[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[Senate]
[Pages 28378-28417]
[From the U.S. Government Publishing Office, www.gpo.gov]



                       BANKING REFORM ACT OF 1999

  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 625) to amend title 11, United States Code, and 
     for other purposes.

  The Senate proceeded to consider the bill, which had been reported 
from the Committee on the Judiciary, with amendments; as follows:
  (The parts of the bill intended to be stricken are shown in boldface 
brackets and the parts of the bill intended to be inserted are shown in 
italic.)

                                 S. 625

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Bankruptcy 
     Reform Act of 1999''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                    TITLE I--NEEDS-BASED BANKRUPTCY

Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.
Sec. 105. Credit counseling.

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Violations of the automatic stay.
Sec. 204. Discouraging abuse of reaffirmation practices.

                   Subtitle B--Priority Child Support

Sec. 211. Definition of domestic support obligation.
Sec. [211] 212. Priorities for claims for domestic support obligations.
Sec. [212] 213. Requirements to obtain confirmation and discharge in 
              cases involving domestic support obligations.
Sec. [213] 214. Exceptions to automatic stay in domestic support 
              obligation proceedings.
Sec. [214] 215. Nondischargeability of certain debts for alimony, 
              maintenance, and support.
Sec. [215] 216. Continued liability of property.
Sec. [216] 217. Protection of domestic support claims against 
              preferential transfer motions.
[Sec. 217. Amendment to section 1325 of title 11, United States Code.
[Sec. 218. Definition of domestic support obligation.]
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.

                 Subtitle C--Other Consumer Protections

[Sec. 221. Definitions.
[Sec. 222. Disclosures.
[Sec. 223. Debtor's bill of rights.
[Sec. 224. Enforcement.]
Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. [225] 222. Sense of Congress.
Sec. [226] 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not 
              complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Exemptions.
Sec. 308. Residency requirement for homestead exemption.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide 
              required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the 
              plan.

[[Page 28379]]

Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of the Congress regarding expansion of rule 9011 of the 
              Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Treatment of certain earnings of an individual debtor who 
              files a voluntary case under chapter 11.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

Sec. 401. Rolling stock equipment.
Sec. 402. Adequate protection for investors.
Sec. 403. Meetings of creditors and equity security holders.
Sec. 404. Protection of refinance of security interest.
Sec. 405. Executory contracts and unexpired leases.
Sec. 406. Creditors and equity security holders committees.
Sec. 407. Amendment to section 546 of title 11, United States Code.
Sec. 408. Limitation.
Sec. 409. Amendment to section 330(a) of title 11, United States Code.
Sec. 410. Postpetition disclosure and solicitation.
Sec. 411. Preferences.
Sec. 412. Venue of certain proceedings.
Sec. 413. Period for filing plan under chapter 11.
Sec. 414. Fees arising from certain ownership interests.
Sec. 415. Creditor representation at first meeting of creditors.
[Sec. 416. Elimination of certain fees payable in chapter 11 bankruptcy 
              cases.]
Sec. [417] 416. Definition of disinterested person.
Sec. [418] 417. Factors for compensation of professional persons.
Sec. [419] 418. Appointment of elected trustee.
Sec. 419. Utility service.

            Subtitle B--Small Business Bankruptcy Provisions

Sec. 421. Flexible rules for disclosure statement and plan.
Sec. 422. Definitions; effect of discharge.
Sec. 423. Standard form disclosure Statement and plan.
Sec. 424. Uniform national reporting requirements.
Sec. 425. Uniform reporting rules and forms for small business cases.
Sec. 426. Duties in small business cases.
Sec. 427. Plan filing and confirmation deadlines.
Sec. 428. Plan confirmation deadline.
Sec. 429. Prohibition against extension of time.
Sec. 430. Duties of the United States trustee.
Sec. 431. Scheduling conferences.
Sec. 432. Serial filer provisions.
Sec. 433. Expanded grounds for dismissal or conversion and appointment 
              of trustee.
Sec. 434. Study of operation of title 11, United States Code, with 
              respect to small businesses.
Sec. 435. Payment of interest.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

           TITLE VI--IMPROVED BANKRUPTCY STATISTICS AND DATA

Sec. 601. Audit procedures.
Sec. 602. Improved bankruptcy statistics.
Sec. 603. Uniform rules for the collection of bankruptcy data.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

Sec. 701. Treatment of certain liens.
Sec. 702. Effective notice to government.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Tolling of priority of tax claim time periods.
Sec. 706. Priority property taxes incurred.
Sec. 707. Chapter 13 discharge of fraudulent and other taxes.
Sec. 708. Chapter 11 discharge of fraudulent taxes.
Sec. 709. Stay of tax proceedings.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Amendments to other chapters in title 11, United States Code.
Sec. 803. Claims relating to insurance deposits in cases ancillary to 
              foreign proceedings.

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

Sec. 901. Bankruptcy Code amendments.
Sec. 902. Damage measure.
Sec. 903. Asset-backed securitizations.
Sec. 904. Effective date; application of amendments.

                 TITLE X--PROTECTION OF FAMILY FARMERS

Sec. 1001. Reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Elimination of requirement that family farmer and spouse 
              receive over 50 percent of income from farming operation 
              in year prior to bankruptcy.
Sec. 1004. Certain claims owed to governmental units.

              [TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

[Sec. 1101. Definitions.
[Sec. 1102. Disposal of patient records.
[Sec. 1103. Administrative expense claim for costs of closing a health 
              care business.
[Sec. 1104. Appointment of ombudsman to act as patient advocate.
[Sec. 1105. Debtor in possession; duty of trustee to transfer 
              patients.]

                  TITLE [XII] XI--TECHNICAL AMENDMENTS

Sec. [1201] 1101. Definitions.
Sec. [1202] 1102. Adjustment of dollar amounts.
Sec. [1203] 1103. Extension of time.
Sec. [1204] 1104. Technical amendments.
Sec. [1205] 1105. Penalty for persons who negligently or fraudulently 
              prepare bankruptcy petitions.
Sec. [1206] 1106. Limitation on compensation of professional persons.
Sec. [1207] 1107. Special tax provisions.
Sec. [1208] 1108. Effect of conversion.
Sec. [1209] 1109. Allowance of administrative expenses.
[Sec. 1210. Priorities.
[Sec. 1211. Exemptions.]
Sec. [1212] 1110. Exceptions to discharge.
Sec. [1213] 1111. Effect of discharge.
Sec. [1214] 1112. Protection against discriminatory treatment.
Sec. [1215] 1113. Property of the estate.
Sec. [1216] 1114. Preferences.
Sec. [1217] 1115. Postpetition transactions.
Sec. [1218] 1116. Disposition of property of the estate.
Sec. [1219] 1117. General provisions.
Sec. [1220] 1118. Abandonment of railroad line.
Sec. [1221] 1119. Contents of plan.
Sec. [1222] 1120. Discharge under chapter 12.
Sec. [1223] 1121. Bankruptcy cases and proceedings.
Sec. [1224] 1122. Knowing disregard of bankruptcy law or rule.
Sec. [1225] 1123. Transfers made by nonprofit charitable corporations.
Sec. [1226] 1124. Protection of valid purchase money security 
              interests.
Sec. [1227] 1125. Extensions.
Sec. [1228] 1126. Bankruptcy judgeships.

  TITLE [XIII] XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. [1301] 1201. Effective date; application of amendments.

                    TITLE I--NEEDS-BASED BANKRUPTCY

     SEC. 101. CONVERSION.

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

     SEC. 102. DISMISSAL OR CONVERSION.

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

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

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

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

       (ii) by striking the next to last sentence; and
       (C) by adding at the end the following:
       ``(2)(A)(i) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter, the court shall presume abuse exists if the 
     debtor's current monthly income reduced by the amounts 
     determined under clauses (ii), (iii), and (iv), and 
     multiplied by 60 is not less than the lesser of--
       ``(I) 25 percent of the debtor's nonpriority unsecured 
     claims in the case; or
       ``(II) $15,000.
       ``(ii) The debtor's monthly expenses shall be the 
     applicable monthly (excluding payments for debts) expenses 
     under standards

[[Page 28380]]

     issued by the Internal Revenue Service for the area in which 
     the debtor resides, as in effect on the date of the entry of 
     the order for relief, for the debtor, the dependents of the 
     debtor, and the spouse of the debtor in a joint case, if the 
     spouse is not otherwise a dependent.
       ``(iii) The debtor's average monthly payments on account of 
     secured debts shall be calculated as--
       ``(I) the total of all amounts scheduled as contractually 
     due to secured creditors in each month of the 60 months 
     following the date of the petition; divided by
       ``(II) 60.
       ``(iv) The debtor's expenses for payment of all priority 
     claims (including priority child support and alimony claims) 
     shall be calculated as--
       ``(I) the total amount of debts entitled to priority; 
     divided by
       ``(II) 60.
       ``(B)(i) In any proceeding brought under this subsection, 
     the presumption of abuse may be rebutted by demonstrating 
     special circumstances that justify additional expenses or 
     adjustments of current monthly total income. In order to 
     establish special circumstances, the debtor shall be required 
     to--
       ``(I) itemize each additional expense or adjustment of 
     income; and
       ``(II) provide--
       ``(aa) documentation for such expenses; and
       ``(bb) a detailed explanation of the special circumstances 
     that make such expenses necessary and reasonable.
       ``(ii) The debtor, and the attorney for the debtor if the 
     debtor has an attorney, shall attest under oath to the 
     accuracy of any information provided to demonstrate that 
     additional expenses or adjustments to income are required.
       ``(iii) The presumption of abuse may be rebutted if the 
     additional expenses or adjustments to income referred to in 
     clause (i) cause the product of the debtor's current monthly 
     income reduced by the amounts determined under clauses (ii), 
     (iii), and (iv) of subparagraph (A) multiplied by 60 to be 
     less than the lesser of--
       ``(I) 25 percent of the debtor's nonpriority unsecured 
     claims; or
       ``(II) $15,000.
       ``(C)(i) As part of the schedule of current income and 
     expenditures required under section 521, the debtor shall 
     include a statement of the debtor's current monthly income, 
     and the calculations that determine whether a presumption 
     arises under subparagraph (A)(i), that shows how each such 
     amount is calculated.
       ``(ii) The Supreme Court shall promulgate rules under 
     section 2075 of title 28, that prescribe a form for a 
     statement under clause (i) and may provide general rules on 
     the content of the statement.
       ``(3) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter in a case in which the presumption in 
     subparagraph (A)(i) of such paragraph does not apply or has 
     been rebutted, the court shall consider--
       ``(A) whether the debtor filed the petition in bad faith; 
     or
       ``(B) the totality of the circumstances (including whether 
     the debtor seeks to reject a personal services contract and 
     the financial need for such rejection as sought by the 
     debtor) of the debtor's financial situation demonstrates 
     abuse.''.
       (b) Definition.--Title 11, United States Code, is amended--
       (1) in section 101, by inserting after paragraph (10) the 
     following:
       ``(10A) `current monthly income'--
       ``(A) means the average monthly income from all sources 
     which the debtor, or in a joint case, the debtor and the 
     debtor's spouse, receive without regard to whether the income 
     is taxable income, derived during the 180-day period 
     preceding the date of determination; and
       ``(B) includes any amount paid by any entity other than the 
     debtor (or, in a joint case, the debtor and the debtor's 
     spouse), on a regular basis to the household expenses of the 
     debtor or the debtor's dependents (and, in a joint case, the 
     debtor's spouse if not otherwise a dependent);''; and
       (2) in section 704--
       (A) by inserting ``(a)'' before ``The trustee shall--''; 
     and
       (B) by adding at the end the following:
       ``(b)(1) With respect to an individual debtor under this 
     chapter--
       ``(A) the United States trustee or bankruptcy administrator 
     shall review all materials filed by the debtor and, not later 
     than 10 days before the first meeting of creditors, file with 
     the court a statement as to whether the debtor's case would 
     be presumed to be an abuse under section 707(b); and
       ``(B) not later than 5 days after receiving a statement 
     under subparagraph (A), the court shall provide a copy of the 
     statement to all creditors.
       ``(2) The United States trustee or bankruptcy administrator 
     shall not later than 30 days after receiving a statement 
     filed under paragraph (1) file a motion to dismiss or convert 
     under section 707(b), or file a statement setting forth the 
     reasons the United States trustee or bankruptcy administrator 
     does not believe that such a motion would be [appropriate. 
     If,] appropriate, if based on the filing of such statement 
     with the court, the United States trustee or bankruptcy 
     administrator determines that the debtor's case should be 
     presumed to be an abuse under section 707(b) and the product 
     of the debtor's current monthly income, multiplied by 12 is 
     not less than--
       ``(A) the highest national or applicable State median 
     family income reported for a family of equal or lesser size, 
     whichever is greater; or
       ``(B) in the case of a household of 1 person, the national 
     or applicable State median household income for 1 earner, 
     whichever is greater.
       ``(3)(A) The court shall order the counsel for the debtor 
     to reimburse the panel trustee for all reasonable costs in 
     prosecuting a motion brought under section 707(b), including 
     reasonable attorneys' fees, if--
       ``(i) a panel trustee appointed under section 586(a)(1) of 
     title 28 brings a motion for dismissal or conversion under 
     this subsection; and
       ``(ii) the court--
       ``(I) grants that motion; and
       ``(II) finds that the action of the counsel for the debtor 
     in filing under this chapter was not substantially justified.
       ``(B) If the court finds that the attorney for the debtor 
     violated Rule 9011, at a minimum, the court shall order--
       ``(i) the assessment of an appropriate civil penalty 
     against the counsel for the debtor; and
       ``(ii) the payment of the civil penalty to the panel 
     trustee or the United States trustee.
       ``(C) In the case of a petition referred to in subparagraph 
     (B), the signature of an attorney shall constitute a 
     certificate that the attorney has--
       ``(i) performed a reasonable investigation into the 
     circumstances that gave rise to the petition; and
       ``(ii) determined that the petition--
       ``(I) is well grounded in fact; and
       ``(II) is warranted by existing law or a good faith 
     argument for the extension, modification, or reversal of 
     existing law and does not constitute an abuse under paragraph 
     (1).
       ``(4)(A) Except as provided in subparagraph (B) and subject 
     to paragraph (5), the court may award a debtor all reasonable 
     costs in contesting a motion brought by a party in interest 
     (other than a panel trustee or United States trustee) under 
     this subsection (including reasonable attorneys' fees) if--
       ``(i) the court does not grant the motion; and
       ``(ii) the court finds that--
       ``(I) the position of the party that brought the motion was 
     not substantially justified; or
       ``(II) the party brought the motion solely for the purpose 
     of coercing a debtor into waiving a right guaranteed to the 
     debtor under this title.
       ``(B) A party in interest that has a claim of an aggregate 
     amount less than $1,000 shall not be subject to subparagraph 
     (A).
       ``(5) Only the judge, United States trustee, bankruptcy 
     administrator, or panel trustee may bring a motion under this 
     section if the debtor and the debtor's spouse combined, as of 
     the date of the order for relief, have a total current 
     monthly income equal to or less than the national or 
     applicable State median family monthly income calculated on a 
     monthly basis for a family of equal size.''.
       (c) Clerical Amendment.--The table of sections for chapter 
     7 of title 11, United States Code, is amended by striking the 
     item relating to section 707 and inserting the following:

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

     SEC. 103. NOTICE OF ALTERNATIVES.

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

     SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

       (a) Development of Financial Management and Training 
     Curriculum and Materials.--The Director of the Executive 
     Office for United States Trustees (in this section referred 
     to as the ``Director'') shall--
       (1) consult with a wide range of individuals who are 
     experts in the field of debtor education, including trustees 
     who are appointed under chapter 13 of title 11, United States 
     Code, and who operate financial management education programs 
     for debtors; and
       (2) develop a financial management training curriculum and 
     materials that may be used to educate individual debtors 
     concerning how to better manage their finances.

[[Page 28381]]

       (b) Test.--
       (1) In general.--The Director shall select 3 judicial 
     districts of the United States in which to test the 
     effectiveness of the financial management training curriculum 
     and materials developed under subsection (a).
       (2) Availability of curriculum and materials.--For a 1-year 
     period beginning not later than 270 days after the date of 
     enactment of this Act, the curriculum and materials referred 
     to in paragraph (1) shall be made available by the Director, 
     directly or indirectly, on request to individual debtors in 
     cases filed during that 1-year period under chapter 7 or 13 
     of title 11, United States Code.
       (c) Evaluation.--
       (1) In general.--During the 1-year period referred to in 
     subsection (b), the Director shall evaluate the effectiveness 
     of--
       (A) the financial management training curriculum and 
     materials developed under subsection (a); and
       (B) a sample of existing consumer education programs such 
     as those described in the report of the National Bankruptcy 
     Review Commission issued on October 20, 1997, that are 
     representative of consumer education programs carried out 
     by--
       (i) the credit industry;
       (ii) trustees serving under chapter 13 of title 11, United 
     States Code; and
       (iii) consumer counseling groups.
       (2) Report.--Not later than 3 months after concluding the 
     evaluation under paragraph (1), the Director shall submit a 
     report to the Speaker of the House of Representatives and the 
     President pro tempore of the Senate, for referral to the 
     appropriate committees of Congress, containing the findings 
     of the Director regarding the effectiveness of such 
     curriculum, such materials, and such programs.

     SEC. 105. CREDIT COUNSELING.

       (a) Who May Be a Debtor.--Section 109 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(h)(1) Subject to paragraphs (2) and (3), and 
     notwithstanding any other provision of this section, an 
     individual may not be a debtor under this title unless that 
     individual has, during the [90-day period] 180-day period 
     preceding the date of filing of the petition of that 
     individual, received from an approved nonprofit credit 
     counseling service described in section 111(a) an individual 
     or group briefing that outlined the opportunities for 
     available credit counseling and assisted that individual in 
     performing a related budget analysis.
       ``(2)(A) Paragraph (1) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee or bankruptcy administrator of the bankruptcy court 
     of that district determines that the approved nonprofit 
     credit counseling services for that district are not 
     reasonably able to provide adequate services to the 
     additional individuals who would otherwise seek credit 
     counseling from those programs by reason of the requirements 
     of paragraph (1).
       ``(B) Each United States trustee or bankruptcy 
     administrator that makes a determination described in 
     subparagraph (A) shall review that determination not later 
     than 1 year after the date of that determination, and not 
     less frequently than every year thereafter.
       ``(3)(A) Subject to subparagraph (B), the requirements of 
     paragraph (1) shall not apply with respect to a debtor who 
     submits to the court a certification that--
       ``(i) describes exigent circumstances that merit a waiver 
     of the requirements of paragraph (1);
       ``(ii) states that the debtor requested credit counseling 
     services from an approved nonprofit credit counseling 
     service, but was unable to obtain the services referred to in 
     paragraph (1) during the 5-day period beginning on the date 
     on which the debtor made that request; and
       ``(iii) is satisfactory to the court.
       ``(B) With respect to a debtor, an exemption under 
     subparagraph (A) shall cease to apply to that debtor on the 
     date on which the debtor meets the requirements of paragraph 
     (1), but in no case may the exemption apply to that debtor 
     after the date that is 30 days after the debtor files a 
     petition.''.
       (b) Chapter 7 Discharge.--Section 727(a) of title 11, 
     United States Code, is amended--
       (1) in paragraph (9), by striking ``or'' at the end;
       (2) in paragraph (10), by striking the period and inserting 
     ``; or''; and
       (3) by adding at the end the following:
       ``(11) after the filing of the petition, the debtor failed 
     to complete an instructional course concerning personal 
     financial management described in section 111.''.
       (c) Chapter 13 Discharge.--Section 1328 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(g) The court shall not grant a discharge under this 
     section to a debtor, unless after filing a petition the 
     debtor has completed an instructional course concerning 
     personal financial management described in section 111.
       ``(h) Subsection (g) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee or bankruptcy administrator of the bankruptcy court 
     of that district determines that the approved instructional 
     courses are not adequate to service the additional 
     individuals who would be required to complete the 
     instructional course by reason of the requirements of this 
     section.
       ``(i) Each United States trustee or bankruptcy 
     administrator that makes a determination described in 
     subsection (h) shall review that determination not later than 
     1 year after the date of that determination, and not less 
     frequently than every year thereafter.''.
       (d) Debtor's Duties.--Section 521 of title 11, United 
     States Code, is amended--
       (1) by inserting ``(a)'' before ``The debtor shall--''; and
       (2) by adding at the end the following:
       ``(b) In addition to the requirements under subsection (a), 
     an individual debtor shall file with the court--
       ``(1) a certificate from the credit counseling service that 
     provided the debtor services under section 109(h); and
       ``(2) a copy of the debt repayment plan, if any, developed 
     under section 109(h) through the credit counseling service 
     referred to in paragraph (1).''.
       (e) General Provisions.--
       (1) In general.--Chapter 1 of title 11, United States Code, 
     is amended by adding at the end the following:

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

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

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

       (f) Limitation.--Section 362 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(i) If a case commenced under chapter 7, 11, or 13 [of 
     this title] is dismissed due to the creation of a debt 
     repayment plan, for purposes of subsection (c)(3), any 
     subsequent case commenced by the debtor under any such 
     chapter shall not be presumed to be filed not in good 
     faith.''.

