making only minimum payments, call this toll-free number:
______.' (the blank space to be filled in by the creditor).
``(B) In the case of an open end credit plan that requires
a minimum monthly payment of more than 4 percent of the
balance on which finance charges are accruing, the following
statement, in a prominent location on the front of the
billing statement, disclosed clearly and conspicuously:
`Minimum Payment Warning: Making only the required minimum
payment will increase the interest you pay and the time it
takes to repay your balance. Making a typical 5% minimum
monthly payment on a balance of $300 at an interest rate of
17% would take 24 months to repay the balance in full. For an
estimate of the time it would take to repay your balance,
making only minimum monthly payments, call this toll-free
number: ______.' (the blank space to be filled in by the
creditor).
``(C) Notwithstanding subparagraphs (A) and (B), in the
case of a creditor with respect to which compliance with this
title is enforced by the Federal Trade Commission, the
following statement, in a prominent location on the front of
the billing statement, disclosed clearly and conspicuously:
`Minimum Payment Warning: Making only the required minimum
payment will increase the interest you pay and the time it
takes to repay your balance. For example, making only the
typical 5% minimum monthly payment on a balance of $300 at an
interest rate of 17% would take 24 months to repay the
balance in full. For an estimate of the time it would take to
repay your balance, making only minimum monthly payments,
call the Federal Trade Commission at this toll-free number:
______.' (the blank space to be filled in by the creditor). A
creditor who is subject to this subparagraph shall not be
subject to subparagraph (A) or (B).
``(D) Notwithstanding subparagraph (A), (B), or (C), in
complying with any such subparagraph, a creditor may
substitute an example based on an interest rate that is
greater than 17 percent. Any creditor that is subject to
subparagraph (B) may elect to provide the disclosure required
under subparagraph (A) in lieu of the disclosure required
under subparagraph (B).
``(E) The Board shall, by rule, periodically recalculate,
as necessary, the interest rate and repayment period under
subparagraphs (A), (B), and (C).
``(F)(i) The toll-free telephone number disclosed by a
creditor or the Federal Trade Commission under subparagraph
(A), (B), or (G), as appropriate, may be a toll-free
telephone number established and maintained by the creditor
or the Federal Trade Commission, as appropriate, or may be a
toll-free telephone number established and maintained by a
third party for use by the creditor or multiple creditors or
the Federal Trade Commission, as appropriate. The toll-free
telephone number may connect consumers to an automated device
through which consumers may obtain information described in
subparagraph (A), (B), or (C), by inputting information using
a touch-tone telephone or similar device, if consumers whose
telephones are not equipped to use such automated device are
provided the opportunity to be connected to an individual
from whom the information described in subparagraph (A), (B),
or (C), as applicable, may be obtained. A person that
receives a request for information described in subparagraph
(A), (B), or (C) from an obligor through the toll-free
telephone number disclosed under subparagraph (A), (B), or
(C), as applicable, shall disclose in response to such
request only the information set forth in the table
[[Page S819]]
promulgated by the Board under subparagraph (H)(i).
``(ii)(I) The Board shall establish and maintain for a
period not to exceed 24 months following the effective date
of the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005, a toll-free telephone number, or provide a toll-
free telephone number established and maintained by a third
party, for use by creditors that are depository institutions
(as defined in section 3 of the Federal Deposit Insurance
Act), including a Federal credit union or State credit union
(as defined in section 101 of the Federal Credit Union Act),
with total assets not exceeding $250,000,000. The toll-free
telephone number may connect consumers to an automated device
through which consumers may obtain information described in
subparagraph (A) or (B), as applicable, by inputting
information using a touch-tone telephone or similar device,
if consumers whose telephones are not equipped to use such
automated device are provided the opportunity to be connected
to an individual from whom the information described in
subparagraph (A) or (B), as applicable, may be obtained. A
person that receives a request for information described in
subparagraph (A) or (B) from an obligor through the toll-free
telephone number disclosed under subparagraph (A) or (B), as
applicable, shall disclose in response to such request only
the information set forth in the table promulgated by the
Board under subparagraph (H)(i). The dollar amount contained
in this subclause shall be adjusted according to an indexing
mechanism established by the Board.
``(II) Not later than 6 months prior to the expiration of
the 24-month period referenced in subclause (I), the Board
shall submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives a report on the program
described in subclause (I).
``(G) The Federal Trade Commission shall establish and
maintain a toll-free number for the purpose of providing to
consumers the information required to be disclosed under
subparagraph (C).
``(H) The Board shall--
``(i) establish a detailed table illustrating the
approximate number of months that it would take to repay an
outstanding balance if a consumer pays only the required
minimum monthly payments and if no other advances are made,
which table shall clearly present standardized information to
be used to disclose the information required to be disclosed
under subparagraph (A), (B), or (C), as applicable;
``(ii) establish the table required under clause (i) by
assuming--
``(I) a significant number of different annual percentage
rates;
``(II) a significant number of different account balances;
``(III) a significant number of different minimum payment
amounts; and
``(IV) that only minimum monthly payments are made and no
additional extensions of credit are obtained; and
``(iii) promulgate regulations that provide instructional
guidance regarding the manner in which the information
contained in the table established under clause (i) should be
used in responding to the request of an obligor for any
information required to be disclosed under subparagraph (A),
(B), or (C).
``(I) The disclosure requirements of this paragraph do not
apply to any charge card account, the primary purpose of
which is to require payment of charges in full each month.
``(J) A creditor that maintains a toll-free telephone
number for the purpose of providing customers with the actual
number of months that it will take to repay the customer's
outstanding balance is not subject to the requirements of
subparagraph (A) or (B).
``(K) A creditor that maintains a toll-free telephone
number for the purpose of providing customers with the actual
number of months that it will take to repay an outstanding
balance shall include the following statement on each billing
statement: `Making only the minimum payment will increase the
interest you pay and the time it takes to repay your balance.
For more information, call this toll-free number: ____.' (the
blank space to be filled in by the creditor).''.
(b) Regulatory Implementation.--
(1) In general.--The Board of Governors of the Federal
Reserve System (hereafter in this title referred to as the
``Board'') shall promulgate regulations implementing the
requirements of section 127(b)(11) of the Truth in Lending
Act, as added by subsection (a) of this section.
(2) Effective date.--Section 127(b)(11) of the Truth in
Lending Act, as added by subsection (a) of this section, and
the regulations issued under paragraph (1) of this subsection
shall not take effect until the later of--
(A) 18 months after the date of enactment of this Act; or
(B) 12 months after the publication of such final
regulations by the Board.
(c) Study of Financial Disclosures.--
(1) In general.--The Board may conduct a study to determine
the types of information available to potential borrowers
from consumer credit lending institutions regarding factors
qualifying potential borrowers for credit, repayment
requirements, and the consequences of default.
(2) Factors for consideration.--In conducting a study under
paragraph (1), the Board should, in consultation with the
other Federal banking agencies (as defined in section 3 of
the Federal Deposit Insurance Act), the National Credit Union
Administration, and the Federal Trade Commission, consider
the extent to which--
(A) 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;
(B) minimum periodic payment features offered in connection
with open end credit plans impact consumer default rates;
(C) consumers make only the required minimum payment under
open end credit plans;
(D) consumers are aware that making only required minimum
payments will increase the cost and repayment period of an
open end credit obligation; and
(E) the availability of low minimum payment options is a
cause of consumers experiencing financial difficulty.
(3) Report to congress.--Findings of the Board in
connection with any study conducted under this subsection
shall be submitted to Congress. Such report shall also
include recommendations for legislative initiatives, if any,
of the Board, based on its findings.
SEC. 1302. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED
BY A DWELLING.
(a) Open End Credit Extensions.--
(1) Credit applications.--Section 127A(a)(13) of the Truth
in Lending Act (15 U.S.C. 1637a(a)(13)) is amended--
(A) by striking ``consultation of tax adviser.--A statement
that the'' and inserting the following: ``tax
deductibility.--A statement that--
``(A) the''; and
(B) by striking the period at the end and inserting the
following: ``; and
``(B) in any case in which the extension of credit exceeds
the fair market value (as defined under the Internal Revenue
Code of 1986) of the dwelling, the interest on the portion of
the credit extension that is greater than the fair market
value of the dwelling is not tax deductible for Federal
income tax purposes.''.