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

     SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.

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

     SEC. 202. EFFECT OF DISCHARGE.

       Section 524 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(i) The willful failure of a creditor to credit payments 
     received under a plan confirmed under this title (including a 
     plan of reorganization confirmed under chapter 11 of this 
     title) in the manner required by the plan (including 
     crediting the amounts required under the plan) shall 
     constitute a violation of an injunction under subsection 
     (a)(2).''.

     SEC. 203. VIOLATIONS OF THE AUTOMATIC STAY.

       Section 362(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (7), by striking ``and'' at the end;
       (2) in paragraph (8), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(9) any communication (other than a recitation of the 
     creditor's legal rights) threatening a debtor (for the 
     purpose of coercing

[[Page 28382]]

     an agreement for the reaffirmation of debt), at any time 
     after the commencement and before the granting of a discharge 
     in a case under this title, of an intention to--
       ``(A) file a motion to--
       ``(i) determine the dischargeability of a debt; or
       ``(ii) under section 707(b), [to] dismiss or convert a 
     case; or
       ``(B) repossess collateral from the debtor to which the 
     stay applies.''.

     SEC. 204. DISCOURAGING ABUSE OF REAFFIRMATION PRACTICES.

       (a) In General.--Section 524 of title 11, United States 
     Code, as amended by section 202 of this Act, is amended--
       (1) in subsection (c)--
       (A) in paragraph (2)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by inserting ``and'' at the end; 
     and
       (iii) by adding at the end the following:
       ``(C)(i) the consideration for such agreement is based on a 
     wholly unsecured consumer debt; and
       ``(ii) such agreement contains a clear and conspicuous 
     statement that advises the debtor that--
       ``(I) the debtor is entitled to a hearing before the court 
     at which--

       ``(aa) the debtor shall appear in person; and
       ``(bb) the court shall decide whether the agreement 
     constitutes an undue hardship, is not in the debtor's best 
     interest, or is not the result of a threat by the creditor to 
     take an action that, at the time of the threat, [that] the 
     creditor may not legally take or does not intend to take; and

       ``(II) if the debtor is represented by counsel, the debtor 
     may waive the debtor's right to a hearing under subclause (I) 
     by signing a statement--

       ``(aa) waiving the hearing;
       ``(bb) stating that the debtor is represented by counsel; 
     and
       ``(cc) identifying the counsel[.] ;''; [and]

       (B) in paragraph (6)(A)--
       (i) in clause (i), by striking ``and'' at the end;
       (ii) in clause (ii), by striking the period and inserting 
     ``; and''; and
       (iii) by adding at the end the following:
       ``(iii) not an agreement that the debtor entered into as a 
     result of a threat by the creditor to take an action that, at 
     the time of the threat, the creditor could not legally take 
     or did not intend to take[.]; except that''; and
       (C) in paragraph (6)(B), by striking ``Subparagraph'' and 
     inserting ``subparagraph''; and
       (2) in subsection (d), in the third sentence, by inserting 
     after ``during the course of negotiating an agreement'' the 
     following: ``(or if the consideration by such agreement is 
     based on a wholly secured consumer debt, and the debtor has 
     not waived the right to a hearing under subsection 
     (c)(2)(C))''.
       (b) Law Enforcement.--
       (1) In general.--Chapter 9 of title 18, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 158. Designation of United States attorneys and agents 
       of the Federal Bureau of Investigation to address abusive 
       reaffirmations of debt

       ``(a) In General.--The Attorney General of the United 
     States shall designate the individuals described in 
     subsection (b) to have primary responsibility in carrying out 
     enforcement activities in addressing violations of section 
     152 or 157 relating to abusive reaffirmations of debt.
       ``(b) United States District Attorneys and Agents of the 
     Federal Bureau of Investigation--The individuals referred to 
     in subsection (a) are--
       ``(1) a United States attorney for each judicial district 
     of the United States; and
       ``(2) an agent of the Federal Bureau of Investigation 
     (within the meaning of section 3107) for each field office of 
     the Federal Bureau of Investigation.
       ``(c) Bankruptcy Investigations.--Each United States 
     attorney designated under this section shall have primary 
     responsibility for carrying out the duties of a United States 
     attorney under section 3057.''.
       (2) Clerical amendment.--The analysis for chapter 9 of 
     title 18, United States Code, is amended by adding at the end 
     the following:

``158. Designation of United States attorneys and agents of the Federal 
              Bureau of Investigation to address abusive reaffirmations 
              of debt.''.
       (c) Exceptions to Discharge.--Section 523 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(f) Nothing in this section or in any other provision of 
     this title shall preempt any State law relating to unfair 
     trade practices that imposes restrictions on creditor conduct 
     that would give rise to liability--
       ``(1) under this section; or
       ``(2) under section 524, for failure to comply with 
     applicable requirements for seeking a reaffirmation of debt.
       ``(g) Actions by States.--The attorney general of a State, 
     or an official or agency designated by a State--
       ``(1) may bring an action on behalf of its residents to 
     recover damages on their behalf under subsection (d) or 
     section 524(c); and
       ``(2) may bring an action in a State court to enforce a 
     State criminal law that is similar to section 152 or 157 of 
     title 18.''.

                   Subtitle B--Priority Child Support

     SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

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

     SEC. [211.] 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 redesignated, by striking 
     ``First'' and inserting ``Second'';
       (4) in paragraph (3), as redesignated, by striking 
     ``Second'' and inserting ``Third'';
       (5) in paragraph (4), as redesignated, by striking 
     ``Third'' and inserting ``Fourth'';
       (6) in paragraph (5), as redesignated, by striking 
     ``Fourth'' and inserting ``Fifth'';
       (7) in paragraph (6), as redesignated, by striking 
     ``Fifth'' and inserting ``Sixth'';
       (8) in paragraph (7), as redesignated, by striking 
     ``Sixth'' and inserting ``Seventh''; and
       (9) by inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) First, allowed unsecured claims for domestic support 
     obligations to be paid in the following order on the 
     condition that funds received under this paragraph by a 
     governmental unit in a case under this title be applied and 
     distributed in accordance with applicable nonbankruptcy law:
       ``(A) Claims that, as of the date of entry of the order for 
     relief, are owed directly to a spouse, former spouse, or 
     child of the debtor, or the parent or legal guardian of such 
     child, without regard to whether the claim is filed by the 
     spouse, former spouse, child, or [parent] such child's parent 
     or legal guardian, or is filed by a governmental unit on 
     behalf of that person.
       ``(B) Claims that, as of the date of entry of the order for 
     relief, are assigned by a spouse, former spouse, child of the 
     debtor, or the parent or legal guardian of that child to a 
     governmental unit or are owed directly to a governmental unit 
     under applicable nonbankruptcy law.''.

     SEC. [212.] 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 statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order or statute for such obligation that become payable 
     after the date on which the petition is filed.'';]
       (1) 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 in the end the following:
       ``(4) if the debtor is required by judicial or 
     administrative order or statute to pay a domestic support 
     obligation, unless the holder of such claim agrees to a 
     different treatment of such claim, provide for the full 
     payment of--
       ``(A) all amounts payable under such order or statute for 
     such obligation that first become payable after the date on 
     which the petition is filed; and
       ``(B) all amounts payable under such order before the date 
     on which such petition was filed, if such amounts are owed 
     directly to a spouse, former spouse, child of the debtor, or 
     a parent or legal guardian of such child.'';
       (2) 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) if the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the plan provides for the full payment of all 
     amounts payable under such order or statute for such 
     obligation that initially become payable after the date on 
     which the petition is filed.'';

[[Page 28383]]

       (3) in section 1228(a)--
       (A) by striking ``(a) As soon as practicable'' and 
     inserting ``(a)(1) Subject to paragraph (2), as soon as 
     practicable'';
       (B) by striking ``(1) provided'' and inserting the 
     following:
       ``(A) provided'';
       (C) by striking ``(2) of the kind'' and inserting the 
     following:
       ``(B) of the kind''; and
       (D) by adding at the end the following:
       ``(2) With respect to a debtor who is required by a 
     judicial or administrative order or statute to pay a domestic 
     support obligation, the court may not grant the debtor a 
     discharge under paragraph (1) until after the debtor 
     certifies that--
       ``(A) all amounts payable under that order or statute that 
     initially became payable after the date on which the petition 
     was filed (through the date of the certification) have been 
     paid; and
       ``(B) all amounts payable under that order that, as of the 
     date of the certification, are owed directly to a spouse, 
     former spouse, or child of the debtor, or the parent or legal 
     guardian of such child, have been paid, unless the holder of 
     such claim agrees to a different treatment of such claim.'';
       [(2)] (4) in section 1325(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) if the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, [the debtor has paid] the plan provides for full 
     payment of all amounts payable under such order for such 
     obligation that become payable after the date on which the 
     petition is filed.''; and
       [(3)] (5) in section 1328(a), in the matter preceding 
     paragraph (1), by inserting ``, and with respect to a debtor 
     who is required by a judicial or administrative order to pay 
     a domestic support obligation, and with respect to whom the 
     court certifies that all amounts payable under such order or 
     [statute that are due on or before the date] statute that 
     initially became payable after the date on which the petition 
     was filed through the date of the [certification (including 
     amounts due before or after the petition was filed) have been 
     paid'' after ``completion by the debtor of all payments under 
     the plan''.] certification have been paid, after all amounts 
     payable under that order that, as of the date of 
     certification, are owed directly to a spouse, former spouse, 
     or child of the debtor, or the parent or legal guardian of 
     such child have been paid (unless the holder of such claim 
     agrees to a different treatment of such claim),'' after 
     ``completion by the debtor of all payments under the plan''.

     SEC. [213.] 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC 
                   SUPPORT OBLIGATION PROCEEDINGS.

       Section 362(b) of title 11, United States Code, is 
     amended--
       (1) by striking paragraph (2) and inserting the following:
       ``(2) under subsection (a)--
       ``(A) of the commencement of an action or proceeding for--
       ``(i) the establishment of paternity [as a part of an 
     effort to collect domestic support obligations]; or
       ``(ii) the establishment or modification of an order for 
     domestic support obligations; or
       ``(B) the collection of a domestic support obligation from 
     property that is not property of the estate;'';
       [(2) in paragraph (17), by striking ``or'' at the end;
       [(3) in paragraph (18), by striking the period at the end 
     and inserting a semicolon; and
       [(4) by inserting after paragraph (18) the following:
       [``(19) under subsection (a) with respect to the 
     withholding of income under an order as specified in section 
     466(b) of the Social Security Act (42 U.S.C. 666(b)); or
       [``(20) under subsection (a) with respect to--]
       (2) by inserting after paragraph (4) the following:
       ``(5) under subsection (a) with respect to the withholding 
     of income--
       ``(A) for payment of a domestic support obligation for 
     amounts that initially become payable after the date the 
     petition was filed; and
       ``(B) for payment of a domestic support obligation for 
     amounts payable before the date the petition was filed, and 
     owed directly to the spouse, former spouse, or child of the 
     debtor, or the parent or guardian of such child;'';
       (3) in paragraph (17), by striking ``or'' at the end;
       (4) in paragraph (18), by striking the period at the end 
     and inserting ``; or''; and
       (5) by inserting after paragraph (18) the following:
       ``(19) under subsection (a) with respect to--
       ``(A) the withholding, suspension, or restriction of 
     drivers' licenses, professional and occupational licenses, 
     and recreational licenses under State law, as specified in 
     section 466(a)(16) of the Social Security Act (42 U.S.C. 
     666(a)(16)) [or with respect];
       ``(B) [to] the reporting of overdue support owed by an 
     absent parent to any consumer reporting agency as specified 
     in section 466(a)(7) of the Social Security Act (42 U.S.C. 
     666(a)(7));
       ``[(B)] (C) the interception of tax refunds, as specified 
     in sections 464 and 466(a)(3) of the Social Security Act (42 
     U.S.C. 664 and 666(a)(3)), if such tax refund is payable 
     directly to a spouse, former spouse, or child of the debtor, 
     or the parent or legal guardian of such child; or
       ``[(C)] (D) the enforcement of medical obligations as 
     specified under title IV of the Social Security Act (42 
     U.S.C. 601 et seq.).''.

     SEC. [214.] 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR 
                   ALIMONY, MAINTENANCE, AND SUPPORT.

       Section 523 of title 11, United States Code, is amended--
       [(1) in subsection (a), by striking paragraph (5) and 
     inserting the following:
       [``(5) for a domestic support obligation;'';]
       (1) in subsection (a)--
       (A) by striking paragraph (5) and inserting the following:
       ``(5) for a domestic support obligation;'';
       (B) in paragraph (15)--
       (i) by inserting ``or'' after ``court of record''; and
       (ii) by striking ``unless--'' and all that follows through 
     the end of the paragraph and inserting a semicolon; and
       (2) in subsection (c), by striking ``(6), or (15)'' and 
     inserting ``or (6)''[; and].
       [(3) in paragraph (15), by striking ``governmental unit'' 
     and all through the end of the paragraph and inserting a 
     semicolon.]

     SEC. [215.] 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));''; and
       (2) in subsection (f)(1)(A), by striking the dash and all 
     that follows through the end of the subparagraph and 
     inserting ``of a kind that is specified in section 523(a)(5); 
     or''.

     SEC. [216.] 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; or''.

     [SEC. 217. AMENDMENT TO SECTION 1325 OF TITLE 11, UNITED 
                   STATES CODE.

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

     [SEC. 218. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

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

     SEC. 218. DISPOSABLE INCOME DEFINED.

       (a) Confirmation of Plan Under Chapter 12.--Section 
     1225(b)(2)(A) of title 11, United States Code, is amended by 
     inserting ``for a child support, foster care, or disability 
     payment for a dependent child made in accordance with 
     applicable nonbankruptcy law'' after ``dependent of the 
     debtor''.
       (b) Confirmation of Plan Under Chapter 13.--Section 
     1325(b)(2)(A) of title 11, United States Code, is amended by 
     inserting ``or for a child support, foster care, or 
     disability payment for a dependent child made in accordance 
     with applicable nonbankruptcy law'' 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(b) of 
     this Act, is amended--
       (1) in subsection (a)--
       (A) in paragraph (8), by striking ``and'' at the end;
       (B) in paragraph (9), by striking the period and inserting 
     ``; and''; and

[[Page 28384]]

       (C) by adding at the end the following:
       ``(10) if, with respect to an individual debtor, there is a 
     claim for support of a child of the debtor or a custodial 
     parent or legal guardian of such child entitled to receive 
     priority under section 507(a)(1), provide the applicable 
     notification specified in subsection (c).''; and
       (2) by adding at the end the following:
       ``(c)(1) In any case described in subsection (a)(10), the 
     trustee shall--
       ``(A)(i) notify in writing the holder of the claim of the 
     right of that holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act (42 U.S.C. [654] 664 and 666, 
     respectively) for the State in which the holder resides for 
     assistance in collecting child support during and after the 
     bankruptcy procedures; [and]
       ``(ii) include in the notice under this paragraph the 
     address and telephone number of the child support enforcement 
     agency; and
       ``(iii) include in the notice an explanation of the rights 
     of the holder of the claim to payment of the claim under this 
     chapter; and
       ``(B)(i) notify in writing the State child support agency 
     of the State in which the holder of the claim resides of the 
     claim;
       ``(ii) include in the notice under this paragraph the name, 
     address, and telephone number of the holder of the claim; and
       ``(iii) at such time as the debtor is granted a discharge 
     under section 727, notify the holder of that claim and the 
     State child support agency of the State in which that holder 
     resides of--
       ``(I) the granting of the discharge;
       ``(II) the last recent known address of the debtor; and
       ``(III) with respect to the debtor's case, the name of each 
     creditor that holds a claim that--
       ``(aa) [that] is not discharged under paragraph (2), (4), 
     or (14A) of section 523(a); or
       ``(bb) [that] was reaffirmed by the debtor under section 
     524(c).
       ``(2)(A) If, after receiving a notice under paragraph 
     (1)(B)(iii), a holder of a claim or a State child support 
     agency is unable to locate the debtor that is the subject of 
     the notice, that party may request from a creditor described 
     in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable to the debtor or any other person by 
     reason of making that disclosure.''.
       (b) Duties of Trustee Under Chapter 11.--Section 1106 of 
     title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(7) if, with respect to an individual debtor, there is a 
     claim for support of a child of the debtor or a custodial 
     parent or legal guardian of such child entitled to receive 
     priority under section 507(a)(1), provide the applicable 
     notification specified in subsection (c).''; and
       (2) by adding at the end the following:
       ``(c)(1) In any case described in subsection (b)(7), the 
     trustee shall--
       ``(A)(i) notify in writing the holder of the claim of the 
     right of that holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act (42 U.S.C. 664 and 666) for 
     the State in which the holder resides; and
       ``(ii) include in the notice under this paragraph the 
     address and telephone number of the child support enforcement 
     agency; and
       ``(B)(i) notify, in writing, the State child support agency 
     (of the State in which the holder of the claim resides) of 
     the claim;
       ``(ii) include in the notice under this paragraph the name, 
     address, and telephone number of the holder of the claim; and
       ``(iii) at such time as the debtor is granted a discharge 
     under section 1141, notify the holder of the claim and the 
     State child support agency of the State in which that holder 
     resides of--
       ``(I) the granting of the discharge;
       ``(II) the last recent known address of the debtor; and
       ``(III) with respect to the debtor's case, the name of each 
     creditor that holds a claim that--
       ``(aa) is not discharged under paragraph (2), (4), or (14A) 
     of section 523(a); or
       ``(bb) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) If, after receiving a notice under paragraph 
     (1)(B)(iii), a holder of a claim or a State child support 
     agency is unable to locate the debtor that is the subject of 
     the notice, that party may request from a creditor described 
     in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable to the debtor or any other person by 
     reason of making that disclosure.''.
       (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 an individual debtor, there is a 
     claim for support of a child of the debtor or a custodial 
     parent or legal guardian of such child entitled to receive 
     priority under section 507(a)(1), provide the applicable 
     notification specified in subsection (c).''; and
       (2) by adding at the end the following:
       ``(c)(1) In any case described in subsection (b)(6), the 
     trustee shall--
       ``(A)(i) notify in writing the holder of the claim of the 
     right of that holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act (42 U.S.C. 664 and 666) for 
     the State in which the holder resides; and
       ``(ii) include in the notice under this paragraph the 
     address and telephone number of the child support enforcement 
     agency; and
       ``(B)(i) notify, in writing, the State child support agency 
     (of the State in which the holder of the claim resides) of 
     the claim;
       ``(ii) include in the notice under this paragraph the name, 
     address, and telephone number of the holder of the claim; and
       ``(iii) at such time as the debtor is granted a discharge 
     under section 1228, notify the holder of the claim and the 
     State child support agency of the State in which that holder 
     resides of--
       ``(I) the granting of the discharge;
       ``(II) the last recent known address of the debtor; and
       ``(III) with respect to the debtor's case, the name of each 
     creditor that holds a claim that--
       ``(aa) is not discharged under paragraph (2), (4), or (14A) 
     of section 523(a); or
       ``(bb) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) If, after receiving a notice under paragraph 
     (1)(B)(iii), a holder of a claim or a State child support 
     agency is unable to locate the debtor that is the subject of 
     the notice, that party may request from a creditor described 
     in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable to the debtor or any other person by 
     reason of making that disclosure.''.
       [(b)] (d) Duties of Trustee Under Chapter 13.--Section 1302 
     of title 11, United States Code, [as amended by section 
     102(b) of this Act,] is amended--
       (1) in subsection (b)--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(6) if, with respect to an individual debtor, there is a 
     claim for support of a child of the debtor or a custodial 
     parent or legal guardian of such child entitled to receive 
     priority under section 507(a)(1), provide the applicable 
     notification specified in subsection (d).''; and
       [(s)] (2) by adding at the end the following:
       ``(d)(1) In any case described in subsection (b)(6), the 
     trustee shall--
       ``(A)(i) notify in writing the holder of the claim of the 
     right of that holder to use the services of a State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act (42 U.S.C. 664 and 666, 
     respectively) for the State in which the holder resides; and
       ``(ii) include in the notice under this paragraph the 
     address and telephone number of the child support enforcement 
     agency; and
       ``(B)(i) notify in writing the State child support agency 
     of the State in which the holder of the claim resides of the 
     claim; [and]
       ``(ii) include in the notice under this paragraph the name, 
     address, and telephone number of the holder of the claim; and
       ``(iii) at such time as the debtor is granted a discharge 
     under section 1328, notify the holder of the claim and the 
     State child support agency of the State in which that holder 
     resides of--
       ``(I) the granting of the discharge;
       ``(II) the last recent known address of the debtor; and
       ``(III) with respect to the debtor's case, the name of each 
     creditor that holds a claim that--
       ``(aa) [that] is not discharged under paragraph (2), (4), 
     or (14A) of section 523(a); or
       ``(bb) [that] was reaffirmed by the debtor under section 
     524(c).
       ``(2)(A) If, after receiving a notice under paragraph 
     (1)(B)(iii), a holder of a claim or a State child support 
     agency is unable to locate the debtor that is the subject of 
     the notice, that party may request from a creditor described 
     in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable to the debtor or any other person by 
     reason of making that disclosure.''.

                 Subtitle C--Other Consumer Protections

     [SEC. 221. DEFINITIONS.

       [(a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       [(1) by inserting after paragraph (3) the following:
       [``(3A) `assisted person' means any person whose debts 
     consist primarily of consumer

[[Page 28385]]

     debts and whose nonexempt assets are less than $150,000;'';
       [(2) by inserting after paragraph (4) the following:
       [``(4A) `bankruptcy assistance' means any goods or services 
     sold or otherwise provided to an assisted person with the 
     express or implied purpose of providing information, advice, 
     counsel, document preparation or filing, or attendance at a 
     creditors' meeting or appearing in a proceeding on behalf of 
     another or providing legal representation with respect to a 
     proceeding under this title;''; and
       [(3) by inserting after paragraph (12A) the following:
       [``(12B) `debt relief agency' means any person who provides 
     any bankruptcy assistance to an assisted person in return for 
     the payment of money or other valuable consideration, or who 
     is a bankruptcy petition preparer under section 110, but does 
     not include any person that is any of the following or an 
     officer, director, employee, or agent thereof--
       [``(A) any nonprofit organization which is exempt from 
     taxation under section 501(c)(3) of the Internal Revenue Code 
     of 1986;
       [``(B) any creditor of the person to the extent the 
     creditor is assisting the person to restructure any debt owed 
     by the person to the creditor; or
       [``(C) any depository institution (as defined in section 3 
     of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or any 
     Federal credit union or State credit union (as those terms 
     are defined in section 101 of the Federal Credit Union Act 
     (12 U.S.C. 1751)), or any affiliate or subsidiary of such a 
     depository institution or credit union;''.
       [(b) Conforming Amendment.--Section 104(b)(1) of title 11, 
     United States Code, is amended by inserting ``101(3),'' after 
     ``sections''.

     [SEC. 222. DISCLOSURES.

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

     [``Sec. 526. Disclosures

       [``(a) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide the following notices to 
     the assisted person:
       [``(1) The written notice required under section 342(b)(1).
       [``(2) To the extent not covered in the written notice 
     described in paragraph (1) and not later than 3 business days 
     after the first date on which a debt relief agency first 
     offers to provide any bankruptcy assistance services to an 
     assisted person, a clear and conspicuous written notice 
     advising assisted persons that--
       [``(A) all information the assisted person is required to 
     provide with a petition and thereafter during a case under 
     this title shall be complete, accurate, and truthful;
       [``(B) all assets and all liabilities shall be completely 
     and accurately disclosed in the documents filed to commence 
     the case, and the replacement value of each asset, as defined 
     in section 506, shall be stated in those documents if 
     requested after reasonable inquiry to establish such value;
       [``(C) total current monthly income, projected monthly net 
     income and, in a case under chapter 13, monthly net income 
     shall be stated after reasonable inquiry; and
       [``(D) information an assisted person provides during the 
     case of that person may be audited under this title and the 
     failure to provide such information may result in dismissal 
     of the proceeding under this title or other sanction 
     including, in some instances, criminal sanctions.
       [``(b) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide each assisted person at 
     the same time as the notices required under subsection (a)(1) 
     with the following statement, to the extent applicable, or a 
     substantially similar statement. The statement shall be clear 
     and conspicuous and shall be in a single document separate 
     from other documents or notices provided to the assisted 
     person:
       [`` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE 
     SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER
       [`` `If you decide to seek bankruptcy relief, you can 
     represent yourself, you can hire an attorney to represent 
     you, or you can get help in some localities from a bankruptcy 
     petition preparer who is not an attorney. THE LAW REQUIRES AN 
     ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A 
     WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY 
     PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. 
     Ask to see the contract before you hire anyone.
       [`` `The following information helps you understand what 
     must be done in a routine bankruptcy case to help you 
     evaluate how much service you need. Although bankruptcy can 
     be complex, many cases are routine.
       [`` `Before filing a bankruptcy case, either you or your 
     attorney should analyze your eligibility for different forms 
     of debt relief made available by the Bankruptcy Code and 
     which form of relief is most likely to be beneficial for you. 
     Be sure you understand the relief you can obtain and its 
     limitations. To file a bankruptcy case, documents called a 
     Petition, Schedules and Statement of Financial Affairs, as 
     well as in some cases a Statement of Intention need to be 
     prepared correctly and filed with the bankruptcy court. You 
     will have to pay a filing fee to the bankruptcy court. Once 
     your case starts, you will have to attend the required first 
     meeting of creditors where you may be questioned by a court 
     official called a ``trustee'' and by creditors.
       [`` `If you choose to file a chapter 7 case, you may be 
     asked by a creditor to reaffirm a debt. You may want help 
     deciding whether to do so and a creditor is not permitted to 
     coerce you into reaffirming your debts.
       [`` `If you choose to file a chapter 13 case in which you 
     repay your creditors what you can afford over 3 to 5 years, 
     you may also want help with preparing your chapter 13 plan 
     and with the confirmation hearing on your plan which will be 
     before a bankruptcy judge.
       [`` `If you select another type of relief under the 
     Bankruptcy Code other than chapter 7 or chapter 13, you will 
     want to find out what needs to be done from someone familiar 
     with that type of relief.
       [`` `Your bankruptcy case may also involve litigation. You 
     are generally permitted to represent yourself in litigation 
     in bankruptcy court, but only attorneys, not bankruptcy 
     petition preparers, can give you legal advice.'.
       [``(c) Except to the extent the debt relief agency provides 
     the required information itself after reasonably diligent 
     inquiry of the assisted person or others so as to obtain such 
     information reasonably accurately for inclusion on the 
     petition, schedules or statement of financial affairs, a debt 
     relief agency providing bankruptcy assistance to an assisted 
     person, to the extent permitted by nonbankruptcy law, shall 
     provide each assisted person at the time required for the 
     notice required under subsection (a)(1) reasonably sufficient 
     information (which may be provided orally or in a clear and 
     conspicuous writing) to the assisted person on how to provide 
     all the information the assisted person is required to 
     provide under this title pursuant to section 521, including--
       [``(1) how to value assets at replacement value, determine 
     total current monthly income, projected monthly income and, 
     in a case under chapter 13, net monthly income, and related 
     calculations;
       [``(2) how to complete the list of creditors, including how 
     to determine what amount is owed and what address for the 
     creditor should be shown; and
       [``(3) how to--
       [``(A) determine what property is exempt; and
       [``(B) value exempt property at replacement value, as 
     defined in section 506.
       [``(d) A debt relief agency shall maintain a copy of the 
     notices required under subsection (a) of this section for a 
     period of 2 years after the latest date on which the notice 
     is given the assisted person.''.
       [(b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, is amended by 
     inserting after the item relating to section 525 the 
     following:

[``526. Disclosures.''.

     [SEC. 223. DEBTOR'S BILL OF RIGHTS.

       [(a) Debtor's Bill of Rights.--Subchapter II of chapter 5 
     of title 11, United States Code, as amended by section 222 of 
     this Act, is amended by adding at the end the following:

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

       [``(a)(1) A debt relief agency shall--
       [``(A) not later than 5 business days after the first date 
     on which a debt relief agency provides any bankruptcy 
     assistance services to an assisted person, but before that 
     assisted person's petition under this title is filed--
       [``(i) execute a written contract with the assisted person 
     specifying clearly and conspicuously the services the agency 
     will provide the assisted person and the basis on which fees 
     or charges will be made for such services and the terms of 
     payment; and
       [``(ii) give the assisted person a copy of the fully 
     executed and completed contract in a form the person is able 
     to retain;
       [``(B) disclose in any advertisement of bankruptcy 
     assistance services or of the benefits of bankruptcy directed 
     to the general public (whether in general media, seminars or 
     specific mailings, telephonic or electronic messages, or 
     otherwise) that the services or benefits are with respect to 
     proceedings under this title, clearly and conspicuously using 
     the statement: `We are a debt relief agency. We help people 
     file bankruptcy petitions to obtain relief under the 
     Bankruptcy Code.' or a substantially similar statement; and
       [``(C) if an advertisement directed to the general public 
     indicates that the debt relief agency provides assistance 
     with respect to credit defaults, mortgage foreclosures, lease 
     eviction proceedings, excessive debt, debt collection 
     pressure, or inability to pay any consumer debt, disclose 
     conspicuously in that advertisement that the assistance is 
     with respect to or may involve proceedings under this title, 
     using the following statement: `We are a debt relief agency. 
     We help people file bankruptcy petitions to obtain relief 
     under the Bankruptcy Code.' or a substantially similar 
     statement.

[[Page 28386]]

       [``(2) For purposes of paragraph (1)(B), an advertisement 
     shall be of bankruptcy assistance services if that 
     advertisement describes or offers bankruptcy assistance with 
     a plan under chapter 12, without regard to whether chapter 13 
     is specifically mentioned. A statement such as `federally 
     supervised repayment plan' or `Federal debt restructuring 
     help' or any other similar statement that would lead a 
     reasonable consumer to believe that help with debts is being 
     offered when in fact in most cases the help available is 
     bankruptcy assistance with a plan under chapter 13 is a 
     statement covered under the preceding sentence.
       [``(b) A debt relief agency shall not--
       [``(1) fail to perform any service that the debt relief 
     agency has told the assisted person or prospective assisted 
     person the agency would provide that person in connection 
     with the preparation for or activities during a proceeding 
     under this title;
       [``(2) make any statement, or counsel or advise any 
     assisted person to make any statement in any document filed 
     in a proceeding under this title, that--
       [``(A) is untrue and misleading; or
       [``(B) upon the exercise of reasonable care, should be 
     known by the debt relief agency to be untrue or misleading;
       [``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission, what services the debt relief agency may 
     reasonably expect to provide that person, or the benefits an 
     assisted person may obtain or the difficulties the person may 
     experience if the person seeks relief in a proceeding under 
     this title; or
       [``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of that person 
     filing a proceeding under this title or in order to pay an 
     attorney or bankruptcy petition preparer fee or charge for 
     services performed as part of preparing for or representing a 
     debtor in a proceeding under this title.''.
     [(b) Conforming Amendment.--The table of sections for chapter 
     5 of title 11, United States Code, as amended by section 222 
     of this Act, is amended by inserting after the item relating 
     to section 526 of title 11, United States Code, the 
     following:

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

     [SEC. 224. ENFORCEMENT.

       [(a) Enforcement.--Subchapter II of chapter 5 of title 11, 
     United States Code, as amended by section 223 of this Act, is 
     amended by adding at the end the following:

     [``Sec. 528. Debt relief agency enforcement

       [``(a) Any waiver by any assisted person of any protection 
     or right provided by or under section 526 or 527 shall be 
     void and may not be enforced by any Federal or State court or 
     any other person.
       [``(b)(1) Any contract between a debt relief agency and an 
     assisted person for bankruptcy assistance that does not 
     comply with the material requirements of section 526 or 527 
     shall be treated as void and may not be enforced by any 
     Federal or State court or by any other person.
       [``(2) Any debt relief agency that has been found, after 
     notice and hearing, to have--
       [``(A) negligently failed to comply with any provision of 
     section 526 or 527 with respect to a bankruptcy case or 
     related proceeding of an assisted person;
       [``(B) provided bankruptcy assistance to an assisted person 
     in a case or related proceeding which is dismissed or 
     converted because the debt relief agency's negligent failure 
     to file bankruptcy papers, including papers specified in 
     section 521; or
       [``(C) negligently or intentionally disregarded the 
     material requirements of this title or the Federal Rules of 
     Bankruptcy Procedure applicable to such debt relief agency 
     shall be liable to the assisted person in the amount of any 
     fees and charges in connection with providing bankruptcy 
     assistance to such person that the debt relief agency has 
     already been paid on account of that proceeding.
       [``(3) In addition to such other remedies as are provided 
     under State law, whenever the chief law enforcement officer 
     of a State, or an official or agency designated by a State, 
     has reason to believe that any person has violated or is 
     violating section 526 or 527, the State--
       [``(A) may bring an action to enjoin such violation;
       [``(B) may bring an action on behalf of its residents to 
     recover the actual damages of assisted persons arising from 
     such violation, including any liability under paragraph (2); 
     and
       [``(C) in the case of any successful action under 
     subparagraph (A) or (B), shall be awarded the costs of the 
     action and reasonable attorney fees as determined by the 
     court.
       [``(4) The United States District Court for any district 
     located in the State shall have concurrent jurisdiction of 
     any action under subparagraph (A) or (B) of paragraph (3).
       [``(5) Notwithstanding any other provision of Federal law, 
     if the court, on its own motion or on the motion of the 
     United States trustee, finds that a person intentionally 
     violated section 526 or 527, or engaged in a clear and 
     consistent pattern or practice of violating section 526 or 
     527, the court may--
       [``(A) enjoin the violation of such section; or
       [``(B) impose an appropriate civil penalty against such 
     person.
       [``(c) This section and sections 526 and 527 shall not 
     annul, alter, affect, or exempt any person subject to those 
     sections from complying with any law of any State except to 
     the extent that such law is inconsistent with those sections, 
     and then only to the extent of the inconsistency.''.
       [(b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, as amended by 
     section 223 of this Act, is amended by inserting after the 
     item relating to section 527 of title 11, United States Code, 
     the following:

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

     SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY 
                   FILINGS.

       Section 110 of title 11, United States Code, is amended--
       (1) in subsection (a)(1), by inserting ``, under the direct 
     supervision of an attorney,'' after ``who'';
       (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 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.'';
       (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 to 
     debtors concerning bankruptcy petition preparers, which shall 
     be on an official form issued by the Judicial Conference of 
     the United States.
       ``(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--
       ``(aa) the debtor; and
       ``(bb) the bankruptcy petition preparer, under penalty of 
     perjury; 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 
     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 eliminated or 
     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:
       ``(h)(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

[[Page 28387]]

     before preparing any document for filing for a debtor or 
     accepting any fee from the debtor.'';
       (C) in paragraph (2), as redesignated by subparagraph (A) 
     of this paragraph--
       (i) by striking ``Within 10 days after the date of filing 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 redesignated by 
     subparagraph (A) of this paragraph, 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 preparer during the 12-month period 
     immediately preceding the date of 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 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 redesignated by subparagraph (A) 
     of this paragraph, by striking ``or the United States 
     trustee'' and inserting ``the United States trustee, 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) If a bankruptcy petition preparer violates this 
     section or commits any act that the court finds to be 
     fraudulent, unfair, or deceptive, on motion of the debtor, 
     trustee, or United States trustee, and after the court holds 
     a hearing with respect to that violation or act, 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 upon motion of the court, 
     the trustee, or the United States trustee.'';
     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 preparer.
       ``(3) The debtor, the trustee, a creditor, or the United 
     States trustee may file a motion for an order imposing a fine 
     on the bankruptcy petition preparer for each violation of 
     this section.
       ``(4) All fines imposed under this section 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 paragraph shall be available 
     to fund the enforcement of this section on a national 
     basis.''.

     SEC. [225.] 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. [226.] 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED 
                   STATES CODE.

       (a) In General.--Section 507(a) of title 11, United States 
     Code, as amended by section [211] 212 of this Act, is amended 
     by inserting after paragraph (9) the following:
       ``(10) Tenth, allowed claims for death or personal injuries 
     resulting from the operation of a motor vehicle or vessel if 
     such operation was unlawful because the debtor was 
     intoxicated from using alcohol, a drug, or another 
     substance.''.
       (b) Vessels.--Section 523(a)(9) of title 11, United States 
     Code, is amended by inserting ``or vessel'' after 
     ``vehicle''.

     SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

       (a) In General.--Section 522 of title 11, United States 
     Code, as amended by section 215 of this Act, is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)--
       (i) by striking ``(2)(A) any property'' and inserting:
       ``(3) Property listed in this paragraph is--
       ``(A) any property'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(C) retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.'';
       (B) by striking paragraph (1) and inserting:
       ``(2) Property listed in this paragraph is property that is 
     specified under subsection (d), unless the State law that is 
     applicable to the debtor under paragraph (3)(A) specifically 
     does not so authorize.'';
       (C) in the matter preceding paragraph (2)--
       (i) by striking ``(b)'' and inserting ``(b)(1)'';
       (ii) by striking ``paragraph (2)'' both places it appears 
     and inserting ``paragraph (3)'';
       (iii) by striking ``paragraph (1)'' each place it appears 
     and inserting ``paragraph (2)''; and
       (iv) by striking ``Such property is--''; and
       (D) by adding at the end of the subsection the following:
       ``(4) For purposes of paragraph (3)(C) and subsection 
     (d)(12), the following shall apply:
       ``(A) If the retirement funds are in a retirement fund that 
     has received a favorable determination pursuant to section 
     7805 of the Internal Revenue Code of 1986, and that 
     determination is in effect as of the date of the commencement 
     of the case under section 301, 302, or 303 of this title, 
     those funds shall be presumed to be exempt from the estate.
       ``(B) If the retirement funds are in a retirement fund that 
     has not received a favorable determination pursuant to such 
     section 7805, those funds are exempt from the estate if the 
     debtor demonstrates that--
       ``(i) no prior determination to the contrary has been made 
     by a court or the Internal Revenue Service; and
       ``(ii)(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, pursuant to section 401(a)(31) of the Internal 
     Revenue Code of 1986, or otherwise, shall not cease to 
     qualify for exemption under paragraph (3)(C) or subsection 
     (d)(12) by reason of that direct transfer.
       ``(D)(i) Any distribution that qualifies as an eligible 
     rollover distribution within the meaning of section 402(c) of 
     the Internal Revenue Code of 1986 or that is described in 
     clause (ii) shall not cease to qualify for exemption under 
     paragraph (3)(C) or subsection (d)(12) by reason of that 
     distribution.
       ``(ii) A distribution described in this clause is an amount 
     that--
       ``(I) has been distributed from a fund or account that is 
     exempt from taxation under section 401, 403, 408, 408A, 414, 
     457, or 501(a) of the Internal Revenue Code of 1986; and
       ``(II) to the extent allowed by law, is deposited in such a 
     fund or account not later than 60 days after the distribution 
     of that amount.''; and
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``subsection (b)(1)'' and inserting ``subsection (b)(2)''; 
     and
       (B) by adding at the end the following:
       ``(12) Retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by section 214 of this Act, is 
     amended--
       (1) in paragraph (18), by striking ``or'' at the end;
       (2) in paragraph (19), by striking the period and inserting 
     ``; or'';
       (3) by inserting after paragraph (19) the following:
       ``(20) under subsection (a), of withholding of income from 
     a debtor's wages and collection of amounts withheld, pursuant 
     to the debtor's agreement authorizing that withholding and 
     collection for the benefit of a pension, profit-sharing, 
     stock bonus, or other plan established under section 401, 
     403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue 
     Code of 1986 that is sponsored by the employer of the debtor, 
     or an affiliate, successor, or predecessor of such employer--
       ``(A) to the extent that the amounts withheld and collected 
     are used solely for payments relating to a loan from a plan 
     that satisfies the requirements of section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974 or is subject 
     to section 72(p) of the Internal Revenue Code of 1986; or

[[Page 28388]]

       ``(B) in the case of a loan from a thrift savings plan 
     described in subchapter III of title 5, that satisfies the 
     requirements of section 8433(g) of such title;''; and
       (4) by adding at the end of the flush material at the end 
     of the subsection, the following: ``Nothing in paragraph (20) 
     may be construed to provide that any loan made under a 
     governmental plan under section 414(d), or a contract or 
     account under section 403(b), of the Internal Revenue Code of 
     1986 constitutes a claim or a debt under this title.''.
       (c) Exceptions To Discharge.--Section 523(a) of title 11, 
     United States Code, is amended--
       (1) by striking ``or'' at the end of paragraph (17);
       (2) by striking the period at the end of paragraph (18) and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(19) owed to a pension, profit-sharing, stock bonus, or 
     other plan established under section 401, 403, 408, 408A, 
     414, 457, or 501(c) of the Internal Revenue Code of 1986, 
     pursuant to--
       ``(A) a loan permitted under section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974, or subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) a loan from the thrift savings plan described in 
     subchapter III of title 5, that satisfies the requirements of 
     section 8433(g) of such title.
     Nothing in paragraph (19) may be construed to provide that 
     any loan made under a governmental plan under section 414(d), 
     or a contract or account under section 403(b), of the 
     Internal Revenue Code of 1986 constitutes a claim or a debt 
     under this title.''
       (d) Plan Contents.--Section 1322 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(f) A plan may not materially alter the terms of a loan 
     described in section 362(b)(20).''.