(2) Credit advertisements.--Section 147(b) of the Truth in
Lending Act (15 U.S.C. 1665b(b)) is amended--
(A) by striking ``If any'' and inserting the following:
``(1) In general.--If any''; and
(B) by adding at the end the following:
``(2) Credit in excess of fair market value.--Each
advertisement described in subsection (a) that relates to an
extension of credit that may exceed the fair market value of
the dwelling, and which advertisement is disseminated in
paper form to the public or through the Internet, as opposed
to by radio or television, shall include a clear and
conspicuous statement that--
``(A) the interest on the portion of the credit extension
that is greater than the fair market value of the dwelling is
not tax deductible for Federal income tax purposes; and
``(B) the consumer should consult a tax adviser for further
information regarding the deductibility of interest and
charges.''.
(b) Non-Open End Credit Extensions.--
(1) Credit applications.--Section 128 of the Truth in
Lending Act (15 U.S.C. 1638) is amended--
(A) in subsection (a), by adding at the end the following:
``(15) In the case of a consumer credit transaction that is
secured by the principal dwelling of the consumer, in which
the extension of credit may exceed the fair market value of
the dwelling, a clear and conspicuous statement that--
``(A) the interest on the portion of the credit extension
that is greater than the fair market value of the dwelling is
not tax deductible for Federal income tax purposes; and
``(B) the consumer should consult a tax adviser for further
information regarding the deductibility of interest and
charges.''; and
(B) in subsection (b), by adding at the end the following:
``(3) In the case of a credit transaction described in
paragraph (15) of subsection (a), disclosures required by
that paragraph shall be made to the consumer at the time of
application for such extension of credit.''.
(2) Credit advertisements.--Section 144 of the Truth in
Lending Act (15 U.S.C. 1664) is amended by adding at the end
the following:
``(e) Each advertisement to which this section applies that
relates to a consumer credit transaction that is secured by
the principal dwelling of a consumer in which the extension
of credit may exceed the fair market value of the dwelling,
and which advertisement is disseminated in paper form to the
public or through the Internet, as opposed to by radio or
television, shall clearly and conspicuously state that--
``(1) the interest on the portion of the credit extension
that is greater than the fair market value of the dwelling is
not tax deductible for Federal income tax purposes; and
``(2) the consumer should consult a tax adviser for further
information regarding the deductibility of interest and
charges.''.
(c) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the amendments made by this section.
(2) Effective date.--Regulations issued under paragraph (1)
shall not take effect until the later of--
[[Page S820]]
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1303. DISCLOSURES RELATED TO ``INTRODUCTORY RATES''.
(a) Introductory Rate Disclosures.--Section 127(c) of the
Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding
at the end the following:
``(6) Additional notice concerning `introductory rates'.--
``(A) In general.--Except as provided in subparagraph (B),
an application or solicitation to open a credit card account
and all promotional materials accompanying such application
or solicitation for which a disclosure is required under
paragraph (1), and that offers a temporary annual percentage
rate of interest, shall--
``(i) use the term `introductory' in immediate proximity to
each listing of the temporary annual percentage rate
applicable to such account, which term shall appear clearly
and conspicuously;
``(ii) if the annual percentage rate of interest that will
apply after the end of the temporary rate period will be a
fixed rate, state in a clear and conspicuous manner in a
prominent location closely proximate to the first listing of
the temporary annual percentage rate (other than a listing of
the temporary annual percentage rate in the tabular format
described in section 122(c)), the time period in which the
introductory period will end and the annual percentage rate
that will apply after the end of the introductory period; and
``(iii) if the annual percentage rate that will apply after
the end of the temporary rate period will vary in accordance
with an index, state in a clear and conspicuous manner in a
prominent location closely proximate to the first listing of
the temporary annual percentage rate (other than a listing in
the tabular format prescribed by section 122(c)), the time
period in which the introductory period will end and the rate
that will apply after that, based on an annual percentage
rate that was in effect within 60 days before the date of
mailing the application or solicitation.