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

     SEC. 301. REINFORCEMENT OF THE FRESH START.

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

     SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.

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

       ``(I) more than 1 previous case under any of chapter 7, 11, 
     or 13 in which the individual was a debtor was pending within 
     the preceding 1-year period;
       ``(II) a previous case under any of chapter 7, 11, or 13 in 
     which the individual was a debtor was dismissed within such 
     1-year period, after the debtor failed to--

       ``(aa) file or amend the petition or other documents as 
     required by this title or the court without substantial 
     excuse (but mere inadvertence or negligence shall not be a 
     substantial excuse unless the dismissal was caused by the 
     negligence of the debtor's attorney);
       ``(bb) provide adequate protection as ordered by the court; 
     or
       ``(cc) perform the terms of a plan confirmed by the court; 
     or

       ``(III) there has not been a substantial change in the 
     financial or personal affairs of the debtor since the 
     dismissal of the next most previous case under chapter 7, 11, 
     or 13 [of this title], or any other reason to conclude that 
     the later case will be concluded--

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

     SEC. 303. CURBING ABUSIVE FILINGS.

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

     If recorded in compliance with applicable State laws 
     governing notices of interests or liens in real property, an 
     order entered under this subsection shall be binding in any 
     other case under this title purporting to affect the real 
     property filed not later than 2 years after that recording, 
     except that a debtor in a subsequent case may move for relief 
     from such order based upon changed circumstances or for good 
     cause shown, after notice and a hearing.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by section [213] 224 of this Act, is 
     amended--
       (1) in paragraph (19), by striking ``or'' at the end;
       (2) in paragraph (20), by striking the period at the end; 
     and
       (3) by inserting after paragraph (20) the following:
       ``(21) under subsection (a), of any act to enforce any lien 
     against or security interest in real property following the 
     entry of an order under section 362(d)(4) as to that property 
     in any prior bankruptcy case for a period of 2 years after 
     entry of such an order, except that the debtor, in a 
     subsequent case, may move the court for relief from such 
     order based upon changed circumstances or for other good 
     cause shown, after notice and a hearing; or
       ``(22) under subsection (a), of any act to enforce any lien 
     against or security interest in real property--
       ``(A) if the debtor is ineligible under section 109(g) to 
     be a debtor in a bankruptcy case; or
       ``(B) if the bankruptcy case was filed in violation of a 
     bankruptcy court order in a

[[Page 28389]]

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

     SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

       Title 11, United States Code, is amended--
       (1) in section 521(a), as so redesignated by section 105(d) 
     of this Act--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(6) in an individual case under chapter 7 [of this 
     title], not retain possession of personal property as to 
     which a creditor has an allowed claim for the purchase price 
     secured in whole or in part by an interest in that personal 
     property unless, in the case of an individual debtor, the 
     debtor within 45 days after the first meeting of creditors 
     under section 341(a)--
       ``(A) enters into an agreement with the creditor under 
     section 524(c) with respect to the claim secured by such 
     property; or
       ``(B) redeems such property from the security interest 
     under section 722.''; and
       (C) by adding at the end the following:
       ``(b) [If the debtor] For purposes of subsection (a)(6), if 
     the debtor fails to so act within the 45-day period specified 
     in subsection (a)(6), the personal property affected shall no 
     longer be property of the estate, and the creditor may take 
     whatever action as to such property as is permitted by 
     applicable nonbankruptcy law, unless the court determines on 
     the motion of the trustee, and after notice and a hearing, 
     that such property is of consequential value or benefit to 
     the estate.''; and
       (2) in section 722, by inserting ``in full at the time of 
     redemption'' before the period at the end.

     SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES 
                   NOT COMPLETE INTENDED SURRENDER OF CONSUMER 
                   DEBT COLLATERAL.

       Title 11, United States Code, is amended--
       (1) in section 362--
       (A) in subsection (c), by striking ``(e), and (f)'' and 
     inserting ``(e), (f), and (h)''; and
       (B) by redesignating subsection (h), as amended by section 
     227 of this Act, as subsection (j) and by inserting after 
     subsection (g) the following:
       ``(h)(1) Subject to paragraph (2), in an individual case 
     under chapter 7, 11, or 13 the stay provided by subsection 
     (a) is terminated with respect to property of the estate 
     securing in whole or in part a claim, or subject to an 
     unexpired lease, if the debtor fails within the applicable 
     period of time set by section 521(a)(2) to--
       ``(A) file timely any statement of intention required under 
     section 521(a)(2) with respect to that property or to 
     indicate therein that the debtor--
       ``(i) will either surrender the property or retain the 
     property; and
       ``(ii) if retaining the property, will, as applicable--
       ``(I) redeem the property under section 722;
       ``(II) reaffirm the debt the property secures under section 
     524(c); or
       ``(III) assume the unexpired lease under section 365(p) if 
     the trustee does not do so; or
       ``(B) take timely the action specified in that statement of 
     intention, as the statement may be amended before expiration 
     of the period for taking action, unless the statement of 
     intention specifies reaffirmation and the creditor refuses to 
     reaffirm on the original contract terms.
       ``(2) Paragraph (1) shall not apply if the court determines 
     on the motion of the trustee, and after notice and a hearing, 
     that such property is of consequential value or benefit to 
     the estate.''; and
       (2) in section 521, as amended by section 304 of this Act--
       (A) in subsection (a)(2), as redesignated by section 105(d) 
     of this Act--
       (i) by striking ``consumer'';
       (ii) in subparagraph (B)--

       (I) by striking ``forty-five days after the filing of a 
     notice of intent under this section'' and inserting ``30 days 
     after the first date set for the meeting of creditors under 
     section 341(a)''; and
       (II) by striking ``forty-five day period'' and inserting 
     ``30-day period''; and

       (iii) in subparagraph (C), by inserting ``except as 
     provided in section 362(h)'' before the semicolon; and
       (B) by adding at the end the following:
       ``(c) If the debtor fails timely to take the action 
     specified in subsection (a)(6), or in paragraph (1) or (2) of 
     section 362(h), with respect to property which a lessor or 
     bailor owns and has leased, rented, or bailed to the debtor 
     or as to which a creditor holds a security interest not 
     otherwise voidable under section 522(f), 544, 545, 547, 548, 
     or 549, nothing in this title shall prevent or limit the 
     operation of a provision in the underlying lease or agreement 
     that has the effect of placing the debtor in default under 
     that lease or agreement by reason of the occurrence, 
     pendency, or existence of a proceeding under this title or 
     the insolvency of the debtor. Nothing in this subsection 
     shall be deemed to justify limiting such a provision in any 
     other circumstance.''.

     SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 
                   13.

       (a) In General.--Section 1325(a)(5)(B)(i) of title 11, 
     United States Code, is amended to read as follows:
       ``(i) the plan provides that--
       ``(I) the holder of such claim retain the lien securing 
     such claim until the earlier of--

       ``(aa) the payment of the underlying debt determined under 
     nonbankruptcy law; or
       ``(bb) discharge under section 1328; and

       ``(II) if the case under this chapter is dismissed or 
     converted without completion of the plan, such lien shall 
     also be retained by such holder to the extent recognized by 
     applicable nonbankruptcy law; and''.
       (b) Restoring the Foundation for Secured Credit.--Section 
     1325(a) of title 11, United States Code, is amended by adding 
     at the end the following flush sentence:
     ``For purposes of paragraph (5), section 506 shall not apply 
     to a claim described in that paragraph if the debt that is 
     the subject of the claim was incurred within the 5-year 
     period preceding the filing of the petition and the 
     collateral for that debt consists of a motor vehicle (as 
     defined in section 30102 of title 49) acquired for the 
     personal use of the debtor, or if collateral for that debt 
     consists of any other thing of value, if the debt was 
     incurred during the 6-month period preceding that filing.''.
       (c) Definitions.--Section 101 of title 11, United States 
     Code, as amended by section [221] 211 of this Act, is 
     amended--
       (1) by inserting after paragraph (13) the following:
       ``(13A) `debtor's principal residence'--
       ``(A) means a residential structure, including incidental 
     property, without regard to whether that structure is 
     attached to real property; and
       ``(B) includes an individual condominium or cooperative 
     unit;''; and
       (2) by inserting after paragraph (27), the following:
       ``(27A) `incidental property' means, with respect to a 
     debtor's principal residence--
       ``(A) property commonly conveyed with a principal residence 
     in the area where the real estate is located;
       ``(B) all easements, rights, appurtenances, fixtures, 
     rents, royalties, mineral rights, oil or gas rights or 
     profits, water rights, escrow funds, or insurance proceeds; 
     and
       ``(C) all replacements or additions;''.

     SEC. 307. EXEMPTIONS.

       Section [522(b)(2)(A)] 522(b)(3)(A) of title 11, United 
     States Code, as so designated by section 224 of this Act, is 
     amended--
       (1) by striking ``180'' and inserting ``730''; and
       (2) by striking ``, or for a longer portion of such 180-day 
     period than in any other place''.

     SEC. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EXEMPTION.

       Section 522 of title 11, United States Code, as amended by 
     section 307 of this Act, is amended--
       (1) in subsection [(b)(2)(A)] (b)(3)(A), by inserting 
     ``subject to subsection (n),'' before ``any property''; and
       (2) by adding at the end the following:
       ``(n) For purposes of subsection [(b)(2)(A)] (b)(3)(A), and 
     notwithstanding subsection (a), the value of an interest in--
       ``(1) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(2) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(3) a burial plot for the debtor or a dependent of the 
     debtor;

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

     SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.

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

[[Page 28390]]

       (b) Giving Debtors the Ability To Keep Leased Personal 
     Property by Assumption.--Section 365 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(p)(1) If a lease of personal property is rejected or not 
     timely assumed by the trustee under subsection (d), the 
     leased property is no longer property of the estate and the 
     stay under section 362(a) is automatically terminated.
       ``(2)(A) In the case of an individual under chapter 7, the 
     debtor may notify the creditor in writing that the debtor 
     desires to assume the lease. Upon being so notified, the 
     creditor may, at its option, notify the debtor that it is 
     willing to have the lease assumed by the debtor and may 
     condition such assumption on cure of any outstanding default 
     on terms set by the contract.
       ``(B) If within 30 days after notice is provided under 
     subparagraph (A), the debtor notifies the lessor in writing 
     that the lease is assumed, the liability under the lease will 
     be assumed by the debtor and not by the estate.
       ``(C) The stay under section 362 and the injunction under 
     section 524(a)(2) shall not be violated by notification of 
     the debtor and negotiation of cure under this subsection.
       ``(3) In a case under chapter 11 [of this title] in which 
     the debtor is an individual and in a case under chapter 13 
     [of this title], if the debtor is the lessee with respect to 
     personal property and the lease is not assumed in the plan 
     confirmed by the court, the lease is deemed rejected as of 
     the conclusion of the hearing on confirmation. If the lease 
     is rejected, the stay under section 362 and any stay under 
     section 1301 is automatically terminated with respect to the 
     property subject to the lease.''.
       (c) Adequate Protection of Lessors and Purchase Money 
     Secured Creditors.--
       [(1) In general.--Subchapter I of chapter 13 of title 11, 
     United States Code, is amended by inserting after section 
     1307 the following:

     [``Sec. 1308. Adequate protection in chapter 13 cases

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

[``1308. Adequate protection in chapter 13 cases.''.]
       (1) Confirmation of plan.--Section 1325(a)(5)(B) of title 
     11, United States Code, 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--
       ``(A) commence making the payments proposed by a plan 
     within 30 days after the plan is filed; or
       ``(B) if no plan is filed then as specified in the proof of 
     claim, within 30 days after the order for relief or within 15 
     days after the plan is filed, whichever is earlier.
       ``(2) A payment made under this section shall be retained 
     by the trustee until confirmation, denial of confirmation, or 
     paid by the trustee as adequate protection payments in 
     accordance with paragraph (3). 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 to creditors pursuant to paragraph (3) to the 
     debtor, after deducting any unpaid claim allowed under 
     section 503(b).
       ``(3)(A) As soon as is practicable, and not later than 40 
     days after the filing of the case, the trustee shall--
       ``(i) pay from payments made under this section the 
     adequate protection payments proposed in the plan; or
       ``(ii) if no plan is filed then, according to the terms of 
     the proof of claim.
       ``(B) The court may, upon notice and a hearing, modify, 
     increase, or reduce the payments required under this 
     paragraph pending confirmation of a plan.''.

     SEC. 310. LIMITATION ON LUXURY GOODS.

       Section 523(a)(2)(C) of title 11, United States Code, is 
     amended to read as follows:
       ``(C)(i) for purposes of subparagraph (A)--
       ``(I) consumer debts owed to a single creditor and 
     aggregating more than $250 for luxury goods or services 
     incurred by an individual debtor on or within 90 days before 
     the order for relief under this title are presumed to be 
     nondischargeable; and
       ``(II) cash advances aggregating more than $750 that are 
     extensions of consumer credit under an open end credit plan 
     obtained by an individual debtor on or within 70 days before 
     the order for relief under this title, are presumed to be 
     nondischargeable; and
       ``(ii) for purposes of this subparagraph--
       ``(I) the term `extension of credit under an open end 
     credit plan' means an extension of credit under an open end 
     credit plan, within the meaning of the Consumer Credit 
     Protection Act (15 U.S.C. 1601 et seq.);
       ``(II) the term `open end credit plan' has the meaning 
     given that term under section 103 of Consumer Credit 
     Protection Act (15 U.S.C. 1602); and
       ``(III) the term `luxury goods or services' does not 
     include goods or services reasonably necessary for the 
     support or maintenance of the debtor or a dependent of the 
     debtor.''.

     SEC. 311. AUTOMATIC STAY.

       Section 362(b) of title 11, United States Code, as amended 
     by section 303(b) of this Act, is amended--
       (1) in paragraph (21), by striking ``or'' at the end;
       (2) in paragraph (22), by striking the period at the end 
     and inserting a semicolon; and
       (3) by inserting after paragraph (22) the following:
       ``(23) under subsection (a)(3), of the continuation of any 
     eviction, unlawful detainer action, or similar proceeding by 
     a lessor against a debtor involving residential real property 
     in which the debtor resides as a tenant under a rental 
     agreement;
       ``(24) under subsection (a)(3), of the commencement of any 
     eviction, unlawful detainer action, or similar proceeding by 
     a lessor against a debtor involving residential real property 
     in which the debtor resides as a tenant under a rental 
     agreement that has terminated under the lease agreement or 
     applicable State law; or
       ``(25) under subsection (a)(3), of eviction actions based 
     on endangerment to property or person or the use of illegal 
     drugs.''.

     SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

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

     SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

       Section 522(f) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(4)(A) Subject to subparagraph (B), for purposes of 
     paragraph (1)(B), the term `household goods' means--

[[Page 28391]]

       ``(i) clothing;
       ``(ii) furniture;
       ``(iii) appliances;
       ``(iv) 1 radio;
       ``(v) 1 television;
       ``(vi) 1 VCR;
       ``(vii) linens;
       ``(viii) china;
       ``(ix) crockery;
       ``(x) kitchenware;
       ``(xi) educational materials and educational equipment 
     primarily for the use of minor dependent children of the 
     debtor, but only 1 personal computer only if used primarily 
     for the education or entertainment of such minor children;
       ``(xii) medical equipment and supplies;
       ``(xiii) furniture exclusively for the use of minor 
     children, or elderly or disabled dependents of the debtor; 
     and
       ``(xiv) personal effects (including wedding rings and the 
     toys and hobby equipment of minor dependent children) of the 
     debtor and the dependents of the debtor.
       ``(B) The term `household goods' does not include--
       ``(i) works of art (unless by or of the debtor or the 
     dependents of the debtor);
       ``(ii) electronic entertainment equipment (except 1 
     television, 1 radio, and 1 VCR);
       ``(iii) items acquired as antiques;
       ``(iv) jewelry (except wedding rings); and
       ``(v) a computer (except as otherwise provided for in this 
     section), motor vehicle (including a tractor or lawn 
     tractor), boat, or a motorized recreational device, 
     conveyance, vehicle, watercraft, or aircraft.''.

     SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.

       Section 523(a) of title 11, United States Code, is amended 
     by inserting after paragraph (14) the following:
       ``(14A)(A) incurred to pay a debt that is nondischargeable 
     by reason of section 727, 1141, 1228(a), 1228(b), or 1328(b), 
     or any other provision of this subsection, if the debtor 
     incurred the debt to pay such a nondischargeable debt with 
     the intent to discharge in bankruptcy the newly created debt; 
     except that
       ``(B) [except that] all debts incurred to pay 
     nondischargeable debts shall be presumed to be 
     nondischargeable debts if incurred within 70 days before the 
     filing of the petition (except that, in any case in which 
     there is an allowed claim under section 502 for child support 
     or spousal support entitled to priority under section 
     507(a)(1) and that was filed in a timely manner, debts that 
     would otherwise be presumed to be nondischargeable debts by 
     reason of this subparagraph shall be treated as dischargeable 
     debts);''.
       (b) Discharge Under Chapter 13.
       Section 1328(a) of title 11, United States Code, is amended 
     by striking paragraphs (1) through (3) and inserting the 
     following:
       ``(1) provided for under section 1322(b)(5);
       ``(2) of the kind specified in paragraph (2), (4), (3)(B), 
     (5), (8), or (9) of section 523(a);
       ``(3) for restitution, or a criminal fine, included in a 
     sentence on the debtor's conviction of a crime; or
       ``(4) for restitution, or damages, awarded in a civil 
     action against the debtor as a result of willful or malicious 
     injury by the debtor that caused personal injury to an 
     individual or the death of an individual.''.

     SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13 
                   CASES.

       (a) Notice.--Section 342 of title 11, United States Code, 
     is amended--
       (1) in subsection (c)--
       (A) by inserting ``(1)'' after ``(c)''; and
       (B) by striking ``, but the failure of such notice to 
     contain such information shall not invalidate the legal 
     effect of such notice''; and
       (2) by adding at the end the following:
       ``(d) At any time, a creditor, in a case of an individual 
     debtor under chapter 7 or 13, may file with the court and 
     serve on the debtor a notice of the address to be used to 
     notify the creditor in that case. Five days after receipt of 
     such notice, if the court or the debtor is required to give 
     the creditor notice, such notice shall be given at that 
     address.
       ``(e) An entity may file with the court a notice stating 
     its address for notice in cases under chapters 7 and 13. 
     After 30 days following the filing of such notice, any notice 
     in any case filed under chapter 7 or 13 given by the court 
     shall be to that address unless specific notice is given 
     under subsection (d) with respect to a particular case.
       ``(f)(1) Notice given to a creditor other than as provided 
     in this section shall not be effective notice until that 
     notice has been brought to the attention of the creditor. If 
     the creditor designates a person or department to be 
     responsible for receiving notices concerning bankruptcy cases 
     and establishes reasonable procedures so that bankruptcy 
     notices received by the creditor are to be delivered to such 
     department or person, notice shall not be considered to have 
     been brought to the attention of the creditor until received 
     by such person or department.
       ``(2) No sanction under section 362(h) or any other 
     sanction that a court may impose on account of violations of 
     the stay under section 362(a) or failure to comply with 
     section 542 or 543 may be imposed on any action of the 
     creditor unless the action takes place after the creditor has 
     received notice of the commencement of the case effective 
     under this section.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by section 305 of this Act, is 
     amended--
       (1) in subsection (a), by striking paragraph (1) and 
     inserting the following:
       ``(1) file--
       ``(A) a list of creditors; and
       ``(B) unless the court orders otherwise--
       ``(i) a schedule of assets and liabilities;
       ``(ii) a schedule of current income and current 
     expenditures;
       ``(iii) a statement of the debtor's financial affairs and, 
     if applicable, a certificate--

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

       ``(iv) copies of any Federal tax returns, including any 
     schedules or attachments, filed by the debtor for the 3-year 
     period preceding the order for relief;
       ``(v) copies of all payment advices or other evidence of 
     payment, if any, received by the debtor from any employer of 
     the debtor in the period 60 days before the filing of the 
     petition;
       ``(vi) a statement of the amount of projected monthly net 
     income, itemized to show how the amount is calculated; and
       ``(vii) a statement disclosing any reasonably anticipated 
     increase in income or expenditures over the 12-month period 
     following the date of filing;''; and
       (2) by adding at the end the following:
       ``(d)(1) At any time, a creditor, in the case of an 
     individual under chapter 7 or 13, may file with the court 
     notice that the creditor requests the petition, schedules, 
     and a statement of affairs filed by the debtor in the case 
     and the court shall make those documents available to the 
     creditor who requests those documents.
       ``(2)(A) At any time, a creditor in a case under chapter 13 
     may file with the court notice that the creditor requests the 
     plan filed by the debtor in the case.
       ``(B) The court shall make such plan available to the 
     creditor who requests such plan--
       ``(i) at a reasonable cost; and
       ``(ii) not later than 5 days after such request.
       ``(e) An individual debtor in a case under chapter 7 or 13 
     shall file with the court--
       ``(1) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, with respect 
     to the period from the commencement of the case until such 
     time as the case is closed;
       ``(2) at the time filed with the taxing authority, all tax 
     returns, including any schedules or attachments, that were 
     not filed with the taxing authority when the schedules under 
     subsection (a)(1) were filed with respect to the period that 
     is 3 years before the order for relief;
       ``(3) any amendments to any of the tax returns, including 
     schedules or attachments, described in paragraph (1) or (2); 
     and
       ``(4) in a case under chapter 13, a statement subject to 
     the penalties of perjury by the debtor of the debtor's income 
     and expenditures in the preceding tax year and monthly 
     income, that shows how the amounts are calculated--
       ``(A) beginning on the date that is the later of 90 days 
     after the close of the debtor's tax year or 1 year after the 
     order for relief, unless a plan has been confirmed; and
       ``(B) thereafter, on or before the date that is 45 days 
     before each anniversary of the confirmation of the plan until 
     the case is closed.
       ``(f)(1) A statement referred to in subsection (e)(4) shall 
     disclose--
       ``(A) the amount and sources of income of the debtor;
       ``(B) the identity of any person responsible with the 
     debtor for the support of any dependent of the debtor; and
       ``(C) the identity of any person who contributed, and the 
     amount contributed, to the household in which the debtor 
     resides.
       ``(2) The tax returns, amendments, and statement of income 
     and expenditures described in paragraph (1) shall be 
     available to the United States trustee, any bankruptcy 
     administrator, any trustee, and any party in interest for 
     inspection and copying, subject to the requirements of 
     subsection [(f)] (g).
       ``(g)(1) Not later than 30 days after the date of enactment 
     of the Bankruptcy Reform Act of 1999, the Director of the 
     Administrative Office of the United States Courts shall 
     establish procedures for safeguarding the confidentiality of 
     any tax information required to be provided under this 
     section.
       ``(2) The procedures under paragraph (1) shall include 
     restrictions on creditor access to tax information that is 
     required to be provided under this section.
       ``(3) Not later than 1 year after the date of enactment of 
     the Bankruptcy Reform Act of 1999, the Director of the 
     Administrative Office of the United States Courts shall 
     prepare and submit to Congress a report that--
       ``(A) assesses the effectiveness of the procedures under 
     paragraph (1); and
       ``(B) if appropriate, includes proposed legislation to--

[[Page 28392]]

       ``(i) further protect the confidentiality of tax 
     information; and
       ``(ii) provide penalties for the improper use by any person 
     of the tax information required to be provided under this 
     section.
       ``(h) If requested by the United States trustee or a 
     trustee serving in the case, the debtor shall provide--
       ``(1) a document that establishes the identity of the 
     debtor, including a driver's license, passport, or other 
     document that contains a photograph of the debtor; and
       ``(2) such other personal identifying information relating 
     to the debtor that establishes the identity of the debtor.''.

     SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR 
                   PROVIDE REQUIRED INFORMATION.

       Section 521 of title 11, United States Code, as amended by 
     section 315 of this Act, is amended by adding at the end the 
     following:
       ``(i)(1) Notwithstanding section 707(a), and subject to 
     paragraph (2), if an individual debtor in a voluntary case 
     under chapter 7 or 13 fails to file all of the information 
     required under subsection (a)(1) within 45 days after the 
     filing of the petition commencing the case, the case shall be 
     automatically dismissed effective on the 46th day after the 
     filing of the petition.
       ``(2) With respect to a case described in paragraph (1), 
     any party in interest may request the court to enter an order 
     dismissing the case. If requested, the court shall enter an 
     order of dismissal not later than 5 days after such request.
       ``(3) Upon request of the debtor made within 45 days after 
     the filing of the petition commencing a case described in 
     paragraph (1), the court may allow the debtor an additional 
     period of not to exceed 45 days to file the information 
     required under subsection (a)(1) if the court finds 
     justification for extending the period for the filing.''.

     SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON 
                   CONFIRMATION OF THE PLAN.

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

     ``Sec. 1321. Filing of plan

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

     SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN 
                   CERTAIN CASES.

       Section 1322(d) of title 11, United States Code, is amended 
     to read as follows:
       ``(d)(1) Except as provided in paragraph (2), the plan may 
     not provide for payments over a period that is longer than 3 
     years.
       ``(2) The plan may provide for payments over a period that 
     is longer than 3 years if--
       ``(A) the plan is for a case that was converted to a case 
     under this chapter from a case under chapter 7, or the plan 
     is for a debtor who has been dismissed from chapter 7 by 
     reason of section 707(b), in which case the plan shall 
     provide for payments over a period of 5 years; or
       ``(B) the plan is for a case that is not described in 
     subparagraph (A), and the court, for cause, approves a period 
     longer than 3 years, but not to exceed 5 years.''.

     SEC. 319. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE 
                   9011 OF THE FEDERAL RULES OF BANKRUPTCY 
                   PROCEDURE.

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

     SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.

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

     SEC. 321. TREATMENT OF CERTAIN EARNINGS OF AN INDIVIDUAL 
                   DEBTOR WHO FILES A VOLUNTARY CASE UNDER CHAPTER 
                   11.

       Section 541(a)(6) of title 11, United States Code, is 
     amended by inserting ``(other than an individual debtor who, 
     in accordance with section 301, files a petition to commence 
     a voluntary case under chapter 11)'' after ``individual 
     debtor''.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

     SEC. 401. ROLLING STOCK EQUIPMENT.

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

     ``Sec. 1168. Rolling stock equipment

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

[[Page 28393]]

       ``(e) With respect to equipment first placed in service 
     after October 22, 1994, for purposes of this section, the 
     term `rolling stock equipment' includes rolling stock 
     equipment that is substantially rebuilt and accessories used 
     on such equipment.''.
       (b) Aircraft Equipment and Vessels.--Section 1110 of title 
     11, United States Code, is amended to read as follows:

     ``Sec. 1110. Aircraft equipment and vessels

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

     SEC. 402. ADEQUATE PROTECTION FOR INVESTORS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, as amended by section 306(c) of this Act, is amended by 
     inserting after paragraph (48) the following:
       ``(48A) `securities self regulatory organization' means 
     either a securities association registered with the 
     Securities and Exchange Commission under section 15A of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o-3) or a 
     national securities exchange registered with the Securities 
     and Exchange Commission under section 6 of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78f);''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by section 311 of this Act, is 
     amended--
       (1) in paragraph (24), by striking ``or'' at the end;
       (2) in paragraph (25), by striking the period at the end 
     and inserting ``; or''; and
       (3) by inserting after paragraph (25) the following:
       ``(26) under subsection (a), of--
       ``(A) the commencement or continuation of an investigation 
     or action by a securities self regulatory organization to 
     enforce such organization's regulatory power;
       ``(B) the enforcement of an order or decision, other than 
     for monetary sanctions, obtained in an action by the 
     securities self regulatory organization to enforce such 
     organization's regulatory power; or
       ``(C) any act taken by the securities self regulatory 
     organization to delist, delete, or refuse to permit quotation 
     of any stock that does not meet applicable regulatory 
     requirements.''.

     SEC. 403. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.

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

     SEC. 404. PROTECTION OF REFINANCE OF SECURITY INTEREST.

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

     SEC. 405. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

       Section 365(d)(4) of title 11, United States Code, is 
     amended to read as follows:
       ``(4)(A) Subject to subparagraph (B), in any case under any 
     chapter of this title, an unexpired lease of nonresidential 
     real property under which the debtor is the lessee shall be 
     deemed rejected and the trustee shall immediately surrender 
     that nonresidential real property to the lessor if the 
     trustee does not assume or reject the unexpired lease by the 
     earlier of--
       ``(i) the date that is 120 days after the date of the order 
     for relief; or
       ``(ii) the date of the entry of an order confirming a plan.
       ``(B) The court may extend the period determined under 
     subparagraph (A) only upon a motion of the lessor.''.

     SEC. 406. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

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

     SEC. 407. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES 
                   CODE.

       Section 546 of title 11, United States Code, is amended--
       (1) by redesignating the second subsection designated as 
     subsection (g) (as added by section 222(a) of Public Law 103-
     394) as subsection (i); and
       (2) by adding at the end the following:
       ``(j)(1) Notwithstanding section 545 (2) and (3), the 
     trustee may not avoid a warehouseman's lien for storage, 
     transportation or other costs incidental to the storage and 
     handling of goods.
       ``(2) The prohibition under paragraph (1) shall be applied 
     in a manner consistent with any applicable State statute that 
     is similar to section 7-209 of the Uniform Commercial 
     Code.''.

     SEC. 408. LIMITATION.

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

     SEC. 409. AMENDMENT TO SECTION 330(A) OF TITLE 11, UNITED 
                   STATES CODE.

       Section 330(a)(3) of title 11, United States Code, is 
     amended--
       (1) by striking ``(A) the; and inserting ``(i) the'';
       (2) by striking ``(B)'' and inserting ``(ii)'';
       (3) by striking ``(C)'' and inserting ``(iii)'';
       (4) by striking ``(D)'' and inserting ``(iv)'';
       (5) by striking ``(E)'' and inserting ``(v)'';
       (6) in subparagraph (A), by inserting ``to an examiner, 
     trustee under chapter 11, or professional person'' after 
     ``awarded''; and
       (7) by adding at the end the following:

[[Page 28394]]

       ``(B) In determining the amount of reasonable compensation 
     to be awarded a trustee, the court shall treat such 
     compensation as a commission based on the results 
     achieved.''.

     SEC. 410. POSTPETITION DISCLOSURE AND SOLICITATION.

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

     SEC. 411. PREFERENCES.

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

     SEC. 412. VENUE OF CERTAIN PROCEEDINGS.

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

     SEC. 413. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

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

     SEC. 414. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

       Section 523(a)(16) of title 11, United States Code, is 
     amended--
       (1) by striking ``dwelling'' the first place it appears;
       (2) by striking ``ownership or'' and inserting 
     ``ownership,'';
       (3) by striking ``housing'' the first place it appears; and
       (4) by striking ``but only'' and all that follows through 
     ``but nothing in this paragraph'' and inserting ``or a lot in 
     a homeowners association, for as long as the debtor or the 
     trustee has a legal, equitable, or possessory ownership 
     interest in such unit, such corporation, or such lot, and 
     until such time as the debtor or trustee has surrendered any 
     legal, equitable or possessory interest in such unit, such 
     corporation, or such lot, but nothing in this paragraph''.

     SEC. 415. CREDITOR REPRESENTATION AT FIRST MEETING OF 
                   CREDITORS.

       Section 341(c) of title 11, United States Code, is amended 
     by inserting after the first sentence the following: 
     ``Notwithstanding any local court rule, provision of a State 
     constitution, any other Federal or State law that is not a 
     bankruptcy law, or other requirement that representation at 
     the meeting of creditors under subsection (a) be by an 
     attorney, a creditor holding a consumer debt or any 
     representative of the creditor (which may include an entity 
     or an employee of an entity and may be a representative for 
     more than 1 creditor) shall be permitted to appear at and 
     participate in the meeting of creditors in a case under 
     chapter 7 or 13, either alone or in conjunction with an 
     attorney for the creditor. Nothing in this subsection shall 
     be construed to require any creditor to be represented by an 
     attorney at any meeting of creditors.''.

     [SEC. 416. ELIMINATION OF CERTAIN FEES PAYABLE IN CHAPTER 11 
                   BANKRUPTCY CASES.

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

     SEC. [417.] 416. DEFINITION OF DISINTERESTED PERSON.

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

     SEC. [418.] 417. FACTORS FOR COMPENSATION OF PROFESSIONAL 
                   PERSONS.

       Section 330(a)(3)(A) of title 11, United States Code, as 
     amended by section 409 of this Act, is amended--
       (1) in [subparagraph (D)] clause (i), by striking ``and'' 
     at the end;
       (2) by redesignating [subparagraph (E)] clause (v) as 
     [subparagraph (F)] clause (vi); and
       (3) by inserting after [subparagraph (D)] clause (iv) the 
     following:
       ``[(E)] (v) with respect to a professional person, whether 
     the person is board certified or otherwise has demonstrated 
     skill and experience in the bankruptcy field;''.

     SEC. [419.] 418. APPOINTMENT OF ELECTED TRUSTEE.

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

     SEC. 419. 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) through (5), 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 20-day period beginning on the date of 
     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 filing of 
     the petition;
       ``(ii) the payment by the debtor of charges for utility 
     service in a timely manner before the date of 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 filing of the 
     petition without notice or order of the court.''.

            Subtitle B--Small Business Bankruptcy Provisions

     SEC. 421. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.

       Section 1125 of title 11, United States Code, is amended by 
     striking subsection (f) and inserting the following:
       ``(f) Notwithstanding subsection (b), in a small business 
     case--
       ``(1) in determining whether a disclosure statement 
     provides adequate information, the court shall consider the 
     complexity of the case, the benefit of additional information 
     to creditors and other parties in interest, and the cost of 
     providing additional information;
       ``(2) the court may determine that the plan itself provides 
     adequate information and that a separate disclosure statement 
     is not necessary;
       ``(3) the court may approve a disclosure statement 
     submitted on standard forms approved by the court or adopted 
     under section 2075 of title 28; and

[[Page 28395]]

       ``(4)(A) the court may conditionally approve a disclosure 
     statement subject to final approval after notice and a 
     hearing;
       ``(B) acceptances and rejections of a plan may be solicited 
     based on a conditionally approved disclosure statement if the 
     debtor provides adequate information to each holder of a 
     claim or interest that is solicited, but a conditionally 
     approved disclosure statement shall be mailed not later than 
     20 days before the date of the hearing on confirmation of the 
     plan; and
       ``(C) the hearing on the disclosure statement may be 
     combined with the hearing on confirmation of a plan.''.

     SEC. 422. DEFINITIONS; EFFECT OF DISCHARGE.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, as amended by section 402 of this Act, is amended by 
     striking paragraph (51C) and inserting the following:
       ``(51C) `small business case' means a case filed under 
     chapter 11 of this title in which the debtor is a small 
     business debtor;
       ``(51D) `small business debtor'--
       ``(A) subject to subparagraph (B), means a person 
     (including any affiliate of such person that is also a debtor 
     under this title) that has aggregate noncontingent, 
     liquidated secured and unsecured debts as of the date of the 
     petition or the order for relief in an amount not more than 
     $4,000,000 (excluding debts owed to 1 or more affiliates or 
     insiders) for a case in which the United States trustee has 
     appointed under section 1102(a)(1) a committee of unsecured 
     creditors that the court has determined is sufficiently 
     active and representative to provide effective oversight of 
     the debtor; and
       ``(B) does not include any member of a group of affiliated 
     debtors that has aggregate noncontingent liquidated secured 
     and unsecured debts in an amount greater than $4,000,000 
     (excluding debt owed to 1 or more affiliates or insiders);''.
       [(b) Effect of Discharge.--Section 524 of title 11, United 
     States Code, as amended by section 204 of this Act, is 
     amended by adding at the end the following:
       [``(j)(1) An individual who is injured by the willful 
     failure of a creditor to substantially comply with the 
     requirements specified in subsections (c) and (d), or by any 
     willful violation of the injunction operating under 
     subsection (a)(2), shall be entitled to recover--
       [``(A) the greater of--
       [``(i) the amount of actual damages; or
       [``(ii) $1,000; and
       [``(B) costs and attorneys' fees.
       [``(2) An action to recover for a violation specified in 
     paragraph (1) may not be brought as a class action.''.
       [(c)] (b) Conforming Amendment.--Section 1102(a)(3) of 
     title 11, United States Code, is amended by inserting 
     ``debtor'' after ``small business''.

     SEC. 423. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

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

     SEC. 424. UNIFORM NATIONAL REPORTING REQUIREMENTS.

       (a) Reporting Required.--
       (1) In general.--Chapter 3 of title 11, United States Code, 
     is amended by inserting after section 307 the following:

     ``Sec. 308. Debtor reporting requirements

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

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

     SEC. 425. UNIFORM REPORTING RULES AND FORMS FOR SMALL 
                   BUSINESS CASES.

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

     SEC. 426. DUTIES IN SMALL BUSINESS CASES.

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

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

       ``In a small business case, a trustee or the debtor in 
     possession, in addition to the duties provided in this title 
     and as otherwise required by law, shall--
       ``(1) append to the voluntary petition or, in an 
     involuntary case, file within 3 days after the date of the 
     order for relief--
       ``(A) its most recent balance sheet, statement of 
     operations, cash-flow statement, Federal income tax return; 
     or
       ``(B) a statement made under penalty of perjury that no 
     balance sheet, statement of operations, or cash-flow 
     statement has been prepared and no Federal tax return has 
     been filed;
       ``(2) attend, through its senior management personnel and 
     counsel, meetings scheduled by the court or the United States 
     trustee, including initial debtor interviews, scheduling 
     conferences, and meetings of creditors convened under section 
     341 unless the court waives that requirement after notice and 
     hearing, upon a finding of extraordinary and compelling 
     circumstances;
       ``(3) timely file all schedules and statements of financial 
     affairs, unless the court, after notice and a hearing, grants 
     an extension, which shall not extend such time period to a 
     date later than 30 days after the date of the order for 
     relief, absent extraordinary and compelling circumstances;
       ``(4) file all postpetition financial and other reports 
     required by the Federal Rules of Bankruptcy Procedure or by 
     local rule of the district court;
       ``(5) subject to section 363(c)(2), maintain insurance 
     customary and appropriate to the industry;
       ``(6)(A) timely file tax returns;
       ``(B) subject to section 363(c)(2), timely pay all 
     administrative expense tax claims, except those being 
     contested by appropriate proceedings being diligently 
     prosecuted; and
       ``(C) subject to section 363(c)(2), establish 1 or more 
     separate deposit accounts not later than 10 business days 
     after the date of order for relief (or as soon thereafter as 
     possible if all banks contacted decline the business) and 
     deposit therein, not later than 1 business day after receipt 
     thereof, all taxes payable for periods beginning after the 
     date the case is commenced that are collected or withheld by 
     the debtor for governmental units, unless the court waives 
     that requirement after notice and hearing, upon a finding of 
     extraordinary and compelling circumstances; and
       ``(7) allow the United States trustee, or a designated 
     representative of the United States trustee, to inspect the 
     debtor's business premises, books, and records at reasonable 
     times, after reasonable prior written notice, unless notice 
     is waived by the debtor.''.
       (b) Technical Amendment.--The table of sections for chapter 
     11, United States Code, is amended by inserting after the 
     item relating to section 1114 the following:

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

     SEC. 427. PLAN FILING AND CONFIRMATION DEADLINES.

       Section 1121 of title 11, United States Code, is amended by 
     striking subsection (e) and inserting the following:
       ``(e) In a small business case--
       ``(1) only the debtor may file a plan until after 90 days 
     after the date of the order for relief, unless that period is 
     --

[[Page 28396]]

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

     SEC. 428. PLAN CONFIRMATION DEADLINE.

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

     SEC. 429. PROHIBITION AGAINST EXTENSION OF TIME.

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

     SEC. 430. DUTIES OF THE UNITED STATES TRUSTEE.