``(B) Exception.--Clauses (ii) and (iii) of subparagraph
(A) do not apply with respect to any listing of a temporary
annual percentage rate on an envelope or other enclosure in
which an application or solicitation to open a credit card
account is mailed.
``(C) Conditions for introductory rates.--An application or
solicitation to open a credit card account for which a
disclosure is required under paragraph (1), and that offers a
temporary annual percentage rate of interest shall, if that
rate of interest is revocable under any circumstance or upon
any event, clearly and conspicuously disclose, in a prominent
manner on or with such application or solicitation--
``(i) a general description of the circumstances that may
result in the revocation of the temporary annual percentage
rate; and
``(ii) if the annual percentage rate that will apply upon
the revocation of the temporary annual percentage rate--
``(I) will be a fixed rate, the annual percentage rate that
will apply upon the revocation of the temporary annual
percentage rate; or
``(II) will vary in accordance with an index, the rate that
will apply after the temporary rate, based on an annual
percentage rate that was in effect within 60 days before the
date of mailing the application or solicitation.
``(D) Definitions.--In this paragraph--
``(i) the terms `temporary annual percentage rate of
interest' and `temporary annual percentage rate' mean any
rate of interest applicable to a credit card account for an
introductory period of less than 1 year, if that rate is less
than an annual percentage rate that was in effect within 60
days before the date of mailing the application or
solicitation; and
``(ii) the term `introductory period' means the maximum
time period for which the temporary annual percentage rate
may be applicable.
``(E) Relation to other disclosure requirements.--Nothing
in this paragraph may be construed to supersede subsection
(a) of section 122, or any disclosure required by paragraph
(1) or any other provision of this subsection.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(c)(6) of the
Truth in Lending Act, as added by this section.
(2) Effective date.--Section 127(c)(6) of the Truth in
Lending Act, as added by this section, and regulations issued
under paragraph (1) of this subsection shall not take effect
until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.
(a) Internet-Based Solicitations.--Section 127(c) of the
Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding
at the end the following:
``(7) Internet-based solicitations.--
``(A) In general.--In any solicitation to open a credit
card account for any person under an open end consumer credit
plan using the Internet or other interactive computer
service, the person making the solicitation shall clearly and
conspicuously disclose--
``(i) the information described in subparagraphs (A) and
(B) of paragraph (1); and
``(ii) the information described in paragraph (6).
``(B) Form of disclosure.--The disclosures required by
subparagraph (A) shall be--
``(i) readily accessible to consumers in close proximity to
the solicitation to open a credit card account; and
``(ii) updated regularly to reflect the current policies,
terms, and fee amounts applicable to the credit card account.
``(C) Definitions.--For purposes of this paragraph--
``(i) the term `Internet' means the international computer
network of both Federal and non-Federal interoperable packet
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.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(c)(7) of the
Truth in Lending Act, as added by this section.
(2) Effective date.--The amendment made by subsection (a)
and the regulations issued under paragraph (1) of this
subsection shall not take effect until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1305. DISCLOSURES RELATED TO LATE PAYMENT DEADLINES AND
PENALTIES.
(a) Disclosures Related to Late Payment Deadlines and
Penalties.--Section 127(b) of the Truth in Lending Act (15
U.S.C. 1637(b)) is amended by adding at the end the
following:
``(12) If a late payment fee is to be imposed due to the
failure of the obligor to make payment on or before a
required payment due date, the following shall be stated
clearly and conspicuously on the billing statement:
``(A) The date on which that payment is due or, if
different, the earliest date on which a late payment fee may
be charged.
``(B) The amount of the late payment fee to be imposed if
payment is made after such date.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(b)(12) of the
Truth in Lending Act, as added by this section.
(2) Effective date.--The amendment made by subsection (a)
and regulations issued under paragraph (1) of this subsection
shall not take effect until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1306. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO
INCUR FINANCE CHARGES.
(a) Prohibition on Certain Actions for Failure To Incur
Finance Charges.--Section 127 of the Truth in Lending Act (15
U.S.C. 1637) is amended by adding at the end the following:
``(h) Prohibition on Certain Actions for Failure To Incur
Finance Charges.--A creditor of an account under an open end
consumer credit plan may not terminate an account prior to
its expiration date solely because the consumer has not
incurred finance charges on the account. Nothing in this
subsection shall prohibit a creditor from terminating an
account for inactivity in 3 or more consecutive months.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(h) of the Truth
in Lending Act, as added by this section.
(2) Effective date.--The amendment made by subsection (a)
and regulations issued under paragraph (1) of this subsection
shall not take effect until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1307. DUAL USE DEBIT CARD.
(a) Report.--The Board may conduct a study of, and present
to Congress a report containing its analysis of, consumer
protections under existing law to limit the liability of
consumers for unauthorized use of a debit card or similar
access device. Such report, if submitted, shall include
recommendations for legislative initiatives, if any, of the
Board, based on its findings.
(b) Considerations.--In preparing a report under subsection
(a), the Board may include--
(1) the extent to which section 909 of the Electronic Fund
Transfer Act (15 U.S.C. 1693g), as in effect at the time of
the report, and the implementing regulations promulgated by
the Board to carry out that section provide adequate
unauthorized use liability protection for consumers;
(2) the extent to which any voluntary industry rules have
enhanced or may enhance the level of protection afforded
consumers in connection with such unauthorized use liability;
and
(3) whether amendments to the Electronic Fund Transfer Act
(15 U.S.C. 1693 et seq.), or
[[Page S821]]
revisions to regulations promulgated by the Board to carry
out that Act, are necessary to further address adequate
protection for consumers concerning unauthorized use
liability.
SEC. 1308. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO
DEPENDENT STUDENTS.
(a) Study.--
(1) In general.--The Board shall conduct a study regarding
the impact that the extension of credit described in
paragraph (2) has on the rate of cases filed under title 11
of the United States Code.
(2) Extension of credit.--The extension of credit described
in this paragraph is the extension of credit to individuals
who are--
(A) claimed as dependents for purposes of the Internal
Revenue Code of 1986; and
(B) enrolled within 1 year of successfully completing all
required secondary education requirements and on a full-time
basis, in postsecondary educational institutions.
(b) Report.--Not later than 1 year after the date of
enactment of this Act, the Board shall submit to the Senate
and the House of Representatives a report summarizing the
results of the study conducted under subsection (a).
SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS.
(a) Regulations.--Not later than 6 months after the date of
enactment of this Act, the Board, in consultation with the
other Federal banking agencies (as defined in section 3 of
the Federal Deposit Insurance Act), the National Credit Union
Administration Board, and the Federal Trade Commission, shall
promulgate regulations to provide guidance regarding the
meaning of the term ``clear and conspicuous'', as used in
subparagraphs (A), (B), and (C) of section 127(b)(11) and
clauses (ii) and (iii) of section 127(c)(6)(A) of the Truth
in Lending Act.
(b) Examples.--Regulations promulgated under subsection (a)
shall include examples of clear and conspicuous model
disclosures for the purposes of disclosures required by the
provisions of the Truth in Lending Act referred to in
subsection (a).
(c) Standards.--In promulgating regulations under this
section, the Board shall ensure that the clear and
conspicuous standard required for disclosures made under the
provisions of the Truth in Lending Act referred to in
subsection (a) can be implemented in a manner which results
in disclosures which are reasonably understandable and
designed to call attention to the nature and significance of
the information in the notice.
TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE
SEC. 1401. EMPLOYEE WAGE AND BENEFIT PRIORITIES.
Section 507(a) of title 11, United States Code, as amended
by section 212, is amended--
(1) in paragraph (4) by striking ``90'' and inserting
``180'', and
(2) in paragraphs (4) and (5) by striking ``$4,000'' and
inserting ``$10,000''.
SEC. 1402. FRAUDULENT TRANSFERS AND OBLIGATIONS.
Section 548 of title 11, United States Code, is amended--
(1) in subsections (a) and (b) by striking ``one year'' and
inserting ``2 years'',
(2) in subsection (a)--
(A) by inserting ``(including any transfer to or for the
benefit of an insider under an employment contract)'' after
``transfer'' the 1st place it appears, and
(B) by inserting ``(including any obligation to or for the
benefit of an insider under an employment contract)'' after
``obligation'' the 1st place it appears, and
(3) in subsection (a)(1)(B)(ii)--
(A) in subclause (II) by striking ``or'' at the end,
(B) in subclause (III) by striking the period at the end
and inserting ``; or'', and
(C) by adding at the end the following:
``(IV) made such transfer to or for the benefit of an
insider, or incurred such obligation to or for the benefit of
an insider, under an employment contract and not in the
ordinary course of business.''.