       Section 586(a) of title 28, United States Code, is 
     amended--
       (1) in paragraph (3)--
       (A) in subparagraph (G), by striking ``and'' at the end;
       (B) by redesignating subparagraph (H) as subparagraph (I); 
     and
       (C) by inserting after subparagraph (G) the following:
       ``(H) in small business cases (as defined in section 101 of 
     title 11), performing the additional duties specified in 
     title 11 pertaining to such cases;'';
       (2) in paragraph (5), by striking ``and'' at the end;
       (3) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (4) by inserting after paragraph (6) the following:
       ``(7) in each of such small business cases--
       ``(A) conduct an initial debtor interview as soon as 
     practicable after the entry of order for relief but before 
     the first meeting scheduled under section 341(a) of title 11, 
     at which time the United States trustee shall--
       ``(i) begin to investigate the debtor's viability;
       ``(ii) inquire about the debtor's business plan;
       ``(iii) explain the debtor's obligations to file monthly 
     operating reports and other required reports;
       ``(iv) attempt to develop an agreed scheduling order; and
       ``(v) inform the debtor of other obligations;
       ``(B) if determined to be appropriate and advisable, visit 
     the appropriate business premises of the debtor and ascertain 
     the state of the debtor's books and records and verify that 
     the debtor has filed its tax returns; and
       ``(C) review and monitor diligently the debtor's 
     activities, to identify as promptly as possible whether the 
     debtor will be unable to confirm a plan; and
       ``(8) in any case in which the United States trustee finds 
     material grounds for any relief under section 1112 of title 
     11, the United States trustee shall apply promptly after 
     making that finding to the court for relief.''.

     SEC. 431. SCHEDULING CONFERENCES.

       Section 105(d) of title 11, United States Code, as amended 
     by section 429 of this Act, is amended--
       (1) in the matter preceding paragraph (1), by striking
     ``, may'';
       (2) by striking paragraph (1) and inserting the following:
       ``(1) shall hold such status conferences as are necessary 
     to further the expeditious and economical resolution of the 
     case; and''; and
       (3) in paragraph (2), by striking ``unless inconsistent 
     with another provision of this title or with applicable 
     Federal Rules of Bankruptcy Procedure,'' [and inserting 
     ``may''].

     SEC. 432. SERIAL FILER PROVISIONS.

       Section 362 of title 11, United States Code, is amended--
       (1) in subsection (j), as redesignated by section 305(1) of 
     this Act--
       (A) by striking ``An'' and inserting ``(1) Except as 
     provided in paragraph (2), an''; and
       (B) by adding at the end the following:
       ``(2) If such violation is based on an action taken by an 
     entity in the good faith belief that subsection (h) applies 
     to the debtor, the recovery under paragraph (1) against such 
     entity shall be limited to actual damages.''; and
       (2) by inserting after subsection (j)[, as added by section 
     419 of this Act,] the following:
       ``(k)(1) Except as provided in paragraph (2), the filing of 
     a petition under chapter 11 [of this title] operates as a 
     stay of the acts described in subsection (a) only in an 
     involuntary case involving no collusion by the debtor with 
     creditors and in which the debtor--
       ``(A) is a debtor in a small business case pending at the 
     time the petition is filed;
       ``(B) was a debtor in a small business case that was 
     dismissed for any reason by an order that became final in the 
     2-year period ending on the date of the order for relief 
     entered with respect to the petition;
       ``(C) was a debtor in a small business case in which a plan 
     was confirmed in the 2-year period ending on the date of the 
     order for relief entered with respect to the petition; or
       ``(D) is an entity that has succeeded to substantially all 
     of the assets or business of a small business debtor 
     described in subparagraph (A), (B), or (C).
       ``(2) Paragraph (1) does not apply to the filing of a 
     petition if the debtor proves by a preponderance of the 
     evidence that--
       ``(A) the filing of that petition resulted from 
     circumstances beyond the control of the debtor not 
     foreseeable at the time the case then pending was filed; and
       ``(B) it is more likely than not that the court will 
     confirm a feasible plan, but not a liquidating plan, within a 
     reasonable period of time.''.

     SEC. 433. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND 
                   APPOINTMENT OF TRUSTEE.

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

[[Page 28397]]

     later than 30 days after filing of the motion, and shall 
     decide the motion within 15 days after commencement of the 
     hearing, unless the movant expressly consents to a 
     continuance for a specific period of time or compelling 
     circumstances prevent the court from meeting the time limits 
     established by this paragraph.''.
       (b) Additional Grounds for Appointment of Trustee.--Section 
     1104(a) of title 11, United States Code, is amended--
       (1) in paragraph (1), by striking ``or'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(3) if grounds exist to convert or dismiss the case under 
     section 1112, but the court determines that the appointment 
     of a trustee is in the best interests of creditors and the 
     estate.''.

     SEC. 434. STUDY OF OPERATION OF TITLE 11, UNITED STATES CODE, 
                   WITH RESPECT TO SMALL BUSINESSES.

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

     SEC. 435. PAYMENT OF INTEREST.

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

     SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

       (a) Technical Amendment Relating to Municipalities.--
     Section 921(d) of title 11, United States Code, is amended by 
     inserting ``, notwithstanding section 301(b)'' before the 
     period at the end.
       (b) Conforming Amendment.--Section 301 of title 11, United 
     States Code, is amended--
       (1) by inserting ``(a)'' before ``A voluntary''; [and]
       (2) by striking the last sentence; and [inserting the 
     following:]
       (3) by adding at the end 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] 901(a) of title 11, United States Code, is 
     amended--
       (1) by inserting ``555, 556,'' after ``553,''; and
       (2) by inserting ``559, 560,'' after ``557,''.

           TITLE VI--IMPROVED BANKRUPTCY STATISTICS AND DATA

     SEC. 601. AUDIT PROCEDURES.

       (a) Amendments.--Section 586 of title 28, United States 
     Code, is amended--
       (1) in subsection (a), by striking paragraph (6) and 
     inserting the following:
       ``(6) make such reports as the Attorney General directs, 
     including the results of audits performed under subsection 
     (f); and''; and
       (2) by adding at the end the following:
       ``(f)(1)(A) The Attorney General shall establish procedures 
     to determine the accuracy, veracity, and completeness of 
     petitions, schedules, and other information which the debtor 
     is required to provide under sections 521 and 1322 of title 
     11, and, if applicable, section 111 of title 11, in 
     individual cases filed under chapter 7 or 13 of such title.
       ``(B) Those procedures shall--
       ``(i) establish a method of selecting appropriate qualified 
     persons to contract to perform those audits;
       ``(ii) establish a method of randomly selecting cases to be 
     audited, except that not less than 1 out of every 250 cases 
     in each Federal judicial district shall be selected for 
     audit;
       ``(iii) require audits for schedules of income and expenses 
     which reflect greater than average variances from the 
     statistical norm of the district in which the schedules were 
     filed if those variances occur by reason of higher income or 
     higher expenses than the statistical norm of the [disctrict] 
     district in which the schedules were filed; and
       ``(iv) include procedures for providing, not less 
     frequently than annually, public information concerning the 
     aggregate results of the audits referred to in this 
     subparagraph, including the percentage of cases, by district, 
     in which a material misstatement of income or expenditures is 
     reported.
       ``(2) The United States trustee for each district may 
     contract with auditors to perform audits in cases designated 
     by the United States trustee according to the procedures 
     established under paragraph (1).
       ``(3)(A) The report of each audit conducted under this 
     subsection shall be filed with the court and transmitted to 
     the United States trustee. Each report shall clearly and 
     conspicuously specify any material misstatement of income or 
     expenditures or of assets identified by the person performing 
     the audit. In any case where a material misstatement of 
     income or expenditures or of assets has been reported, the 
     clerk of the bankruptcy court shall give notice of the 
     misstatement to the creditors in the case.
       ``(B) If a material misstatement of income or expenditures 
     or of assets is reported, the United States trustee shall--
       ``(i) report the material misstatement, if appropriate, to 
     the United States Attorney under section 3057 of title 18; 
     and
       ``(ii) if advisable, take appropriate action, including 
     commencing an adversary proceeding to revoke the debtor's 
     discharge under section 727(d) of title 11.''.
       (b) Amendments to Section 521 of Title 11, United States 
     Code.--Paragraphs (3) and (4) of section 521(a) of title 11, 
     United States Code, as amended by section 315 of this Act, 
     are each amended by inserting ``or an auditor appointed under 
     section 586 of title 28'' after ``serving in the case'' each 
     place that term appears.
       (c) Amendments to Section 727 of Title 11, United States 
     Code.--Section 727(d) of title 11, United States Code, is 
     amended--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(4) the debtor has failed to explain satisfactorily--
       ``(A) a material misstatement in an audit performed under 
     section 586(f) of title 28; or
       ``(B) a failure to make available for inspection all 
     necessary accounts, papers, documents, financial records, 
     files, and any other papers, things, or property belonging to 
     the debtor that are requested for an audit conducted under 
     section 586(f).''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect 18 months after the date of enactment of 
     this Act.

     SEC. 602. IMPROVED BANKRUPTCY STATISTICS.

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

     ``Sec. 159. Bankruptcy statistics

       ``(a) The clerk of each district court shall compile 
     statistics regarding individual debtors with primarily 
     consumer debts seeking relief under chapters 7, 11, and 13 of 
     title 11. Those statistics shall be in a form prescribed by 
     the Director of the Administrative Office of the United 
     States Courts (referred to in this section as the `Office').
       ``(b) The Director shall--
       ``(1) compile the statistics referred to in subsection (a);
       ``(2) make the statistics available to the public; and
       ``(3) not later than October 31, 1999, and annually 
     thereafter, prepare, and submit to Congress a report 
     concerning the information collected under subsection (a) 
     that contains an analysis of the information.
       ``(c) The compilation required under subsection (b) shall--
       ``(1) be itemized, by chapter, with respect to title 11;
       ``(2) be presented in the aggregate and for each district; 
     and
       ``(3) include information concerning--
       ``(A) the total assets and total liabilities of the debtors 
     described in subsection (a), and in each category of assets 
     and liabilities, as reported in the schedules prescribed 
     under section 2075 and filed by those debtors;
       ``(B) the total current monthly income, projected monthly 
     net income, and average income, and average expenses of those 
     debtors as reported on the schedules and statements that each 
     such debtor files under sections 111, 521, and 1322 of title 
     11;
       ``(C) the aggregate amount of debt discharged in the 
     reporting period, determined as the difference between the 
     total amount of debt and obligations of a debtor reported on 
     the schedules and the amount of such debt reported in 
     categories which are predominantly nondischargeable;
       ``(D) the average period of time between the filing of the 
     petition and the closing of the case;
       ``(E) for the reporting period--
       ``(i) the number of cases in which a reaffirmation was 
     filed; and
       ``(ii)(I) the total number of reaffirmations filed;

[[Page 28398]]

       ``(II) of those cases in which a reaffirmation was filed, 
     the number in which the debtor was not represented by an 
     attorney; and
       ``(III) of the cases under each of subclauses (I) and (II), 
     the number of cases in which the reaffirmation was approved 
     by the court;
       ``(F) with respect to cases filed under chapter 13 of title 
     11, for the reporting period--
       ``(i)(I) the number of cases in which a final order was 
     entered determining the value of property securing a claim in 
     an amount less than the amount of the claim; and
       ``(II) the number of final orders determining the value of 
     property securing a claim issued;
       ``(ii) the number of cases dismissed for failure to make 
     payments under the plan; and
       ``(iii) the number of cases in which the debtor filed 
     another case during the 6-year period preceding the date of 
     filing;
       ``(G) the number of cases in which creditors were fined for 
     misconduct and any amount of punitive damages awarded by the 
     court for creditor misconduct; and
       ``(H) the number of cases in which sanctions under Rule 
     9011 of the Federal Rules of Bankruptcy Procedure were 
     imposed against debtor's counsel and damages awarded under 
     such rule.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     6 of title 28, United States Code, is amended by adding at 
     the end the following:

``159. Bankruptcy statistics.''.

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

     SEC. 603. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY 
                   DATA.

       (a) Amendment.--Chapter 39 of title 28, United States Code, 
     is amended by inserting after section 589a the following:

     ``Sec. 589b. Bankruptcy data

       ``(a) Within a reasonable period of time after the 
     effective date of this section, the Attorney General of the 
     United States shall issue rules requiring uniform forms for 
     (and from time to time thereafter to appropriately modify and 
     approve)--
       ``(1) final reports by trustees in cases under chapters 7, 
     12, and 13 of title 11; and
       ``(2) periodic reports by debtors in possession or 
     trustees, as the case may be, in cases under chapter 11 of 
     title 11.
       ``(b) Each report referred to in subsection (a) shall be 
     designed (and the requirements as to place and manner of 
     filing shall be established) so as to facilitate compilation 
     of data and maximum practicable access of the public, by--
       ``(1) physical inspection at 1 or more central filing 
     locations; and
       ``(2) electronic access through the Internet or other 
     appropriate media.
       ``(c)(1) The information required to be filed in the 
     reports referred to in subsection (b) shall be information 
     that is--
       ``(A) in the best interests of debtors and creditors, and 
     in the public interest; and
       ``(B) reasonable and adequate information to evaluate the 
     efficiency and practicality of the Federal bankruptcy system.
       ``(2) In issuing rules proposing the forms referred to in 
     subsection (a), the Attorney General shall strike the best 
     achievable practical balance between--
       ``(A) the reasonable needs of the public for information 
     about the operational results of the Federal bankruptcy 
     system; and
       ``(B) economy, simplicity, and lack of undue burden on 
     persons with a duty to file reports.
       ``(d)(1) Final reports proposed for adoption by trustees 
     under chapters 7, 12, and 13 of title 11 shall include with 
     respect to a case under such title, by appropriate category--
       ``(A) information about the length of time the case was 
     pending;
       ``(B) assets abandoned;
       ``(C) assets exempted;
       ``(D) receipts and disbursements of the estate;
       ``(E) expenses of administration;
       ``(F) claims asserted;
       ``(G) claims allowed; and
       ``(H) distributions to claimants and claims discharged 
     without payment.
       ``(2) In cases under chapters 12 and 13 of title 11, final 
     reports proposed for adoption by trustees shall include--
       ``(A) the date of confirmation of the plan;
       ``(B) each modification to the plan; and
       ``(C) defaults by the debtor in performance under the plan.
       ``(3) The information described in paragraphs (1) and (2) 
     shall be in addition to such other matters as are required by 
     law for a final report or as the Attorney General, in the 
     discretion of the Attorney General, may propose for a final 
     report.
       ``(e)(1) Periodic reports proposed for adoption by trustees 
     or debtors in possession under chapter 11 of title 11 shall 
     include--
       ``(A) information about the standard industry 
     classification, published by the Department of Commerce, for 
     the businesses conducted by the debtor;
       ``(B) the length of time the case has been pending;
       ``(C) the number of full-time employees--
       ``(i) as of the date of the order for relief; and
       ``(ii) at the end of each reporting period since the case 
     was filed;
       ``(D) cash receipts, cash disbursements, and profitability 
     of the debtor for the most recent period and cumulatively 
     since the date of the order for relief;
       ``(E) compliance with title 11, whether or not tax returns 
     and tax payments since the date of the order for relief have 
     been timely filed and made;
       ``(F) all professional fees approved by the court in the 
     case for the most recent period and cumulatively since the 
     date of the order for relief (separately reported, for the 
     professional fees incurred by or on behalf of the debtor, 
     between those that would have been incurred absent a 
     bankruptcy case and those that would not have been so 
     incurred); and
       ``(G) plans of reorganization filed and confirmed and, with 
     respect thereto, by class, the recoveries of the holders, 
     expressed in aggregate dollar values and, in the case of 
     claims, as a percentage of total claims of the class allowed.
       ``(2) The information described in paragraph (1) shall be 
     in addition to such other matters as are required by law for 
     a periodic report or as the Attorney General, in the 
     discretion of the Attorney General, may propose for a 
     periodic report.''.
       (b) Technical Amendment.--The table of sections for chapter 
     39 of title 28, United States Code, is amended by adding at 
     the end the following:

``589b. Bankruptcy data.''.

     SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF 
                   BANKRUPTCY DATA.

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

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

     SEC. 701. TREATMENT OF CERTAIN LIENS.

       (a) Treatment of Certain Liens.--Section 724 of title 11, 
     United States Code, is amended--
       (1) in subsection (b), in the matter preceding paragraph 
     (1), by inserting ``(other than to the extent that there is a 
     properly perfected unavoidable tax lien arising in connection 
     with an ad valorem tax on real or personal property of the 
     estate)'' after ``under this title'';
       (2) in subsection (b)(2), by inserting ``(except that such 
     expenses, other than claims for wages, salaries, or 
     commissions which arise after the filing of a petition, shall 
     be limited to expenses incurred under chapter 7 of this title 
     and shall not include expenses incurred under chapter 11 of 
     this title)'' after ``507(a)(1)''; and
       (3) by adding at the end the following:
       ``(e) Before subordinating a tax lien on real or personal 
     property of the estate, the trustee shall--
       ``(1) exhaust the unencumbered assets of the estate; and
       ``(2) in a manner consistent with section 506(c), recover 
     from property securing an allowed secured claim the 
     reasonable, necessary costs, and expenses of preserving or 
     disposing of that property.
       ``(f) Notwithstanding the exclusion of ad valorem tax liens 
     under this section and subject to the requirements of 
     subsection (e), the following may be paid from property of 
     the estate which secures a tax lien, or the proceeds of such 
     property:
       ``(1) Claims for wages, salaries, and commissions that are 
     entitled to priority under section 507(a)(3).
       ``(2) Claims for contributions to an employee benefit plan 
     entitled to priority under section 507(a)(4).''.
       (b) Determination of Tax Liability.--Section 505(a)(2) of 
     title 11, United States Code, is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the amount or legality of any amount arising in 
     connection with an ad valorem tax on real or personal 
     property of the estate, if the applicable period for 
     contesting or redetermining that amount under any law (other 
     than a bankruptcy law) has expired.''.;.

     SEC. 702. EFFECTIVE NOTICE TO GOVERNMENT.

       (a) Effective Notice to Governmental Units.--Section 342 of 
     title 11, United States Code, as amended by section 315(a) of 
     this Act, is amended by adding at the end the following:
       ``(g)(1) If a debtor lists a governmental unit as a 
     creditor in a list or schedule, any notice required to be 
     given by the debtor under this title, applicable rule, other 
     provision of law, or order of the court, shall identify the 
     department, agency, or instrumentality through which the 
     debtor is indebted.

[[Page 28399]]

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

     SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.

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

     SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

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

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

       ``If any provision of this title requires the payment of 
     interest on a tax claim or the payment of interest to enable 
     a creditor to receive the present value of the allowed amount 
     of a tax claim, the rate of interest shall be as follows:
       ``(1) In the case of secured tax claims, unsecured ad 
     valorem tax claims, other unsecured tax claims in which 
     interest is required to be paid under section 726(a)(5), and 
     administrative tax claims paid under section 503(b)(1), the 
     rate shall be determined under applicable nonbankruptcy law.
       ``(2)(A) In the case of any tax claim other than a claim 
     described in paragraph (1), the minimum rate of interest 
     shall be a percentage equal to the sum of--
       ``(i) 3; plus
       ``(ii) the Federal short-term rate rounded to the nearest 
     full percent, determined under section 1274(d) of the 
     Internal Revenue Code of 1986.
       ``(B) In the case of any claim for Federal income taxes, 
     the minimum rate of interest shall be subject to any 
     adjustment that may be required under section 6621(d) of the 
     Internal Revenue Code of 1986.
       ``(C) In the case of taxes paid under a confirmed plan or 
     reorganization under this title, the minimum rate of interest 
     shall be determined as of the calendar month in which the 
     plan is confirmed.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     5 of title 11, United States Code, is amended by inserting 
     after the item relating to section 510 the following:

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

     SEC. 705. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.

       Section 507(a)(8)(A) of title 11, United States Code, [as 
     redesignated by section 212 of this Act,] is amended--
       (1) in clause (i), by inserting before the semicolon at the 
     end, the following: ``, plus any time during which the stay 
     of proceedings was in effect in a prior case under this 
     title, plus 6 months''; and
       (2) by striking clause (ii) and inserting the following:
       ``(ii) assessed within 240 days before the date of the 
     filing of the petition, exclusive of--

       ``(I) any time during which an offer in compromise with 
     respect to that tax, was pending or in effect during that 
     240-day period, plus 30 days;
       ``(II) the lesser of--

       ``(aa) any time during which an installment agreement with 
     respect to that tax was pending or in effect during that 240-
     day period, plus 30 days; or
       ``(bb) 1 year; and

       ``(III) any time during which a stay of proceedings against 
     collections was in effect in a prior case under this title 
     during that 240-day period; plus 6 months.''.

     SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

       Section 507(a)(9)(B) of title 11, United States Code, [as 
     redesignated by section 221 of this Act,] is amended by 
     striking ``assessed'' and inserting ``incurred''.

     SEC. 707. CHAPTER 13 DISCHARGE OF FRAUDULENT AND OTHER TAXES.

       Section 1328(a)(2) of title 11, United States Code, as 
     amended by section [228] 314 of this Act, is amended by 
     inserting ``(1),'' after ``paragraph''.

     SEC. 708. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.

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

     SEC. 709. STAY OF TAX PROCEEDINGS.

       (a) Section 362 Stay Limited to Prepetition Taxes.--Section 
     362(a)(8) of title 11, United States Code, is amended by 
     inserting before the semicolon at the end the following: ``, 
     with respect to a tax liability for a taxable period ending 
     before the order for relief under section 301, 302, or 303''.
       (b) Appeal of Tax Court Decisions Permitted.--Section 
     362(b)(9) of title 11, United States Code, is amended--
       (1) in subparagraph (C), by striking ``or'' at the end;
       (2) in subparagraph (D), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(E) the appeal of a decision by a court or administrative 
     tribunal which determines a tax liability of the debtor 
     (without regard to whether such determination was made 
     prepetition or postpetition).''.

     SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.

       Section 1129(a)(9) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (B), by striking ``and'' at the end; 
     and
       (2) in subparagraph (C), by striking ``deferred cash 
     payments, over a period not exceeding six years after the 
     date of assessment of such claim,'' and all that follows 
     through the end of the subparagraph, and inserting ``regular 
     installment payments--
       ``(i) of a total value, as of the effective date of the 
     claim, equal to the allowed amount of such claim in cash, but 
     in no case with a balloon payment; and
       ``(ii) beginning not later than the effective date of the 
     plan and ending on the earlier of--

       ``(I) the date that is 5 years after the date of the filing 
     of the petition; or

       ``(II) the last date payments are to be made under the plan 
     to unsecured creditors; and''; and

       (3) by adding at the end the following:
       ``(D) with respect to a secured claim which would otherwise 
     meet the description on an unsecured claim of a governmental 
     unit under section 507(a)(8), but for the secured status of 
     that claim, the holder of that claim will receive on account 
     of that claim, cash payments, in the same manner and over the 
     same period, as prescribed in subparagraph (C).''.

     SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

       Section 545(2) of title 11, United States Code, is amended 
     by striking the semicolon

[[Page 28400]]

     at the end and inserting ``, except in any case in which a 
     purchaser is a purchaser described in section 6323 of the 
     Internal Revenue Code of 1986, or in any other similar 
     provision of State or local law;''.

     SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.

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

     SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.

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

     SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.

       Section 523(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (1)(B)--
       (A) by inserting ``or equivalent report or notice,'' after 
     ``a return,'';
       (B) in clause (i)--
       (i) by inserting ``or given'' after ``filed''; and
       (ii) by striking ``or'' at the end; and
       (C) in clause (ii)--
       (i) by inserting ``or given'' after ``filed''; and
       (ii) by inserting ``, report, or notice'' after ``return''; 
     and
       (2) by adding at the end the following flush sentences:
     ``For purposes of this subsection, the term `return' means a 
     return that satisfies the requirements of applicable 
     nonbankruptcy law (including applicable filing requirements). 
     Such term includes a return prepared pursuant to section 
     6020(a) of the Internal Revenue Code of 1986, or similar 
     State or local law, or a written stipulation to a judgment 
     entered by a nonbankruptcy tribunal, but does not include a 
     return made pursuant to section 6020(b) of the Internal 
     Revenue Code of 1986, or a similar State or local law.''.

     SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID 
                   TAXES.

       The second sentence of section 505(b) of title 11, United 
     States Code, as amended by section 703 of this Act, is 
     amended by inserting ``the estate,'' after 
     ``misrepresentation,''.

     SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 
                   13 PLANS.

       (a) Filing of Prepetition Tax Returns Required for Plan 
     Confirmation.--Section 1325(a) of title 11, United States 
     Code, as amended by section [212] 213 and 306 of this Act, is 
     amended--
       (1) in paragraph (6), by striking ``and'' at the end;
       (2) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (3) by [adding at the end the following:] inserting after 
     paragraph (7) the following:
       ``(8) if the debtor has filed all applicable Federal, 
     State, and local tax returns as required by section 1309.''.
       (b) Additional Time Permitted for Filing Tax Returns.--
       (1) In general.--Chapter 13 of title 11, United States 
     Code, as amended by section 309(c) of this Act, is amended by 
     adding at the end the following:

     ``Sec. 1309. Filing of prepetition tax returns

       ``(a) Not later than the day before the day on which the 
     first meeting of the creditors is convened under section 
     341(a), the debtor shall file with appropriate tax 
     authorities all tax returns for all taxable periods ending 
     during the 3-year period ending on the date of the filing of 
     the petition.
       ``(b)(1) Subject to paragraph (2), if the tax returns 
     required by subsection (a) have not been filed by the date on 
     which the first meeting of creditors is convened under 
     section 341(a), the trustee may continue that meeting for a 
     reasonable period of time to allow the debtor an additional 
     period of time to file any unfiled returns, but such 
     additional period of time shall not extend beyond--
       ``(A) for any return that is past due as of the date of the 
     filing of the petition, the date that is 120 days after the 
     date of that first meeting; or
       ``(B) for any return that is not past due as of the date of 
     the filing of the petition, the later of--
       ``(i) the date that is 120 days after the date of that 
     first meeting; or
       ``(ii) the date on which the return is due under the last 
     automatic extension of time for filing that return to which 
     the debtor is entitled, and for which request has been timely 
     made, according to applicable nonbankruptcy law.
       ``(2) Upon notice and hearing, and order entered before the 
     tolling of any applicable filing period determined under this 
     subsection, if the debtor demonstrates by clear and 
     convincing evidence that the failure to file a return as 
     required under this subsection is attributable to 
     circumstances beyond the control of the debtor, the court may 
     extend the filing period established by the trustee under 
     this subsection for--
       ``(A) a period of not more than 30 days for returns 
     described in paragraph (1); and
       ``(B) a period not to extend after the applicable extended 
     due date for a return described in paragraph (2).
       ``(c) For purposes of this section, the term `return' 
     includes a return prepared pursuant to section 6020 (a) or 
     (b) of the Internal Revenue Code of 1986, or a similar State 
     or local law, or written stipulation to a judgment entered by 
     a nonbankruptcy tribunal.''.
       (2) Conforming amendment.--The table of sections for 
     chapter 13 of title 11, United States Code, is amended by 
     inserting after the item relating to section 1308 the 
     following:

``1309. Filing of prepetition tax returns.''.

       (c) Dismissal or Conversion on Failure To Comply.--Section 
     1307 of title 11, United States Code, is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (2) by inserting after subsection (d), the following:
       ``(e) Upon the failure of the debtor to file a tax return 
     under section 1309, on request of a party in interest or the 
     United States trustee and after notice and a hearing, the 
     court shall dismiss the case.''.
       (d) Timely Filed Claims.--Section 502(b)(9) of title 11, 
     United States Code, is amended by inserting before the period 
     at the end the following ``, and except that in a case under 
     chapter 13 [of this title], a claim of a governmental unit 
     for a tax with respect to a return filed under section 1309 
     shall be timely if the claim is filed on or before the date 
     that is 60 days after that return was filed in accordance 
     with applicable requirements''.
       (e) Rules for Objections to Claims and to Confirmation.--It 
     is the sense of Congress that the Advisory Committee on 
     Bankruptcy Rules of the Judicial Conference should, within a 
     reasonable period of time after the date of enactment of this 
     Act, propose for adoption amended Federal Rules of Bankruptcy 
     Procedure which provide that--
       (1) notwithstanding the provisions of Rule 3015(f), in 
     cases under chapter 13 of title 11, United States Code, a 
     governmental unit may object to the confirmation of a plan on 
     or before the date that is 60 days after the date on which 
     the debtor files all tax returns required under sections 1309 
     and 1325(a)(7) of title 11, United States Code; and
       (2) in addition to the provisions of Rule 3007, in a case 
     under chapter 13 of title 11, United States Code, no 
     objection to a tax with respect to which a return is required 
     to be filed under section 1309 of title 11, United States 
     Code, shall be filed until such return has been filed as 
     required.

     SEC. 717. STANDARDS FOR TAX DISCLOSURE.

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

[[Page 28401]]

       (2) by striking ``a hypothetical reasonable investor 
     typical of holders of claims or interests'' and inserting 
     ``such a hypothetical investor''.

     SEC. 718. SETOFF OF TAX REFUNDS.

       Section 362(b) of title 11, United States Code, as amended 
     by section 402 of this Act, is amended--
       (1) in paragraph (25), by striking ``or'' at the end;
       (2) in paragraph (26), by striking the period at the end 
     and inserting ``; or''; and
       (3) by inserting after paragraph (26) the following:
       ``(27) under subsection (a), of the setoff of an income tax 
     refund, by a governmental unit, with respect to a taxable 
     period that ended before the order for relief against an 
     income tax liability for a taxable period that also ended 
     before the order for relief, unless--
       ``(A) before that setoff, an action to determine the amount 
     or legality of that tax liability under section 505(a) was 
     commenced; or
       ``(B) in any case in which the setoff of an income tax 
     refund is not permitted because of a pending action to 
     determine the amount or legality of a tax liability, in which 
     case the governmental unit may hold the refund pending the 
     resolution of the action.''.

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

     SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED 
                   STATES CODE.

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

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

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

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

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

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

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

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

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

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

     ``Sec. 1501. Purpose and scope of application

       ``(a) The purpose of this chapter is to incorporate the 
     Model Law on Cross-Border Insolvency so as to provide 
     effective mechanisms for dealing with cases of cross-border 
     insolvency with the objectives of--
       ``(1) cooperation between--
       ``(A) United States courts, United States Trustees, 
     trustees, examiners, debtors, and debtors in possession; and
       ``(B) the courts and other competent authorities of foreign 
     countries involved in cross-border insolvency cases;
       ``(2) greater legal certainty for trade and investment;
       ``(3) fair and efficient administration of cross-border 
     insolvencies that protects the interests of all creditors, 
     and other interested entities, including the debtor;
       ``(4) protection and maximization of the value of the 
     debtor's assets; and
       ``(5) facilitation of the rescue of financially troubled 
     businesses, thereby protecting investment and preserving 
     employment.
       ``(b) This chapter applies if--
       ``(1) assistance is sought in the United States by a 
     foreign court or a foreign representative in connection with 
     a foreign proceeding;
       ``(2) assistance is sought in a foreign country in 
     connection with a case under this title;
       ``(3) a foreign proceeding and a case under this title with 
     respect to the same debtor are taking place concurrently; or
       ``(4) creditors or other interested persons in a foreign 
     country have an interest in requesting the commencement of, 
     or participating in, a case or proceeding under this title.
       ``(c) This chapter does not apply to--
       ``(1) a proceeding concerning an entity identified by 
     exclusion in subsection 109(b);
       ``(2) an individual, or to an individual and such 
     individual's spouse, who have debts within the limits 
     specified in section 109(e) and who are citizens of the 
     United States or aliens lawfully admitted for permanent 
     residence in the United States; or
       ``(3) an entity subject to a proceeding under the 
     Securities Investor Protection Act of 1970 (84 Stat. 1636 et 
     seq.), a stockbroker subject to subchapter III of chapter 7 
     of this title, or a commodity broker subject to subchapter IV 
     of chapter 7 of this title.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

     ``Sec. 1502. Definitions

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

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

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

     ``Sec. 1504. Commencement of ancillary case

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

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

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

     ``Sec. 1506. Public policy exception

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

     ``Sec. 1507. Additional assistance

       ``(a) Subject to the specific limitations under other 
     provisions of this chapter, the court, upon recognition of a 
     foreign proceeding, may provide additional assistance to a 
     foreign representative under this title or under other laws 
     of the United States.
       ``(b) In determining whether to provide additional 
     assistance under this title or under other laws of the United 
     States, the court shall consider whether such additional 
     assistance, consistent with the principles of comity, will 
     reasonably assure--
       ``(1) just treatment of all holders of claims against or 
     interests in the debtor's property;
       ``(2) protection of claim holders in the United States 
     against prejudice and inconvenience in the processing of 
     claims in such foreign proceeding;

[[Page 28402]]

       ``(3) prevention of preferential or fraudulent dispositions 
     of property of the debtor;
       ``(4) distribution of proceeds of the debtor's property 
     substantially in accordance with the order prescribed by this 
     title; and
       ``(5) if appropriate, the provision of an opportunity for a 
     fresh start for the individual that such foreign proceeding 
     concerns.

     ``Sec. 1508. Interpretation

       ``In interpreting this chapter, the court shall consider 
     its international origin, and the need to promote an 
     application of this chapter that is consistent with the 
     application of similar statutes adopted by foreign 
     jurisdictions.

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

     ``Sec. 1509. Right of direct access

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

     ``Sec. 1510. Limited jurisdiction

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

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

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

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

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

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

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

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

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

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

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

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

     ``Sec. 1516. Presumptions concerning recognition

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

     ``Sec. 1517. Order recognizing a foreign proceeding

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

     ``Sec. 1518. Subsequent information

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

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

       ``(a) Beginning on the date on which a petition for 
     recognition is filed and ending on the date on which the 
     petition is decided upon, the court may, at the request of 
     the foreign representative, where relief is urgently needed 
     to protect the assets of the

[[Page 28403]]

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

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

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

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

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

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

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

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

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

     ``Sec. 1524. Intervention by a foreign representative

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

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

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

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

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

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

     ``Sec. 1527. Forms of cooperation

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

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

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

       ``In any case in which a foreign proceeding and a case 
     under another chapter of this title

[[Page 28404]]

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

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

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

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

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

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

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

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

     SEC. 802. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11, UNITED 
                   STATES CODE.

       (a) Applicability of Chapters.--Section 103 of title 11, 
     United States Code, is amended--
       (1) in subsection (a), by inserting before the period the 
     following: ``, and this chapter, sections 307, 304, 555 
     through 557, 559, and 560 apply in a case under chapter 15''; 
     and
       (2) by adding at the end the following:
       ``(j) Chapter 15 applies only in a case under such chapter, 
     except that--
       ``(1) sections 1513 and 1514 apply in all cases under this 
     title; and
       ``(2) section 1505 applies to trustees and to any other 
     entity (including an examiner) authorized by the court under 
     chapter 7, 11, or 12, to debtors in possession under chapter 
     11 or 12, and to debtors under chapter 9 who are authorized 
     to act under section 1505.''.
       (b) Definitions.--Paragraphs (23) and (24) of section 101 
     of title 11, United States Code, are amended to read as 
     follows:
       ``(23) `foreign proceeding' means a collective judicial or 
     administrative proceeding in a foreign country, including an 
     interim proceeding, pursuant to a law relating to insolvency 
     in which proceeding the assets and affairs of the debtor are 
     subject to control or supervision by a foreign court, for the 
     purpose of reorganization or liquidation;
       ``(24) `foreign representative' means a person or body, 
     including a person or body appointed on an interim basis, 
     authorized in a foreign proceeding to administer the 
     reorganization or the liquidation of the debtor's assets or 
     affairs or to act as a representative of the foreign 
     proceeding;''.
       (c) Amendments to Title 28, United States Code.--
       (1) Procedures.--Section 157(b)(2) of title 28, United 
     States Code, is amended--
       (A) in subparagraph (N), by striking ``and'' at the end;
       (B) in subparagraph (O), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(P) recognition of foreign proceedings and other matters 
     under chapter 15 of title 11.''.
       (2) Bankruptcy cases and proceedings.--Section 1334(c)(1) 
     of title 28, United States Code, is amended by striking 
     ``Nothing in'' and inserting ``Except with respect to a case 
     under chapter 15 of title 11, nothing in''.
       (3) Duties of trustees.--Section 586(a)(3) of title 28, 
     United States Code, is amended by inserting ``15,'' after 
     ``chapter''.

     SEC. 803. CLAIMS RELATING TO INSURANCE DEPOSITS IN CASES 
                   ANCILLARY TO FOREIGN PROCEEDINGS.

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

     ``Sec. 304. Cases ancillary to foreign proceedings

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

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

     SEC. 901. BANKRUPTCY CODE AMENDMENTS.

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

       ``(I) a certificate of deposit, mortgage related security 
     (as defined in section 3 of the Securities Exchange Act of 
     1934), mortgage loan, interest in a mortgage related security 
     or mortgage loan, eligible bankers' acceptance, or qualified 
     foreign government security (defined for purposes of this 
     paragraph to mean a security that is a direct obligation of, 
     or that is fully guaranteed by, the central government of a 
     member of the Organization for Economic Cooperation and 
     Development); or
       ``(II) a security that is a direct obligation of, or that 
     is fully guaranteed by, the United States or an agency of the 
     United States

[[Page 28405]]

     against the transfer of funds by the transferee of such 
     certificate of deposit, eligible bankers' acceptance, 
     security, loan, or interest;

     with a simultaneous agreement by such transferee to transfer 
     to the transferor thereof a certificate of deposit, eligible 
     bankers' acceptance, security, loan, or interest of the kind 
     described in subclause (I) or (II), at a date certain that is 
     not later than 1 year after the date of the transferor's 
     transfer or on demand, against the transfer of funds;
       ``(ii) a combination of agreements or transactions referred 
     to in clauses (i) and (iii);
       ``(iii) an option to enter into an agreement or transaction 
     referred to in clause (i) or (ii); or
       ``(iv) a master netting agreement that provides for an 
     agreement or transaction referred to in clause (i), (ii), or 
     (iii), together with all supplements to such master netting 
     agreement, without regard to whether such master netting 
     agreement provides for an agreement or transaction that is 
     not a repurchase agreement under this subparagraph, except 
     that such master netting agreement shall be considered to be 
     a repurchase agreement under this subparagraph only with 
     respect to each agreement or transaction under such master 
     netting agreement that is referred to in clause (i), (ii), or 
     (iii); or
       ``(v) a security agreement or arrangement, or other credit 
     enhancement, directly pertaining to a contract referred to in 
     clause (i), (ii), (iii), or (iv), but not to exceed the 
     actual value of such contract on the date of the filing of 
     the petition; and
       ``(B) do not include a repurchase obligation under a 
     participation in a commercial mortgage loan;'';
       (C) in paragraph (48) by inserting ``, or exempt from such 
     registration under such section pursuant to an order of the 
     Securities and Exchange Commission'' after ``1934''; and
       (D) by striking paragraph (53B) and inserting the 
     following:
       ``(53B) `swap agreement'--
       ``(A) means--
       ``(i) an agreement, including the terms and conditions 
     incorporated by reference in such agreement, that is--

       ``(I) an interest rate swap, option, future, or forward 
     agreement, including a rate floor, rate cap, rate collar, 
     cross-currency rate swap, and basis swap;
       ``(II) a spot, same day-tomorrow, tomorrow-next, forward, 
     or other foreign exchange or precious metals agreement;
       ``(III) a currency swap, option, future, or forward 
     agreement;

       ``(IV) an equity index or an equity swap, option, future, 
     or forward agreement;
       ``(V) a debt index or a debt swap, option, future, or 
     forward agreement;
       ``(VI) a credit spread or a credit swap, option, future, or 
     forward agreement; or
       ``(VII) a commodity index or a commodity swap, option, 
     future, or forward agreement;

       ``(ii) an agreement or transaction that is similar to an 
     agreement or transaction referred to in clause (i) that--

       ``(I) is currently, or in the future becomes, regularly 
     entered into in the swap market (including terms and 
     conditions incorporated by reference therein); and
       ``(II) is a forward, swap, future, or option on a rate, 
     currency, commodity, equity security, or other equity 
     instrument, on a debt security or other debt instrument, or 
     on an economic index or measure of economic risk or value;