SEC. 1403. PAYMENT OF INSURANCE BENEFITS TO RETIRED
EMPLOYEES.
Section 1114 of title 11, United States Code, is amended--
(1) by redesignating subsection (l) as subsection (m), and
(2) by inserting after subsection (k) the following:
``(l) If the debtor, during the 180-day period ending on
the date of the filing of the petition--
``(1) modified retiree benefits; and
``(2) was insolvent on the date such benefits were
modified;
the court, on motion of a party in interest, and after notice
and a hearing, shall issue an order reinstating as of the
date the modification was made, such benefits as in effect
immediately before such date unless the court finds that the
balance of the equities clearly favors such modification.''.
SEC. 1404. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b),
this title and the amendments made by this title shall take
effect on the date of the enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this title shall apply only with respect
to cases commenced under title 11 of the United States Code
on or after the date of the enactment of this Act.
(2) Avoidance period.--The amendment made by section
1402(1) shall apply only with respect to cases commenced
under title 11 of the United States Code more than 1 year
after the date of the enactment of this Act.
TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as otherwise provided in this
Act, this Act and the amendments made by this Act shall take
effect 180 days after the date of enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as otherwise provided in this Act
and paragraph (2), the amendments made by this Act shall not
apply with respect to cases commenced under title 11, United
States Code, before the effective date of this Act.
(2) Certain limitations applicable to debtors.--The
amendments made by sections 308, 322, and 330 shall apply
with respect to cases commenced under title 11, United States
Code, on or after the date of the enactment of this Act.
SEC. 1502. TECHNICAL CORRECTIONS.
(a) Conforming Amendments to Title 11 of the United States
Code.--Title 11 of the United States Code, as amended by the
preceding provisions of this Act, is amended--
(1) in section 507--
(A) in subsection (a)--
(i) in paragraph (5)(B)(ii) by striking ``paragraph (3)''
and inserting ``paragraph (4)''; and
(ii) in paragraph (8)(D) by striking ``paragraph (3)'' and
inserting ``paragraph (4)'';
(B) in subsection (b) by striking ``subsection (a)(1)'' and
inserting ``subsection (a)(2)''; and
(C) in subsection (d) by striking ``subsection (a)(3)'' and
inserting ``subsection (a)(1)'';
(2) in section 523(a)(1)(A) by striking ``507(a)(2)'' and
inserting ``507(a)(3)'';
(3) in section 752(a) by striking ``507(a)(1)'' and
inserting ``507(a)(2)'';
(4) in section 766--
(A) in subsection (h) by striking ``507(a)(1)'' and
inserting ``507(a)(2)''; and
(B) in subsection (i) by striking ``507(a)(1)'' each place
it appears and inserting ``507(a)(2)'';
(5) in section 901(a) by striking ``507(a)(1)'' and
inserting ``507(a)(2)'';
(6) in section 943(b)(5) by striking ``507(a)(1)'' and
inserting ``507(a)(2)'';
(7) in section 1123(a)(1) by striking ``507(a)(1),
507(a)(2)'' and inserting ``507(a)(2), 507(a)(3)'';
(8) in section 1129(a)(9)--
(A) in subparagraph (A) by striking ``507(a)(1) or
507(a)(2)'' and inserting ``507(a)(2) or 507(a)(3)''; and
(B) in subparagraph (B) by striking ``507(a)(3)'' and
inserting ``507(a)(1)'';
(9) in section 1226(b)(1) by striking ``507(a)(1)'' and
inserting ``507(a)(2)''; and
(10) in section 1326(b)(1) by striking ``507(a)(1)'' and
inserting ``507(a)(2)''.
(b) Related Conforming Amendment.--Section 6(e) of the
Securities Investor Protection Act of 1970 (15 U.S.C.
78fff(e)) is amended by striking ``507(a)(1)'' and inserting
``507(a)(2)''.
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