       ``(iii) a combination of agreements or transactions 
     referred to in clauses (i) and (ii);
       ``(iv) an option to enter into an agreement or transaction 
     referred to in this subparagraph;
       ``(v) a master netting agreement that provides for an 
     agreement or transaction referred to in clause (i), (ii), 
     (iii), or (iv), together with all supplements to such master 
     netting agreement and without regard to whether such master 
     netting agreement contains an agreement or transaction 
     described in any such clause, but only with respect to each 
     agreement or transaction referred to in any such clause that 
     is under such master netting agreement; except that
       ``(B) the definition under subparagraph (A) is applicable 
     for purposes of this title only, and shall not be construed 
     or applied so as to challenge or affect the characterization, 
     definition, or treatment of any swap agreement under any 
     other statute, regulation, or rule, including the Securities 
     Act of 1933, the Securities Exchange Act of 1934, the Public 
     Utility Holding Company Act of 1935, the Trust Indenture Act 
     of 1939, the Investment Company Act of 1940, the Investment 
     Advisers Act of 1940, the Securities Investor Protection Act 
     of 1970, the Commodity Exchange Act, and the regulations 
     prescribed by the Securities and Exchange Commission or the 
     Commodity Futures Trading Commission.'';
       (2) in section 741, by striking paragraph (7) and inserting 
     the following:
       ``(7) `securities contract'--
       ``(A) means--
       ``(i) a contract for the purchase, sale, or loan of a 
     security, a mortgage loan or an interest in a mortgage loan, 
     a group or index of securities, or mortgage loans or 
     interests therein (including an interest therein or based on 
     the value thereof), or option on any of the foregoing, 
     including an option to purchase or sell any of the foregoing;
       ``(ii) an option entered into on a national securities 
     exchange relating to foreign currencies;
       ``(iii) the guarantee by or to a securities clearing agency 
     of a settlement of cash, securities, mortgage loans or 
     interests therein, group or index of securities, or mortgage 
     loans or interests therein (including any interest therein or 
     based on the value thereof), or option on any of the 
     foregoing, including an option to purchase or sell any of the 
     foregoing;
       ``(iv) a margin loan;
       ``(v) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this subparagraph;
       ``(vi) a combination of the agreements or transactions 
     referred to in this subparagraph;
       ``(vii) an option to enter into an agreement or transaction 
     referred to in this subparagraph;
       ``(viii) a master netting agreement that provides for an 
     agreement or transaction referred to in clause (i), (ii), 
     (iii), (iv), (v), (vi), or (vii), together with all 
     supplements to such master netting agreement, without regard 
     to whether such master netting agreement provides for an 
     agreement or transaction that is not a securities contract 
     under this subparagraph, except that such master netting 
     agreement shall be considered to be a securities contract 
     under this subparagraph only with respect to each agreement 
     or transaction under such master netting agreement that is 
     referred to in clause (i), (ii), (iii), (iv), (v), (vi), or 
     (vii); or
       ``(ix) a security agreement or arrangement, or other credit 
     enhancement, directly pertaining to a contract referred to in 
     this subparagraph, but not to exceed the actual value of such 
     contract on the date of the filing of the petition; and
       ``(B) does not include a purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan;''; and
       (3) in section 761(4)--
       (A) by striking ``or'' at the end of subparagraph (D); and
       [(B) in subparagraph (E), by striking the period at the end 
     and inserting ``; and''; and
       [(C)] (B) by adding at the end the following:
       ``(F) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(G) a combination of the agreements or transactions 
     referred to in this paragraph;
       ``(H) an option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(I) a master netting agreement that provides for an 
     agreement or transaction referred to in subparagraph (A), 
     (B), (C), (D), (E), (F), (G), or (H), together with all 
     supplements to such master netting agreement, without regard 
     to whether such master netting agreement provides for an 
     agreement or transaction that is not a commodity contract 
     under this paragraph, except that such master netting 
     agreement shall be considered to be a commodity contract 
     under this paragraph only with respect to each agreement or 
     transaction under such master netting agreement that is 
     referred to in subparagraph (A), (B), (C), (D), (E), (F), 
     (G), or (H); or
       ``(J) a security agreement or arrangement, or other credit 
     enhancement, directly pertaining to a contract referred to in 
     this paragraph, but not to exceed the actual value of such 
     contract on the date of the filing of the petition.''.
       (b) Definitions of Financial Institution, Financial 
     Participant, and Forward Contract Merchant.--Section 101 of 
     title 11, United States Code, as amended by section 802(b) of 
     this Act, is amended--
       (1) by striking paragraph (22) and inserting the following:
       ``(22) `financial institution' means--
       ``(A)(i) a Federal reserve bank, or an entity that is a 
     commercial or savings bank, industrial savings bank, savings 
     and loan association, trust company, or receiver or 
     conservator for such entity; and
       ``(ii) if such Federal reserve bank, receiver, or 
     conservator or entity is acting as agent or custodian for a 
     customer in connection with a securities contract, as defined 
     in section 741, such customer; or
       ``(B) in connection with a securities contract, as defined 
     in section 741 of this title, an investment company 
     registered under the Investment Company Act of 1940;'';
       (2) by inserting after paragraph (22) the following:
       ``(22A) `financial participant' means an entity that is a 
     party to a securities contract, commodity contract or forward 
     contract, or on the date of the filing of the petition, has a 
     commodity contract (as defined in section 761) with the 
     debtor or any other entity (other than an affiliate) of a 
     total gross dollar value of not less than $1,000,000,000 in 
     notional or actual principal amount outstanding on any day 
     during the previous 15-month period, or has gross mark-to-
     market positions of not less than $100,000,000 (aggregated 
     across counterparties) in any such agreement or transaction 
     with the debtor or any other entity (other than an affiliate) 
     on any day during the previous 15-month period;''; and
       (3) by striking paragraph (26) and inserting the following:
       ``(26) `forward contract merchant' means a Federal reserve 
     bank, or an entity, the business of which consists in whole 
     or in part of

[[Page 28406]]

     entering into forward contracts as or with merchants or in a 
     commodity, as defined or in section 761, or any similar good, 
     article, service, right, or interest that is presently or in 
     the future becomes the subject of dealing or in the forward 
     contract trade;''.
       (c) Definition of Master Netting Agreement and Master 
     Netting Agreement Participant.--Section 101 of title 11, 
     United States Code, as amended by subsection (b) of this 
     section, is amended by inserting after paragraph (38) the 
     following new paragraphs:
       ``(38A) the term `master netting agreement'--
       ``(A) means an agreement providing for the exercise of 
     rights, including rights of netting, setoff, liquidation, 
     termination, acceleration, or closeout, under or in 
     connection with 1 or more contracts that are described in any 
     1 or more of paragraphs (1) through (5) of section 561(a), or 
     any security agreement or arrangement or other credit 
     enhancement related to 1 or more of the foregoing; except 
     that
       ``(B) if a master netting agreement contains provisions 
     relating to agreements or transactions that are not contracts 
     described in paragraphs (1) through (5) of section 561(a), 
     the master netting agreement shall be deemed to be a master 
     netting agreement only with respect to those agreements or 
     transactions that are described in any 1 or more of the 
     paragraphs (1) through (5) of section 561(a);
       ``(38B) the term `master netting agreement participant' 
     means an entity that, at any time before the filing of the 
     petition, is a party to an outstanding master netting 
     agreement with the debtor;''.
       (d) Swap Agreements, Securities Contracts, Commodity 
     Contracts, Forward Contracts, Repurchase Agreements, and 
     Master Netting Agreements Under the Automatic Stay.--
       (1) In general.--Section 362(b) of title 11, United States 
     Code, as amended by section 718 of this Act, is amended--
       (A) in paragraph (6), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (B) in paragraph (7), by inserting ``, pledged to, and 
     under the control of,'' after ``held by'';
       (C) by striking paragraph (17) and inserting the following:
       ``(17) under subsection (a), of the setoff by a swap 
     participant of a mutual debt and claim under or in connection 
     with a swap agreement that constitutes the setoff of a claim 
     against the debtor for a payment or transfer due from the 
     debtor under or in connection with a swap agreement against a 
     payment due to the debtor from the swap participant under or 
     in connection with a swap agreement or against cash, 
     securities, or other property held by, pledged to, and under 
     the control of, or due from such swap participant to 
     guarantee, secure, or settle a swap agreement;'';
       (D) in paragraph (26), by striking ``or'' at the end;
       (E) in paragraph (27), by striking the period at the end 
     and inserting ``; or''; and
       (F) by inserting after paragraph (27) the following:
       ``(28) under subsection (a), of the setoff by a master 
     netting agreement participant of a mutual debt and claim 
     under or in connection with 1 or more master netting 
     agreements or any contract or agreement subject to such 
     agreements that constitutes the setoff of a claim against the 
     debtor for any payment or other transfer of property due from 
     the debtor under or in connection with such agreements or any 
     contract or agreement subject to such agreements against any 
     payment due to the debtor from such master netting agreement 
     participant under or in connection with such agreements or 
     any contract or agreement subject to such agreements or 
     against cash, securities, or other property held by, pledged 
     or and under the control of, or due from such master netting 
     agreement participant to margin, guarantee, secure, or settle 
     such agreements or any contract or agreement subject to such 
     agreements, to the extent such participant is eligible to 
     exercise such offset rights under paragraph (6), (7), or (17) 
     for each individual contract covered by the master netting 
     agreement in issue.''.
       (2) Limitation.--Section 362 of title 11, United States 
     Code, as amended by section 432(2) of this Act, is amended by 
     adding at the end the following:
       ``(l) Limitation.--The exercise of rights not subject to 
     the stay arising under subsection (a) pursuant to paragraph 
     (6), (7), or (17) of subsection (b) shall not be stayed by an 
     order of a court or administrative agency in any proceeding 
     under this title.''.
       (e) Limitation of Avoidance Powers Under Master Netting 
     Agreement.--Section 546 of title 11, United States Code, is 
     amended--
       (1) in subsection (g) (as added by section 103 of Public 
     Law 101-311 (104 Stat. 267 et seq.))--
       (A) by striking ``under a swap agreement''; and
       (B) by striking ``in connection with a swap agreement'' and 
     inserting ``under or in connection with any swap agreement''; 
     and
       (2) by inserting before subsection (i) (as redesignated by 
     section 407 of this Act) the following new subsection:
       ``(h) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), 
     and 548(b), the trustee may not avoid a transfer made by or 
     to a master netting agreement participant under or in 
     connection with any master netting agreement or any 
     individual contract covered thereby that is made before the 
     commencement of the case, and except to the extent that the 
     trustee could otherwise avoid such a transfer made under an 
     individual contract covered by such master netting agreement 
     (except under section 548(a)(1)(A)).''.
       (f) Fraudulent Transfers of Master Netting Agreements.--
     Section 548(d)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (C), by striking ``and'';
       (2) in subparagraph (D), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) a master netting agreement participant that receives 
     a transfer in connection with a master netting agreement or 
     any individual contract covered thereby takes for value to 
     the extent of such transfer, except, with respect to a 
     transfer under any individual contract covered thereby, to 
     the extent that such master netting agreement participant 
     otherwise did not take (or is otherwise not deemed to have 
     taken) such transfer for value.''.
       (g) Termination or Acceleration of Securities Contracts.--
     Section 555 of title 11, United States Code, is amended--
       (1) by striking the section heading and inserting the 
     following:

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

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

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

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

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

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

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

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

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

       ``(a) Subject to subsection (b), the exercise of any 
     contractual right, because of a condition of the kind 
     specified in section 365(e)(1), to cause the termination, 
     liquidation, or acceleration of or to offset or net 
     termination values, payment amounts or other transfer 
     obligations arising under or in connection with 1 or more (or 
     the termination, liquidation, or acceleration of 1 or more)--
       ``(1) securities contracts, as defined in section 741(7);
       ``(2) commodity contracts, as defined in section 761(4);
       ``(3) forward contracts;
       ``(4) repurchase agreements;
       ``(5) swap agreements; or
       ``(6) master netting agreements,
     shall not be stayed, avoided, or otherwise limited by 
     operation of any provision of this title or by any order of a 
     court or administrative agency in any proceeding under this 
     title.
       ``(b)(1) A party may exercise a contractual right described 
     in subsection (a) to terminate, liquidate, or accelerate only 
     to the extent that such party could exercise such a right 
     under section 555, 556, 559, or 560 for each individual 
     contract covered by the master netting agreement in issue.
       ``(2) If a debtor is a commodity broker subject to 
     subchapter IV of chapter 7 [of this title]--
       ``(A) a party may not net or offset an obligation to the 
     debtor arising under, or in connection with, a commodity 
     contract against

[[Page 28407]]

     any claim arising under, or in connection with, other 
     instruments, contracts, or agreements listed in subsection 
     (a), except to the extent that the party has [no] positive 
     net equity in the commodity accounts at the debtor, as 
     calculated under such subchapter IV; and
       ``(B) another commodity broker may not net or offset an 
     obligation to the debtor arising under, or in connection 
     with, a commodity contract entered into or held on behalf of 
     a customer of the debtor against any claim arising under, or 
     in connection with, other instruments, contracts, or 
     agreements referred to in subsection (a).
       ``(c) As used in this section, the term `contractual right' 
     includes a right set forth in a rule or bylaw of a national 
     securities exchange, a national securities association, or a 
     securities clearing agency, a right set forth in a bylaw of a 
     clearing organization or contract market or in a resolution 
     of the governing board thereof, and a right, whether or not 
     evidenced in writing, arising under common law, under law 
     merchant, or by reason of normal business practice.''.
       (l) Ancillary Proceedings.--Section 304 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(d) Any provisions of this title relating to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, or master netting agreements 
     shall apply in a case ancillary to a foreign proceeding under 
     this section or any other section of this title, so that 
     enforcement of contractual provisions of such contracts and 
     agreements in accordance with their terms--
       ``(1) shall not be stayed or otherwise limited by--
       ``(A) operation of any provision of this title; or
       ``(B) order of a court in any case under this title;
       ``(2) shall limit avoidance powers to the same extent as in 
     a proceeding under chapter 7 or 11; and
       ``(3) shall not be limited based on the presence or absence 
     of assets of the debtor in the United States.''.
       (m) Commodity Broker Liquidations.--Title 11, United States 
     Code, is amended by inserting after section 766 the 
     following:

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

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

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

       ``Notwithstanding any other provision of this title, the 
     exercise of rights by a forward contract merchant, commodity 
     broker, stockbroker, financial institution, securities 
     clearing agency, swap participant, repo participant, 
     financial participant, or master netting agreement 
     participant under this title shall not affect the priority of 
     any unsecured claim it may have after the exercise of such 
     rights.''.
       (o) Setoff.--Section 553 of title 11, United States Code, 
     is amended--
       (1) in subsection (a)(3)(C), by inserting ``(except for a 
     setoff of a kind described in section 362(b)(6), 362(b)(7), 
     362(b)(17), 362(b)[(19)] (28), 555, 556, 559, or 560)'' 
     before the period; and
       (2) in subsection (b)(1), by striking ``362(b)(14),'' and 
     inserting ``362(b)(17), [362(b)(19)] 362(b)(28), 555, 556, 
     559, 560,''.
       (p) Securities Contracts, Commodity Contracts, and Forward 
     Contracts.--Title 11, United States Code, is amended--
       (1) in section 362(b)(6), by striking ``financial 
     institutions,'' each place such term appears and inserting 
     ``financial institution, financial participant'';
       (2) in section 546(e), by inserting ``financial 
     participant'' after ``financial institution,'';
       (3) in section 548(d)(2)(B), by inserting ``financial 
     participant'' after ``financial institution,'';
       (4) in section 555--
       (A) by inserting ``financial participant'' after 
     ``financial institution,''; and
       (B) by inserting before the period ``, a right set forth in 
     a bylaw of a clearing organization or contract market or in a 
     resolution of the governing board thereof, and a right, 
     whether or not in writing, arising under common law, under 
     law merchant, or by reason of normal business practice''; and
       (5) in section 556, by inserting ``, financial 
     participant'' after ``commodity broker''.
       (q) Conforming Amendments.--Title 11 [of the United States 
     Code], United States Code, is amended--
       (1) in the table of sections for chapter 5--
       (A) by striking the items relating to sections 555 and 556 
     and inserting the following:

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

``559. Contractual right to liquidate, terminate, or accelerate a 
              repurchase agreement.
``560. Contractual right to liquidate, terminate, or accelerate a swap 
              agreement.'';
     and
       (C) by adding after the item relating to section 560 the 
     following:

``561. Contractual right to terminate, liquidate, accelerate, or offset 
              under a master netting agreement and across contracts.'';
     and
       (2) in the table of sections for chapter 7--
       (A) by inserting after the item relating to section 766 the 
     following:

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

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

     SEC. 902. DAMAGE MEASURE.

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

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

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

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

     SEC. 903. ASSET-BACKED SECURITIZATIONS.

       Section 541 of title 11, United States Code, is amended--
       (1) in subsection (b), by striking ``or'' at the end of 
     paragraph (4);
       (2) by redesignating paragraph (5) of subsection (b) as 
     paragraph (6);
       (3) by inserting after paragraph (4) of subsection (b) the 
     following new paragraph:
       ``(5) any eligible asset (or proceeds thereof), to the 
     extent that such eligible asset was transferred by the 
     debtor, before the date of commencement of the case, to an 
     eligible entity in connection with an asset-backed 
     securitization, except to the extent that such asset (or 
     proceeds or value thereof) may be recovered by the trustee 
     under section 550 by virtue of avoidance under section 
     548(a); or''; and
       (4) by adding at the end the following [new subsection]:
       ``(e) For purposes of this section, the following 
     definitions shall apply:
       ``(1) The term `asset-backed securitization' means a 
     transaction in which eligible assets transferred to an 
     eligible entity are used as the source of payment on 
     securities, the most senior of which are rated investment

[[Page 28408]]

     grade by 1 or more nationally recognized securities rating 
     organizations, issued by an issuer.
       ``(2) The term `eligible asset' means--
       ``(A) financial assets (including interests therein and 
     proceeds thereof), either fixed or revolving, including 
     residential and commercial mortgage loans, consumer 
     receivables, trade receivables, and lease receivables, that, 
     by their terms, convert into cash within a finite time 
     period, plus any rights or other assets designed to assure 
     the servicing or timely distribution of proceeds to security 
     holders;
       ``(B) cash; and
       ``(C) securities.
       ``(3) The term `eligible entity' means--
       ``(A) an issuer; or
       ``(B) a trust, corporation, partnership, or other entity 
     engaged exclusively in the business of acquiring and 
     transferring eligible assets directly or indirectly to an 
     issuer and taking actions ancillary thereto.
       ``(4) The term `issuer' means a trust, corporation, 
     partnership, or other entity engaged exclusively in the 
     business of acquiring and holding eligible assets, issuing 
     securities backed by eligible assets, and taking actions 
     ancillary thereto.
       ``(5) The term `transferred' means the debtor, under a 
     written agreement, represented and warranted that eligible 
     assets were sold, contributed, or otherwise conveyed with the 
     intention of removing them from the estate of the debtor 
     pursuant to subsection (b)(5), irrespective, without 
     limitation of--
       ``(A) whether the debtor directly or indirectly obtained or 
     held an interest in the issuer or in any securities issued by 
     the issuer;
       ``(B) whether the debtor had an obligation to repurchase or 
     to service or supervise the servicing of all or any portion 
     of such eligible assets; or
       ``(C) the characterization of such sale, contribution, or 
     other conveyance for tax, accounting, regulatory reporting, 
     or other purposes.''.

     SEC. 904. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--This title shall take effect on the 
     date of enactment of this Act.
       (b) Application of Amendments.--The amendments made by this 
     title shall apply with respect to cases commenced or 
     appointments made under any Federal or State law after the 
     date of enactment of this Act, but shall not apply with 
     respect to cases commenced or appointments made under any 
     Federal or State law before the date of enactment of this 
     Act.

                 TITLE X--PROTECTION OF FAMILY FARMERS

     SEC. 1001. REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--
       (1) In general.--Chapter 12 of title 11, United States 
     Code, as reenacted by section 149 of division C of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999 (Public Law 105-277), and amended by 
     this Act, is reenacted.
       (2) Effective date.--Subsection (a) shall take effect on 
     [April 1, 1999] October 1, 1999.
       (b) Conforming Amendment.--Section 302 of the Bankruptcy, 
     Judges, United States Trustees, and Family Farmer Bankruptcy 
     Act of 1986 (28 U.S.C. 581 note) is amended by striking 
     subsection (f).

     SEC. 1002. DEBT LIMIT INCREASE.

       Section 104(b) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(4) The dollar amount in section 101(18) shall be 
     adjusted at the same times and in the same manner as the 
     dollar amounts in paragraph (1) of this subsection, beginning 
     with the adjustment to be made on April 1, 2001.''.

     SEC. 1003. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND 
                   SPOUSE RECEIVE OVER 50 PERCENT OF INCOME FROM 
                   FARMING OPERATION IN YEAR PRIOR TO BANKRUPTCY.

       Section 101(18)(A) of title 11, United States Code, is 
     amended by striking ``the taxable year preceding the taxable 
     year'' and inserting ``at least 1 of the 3 calendar years 
     preceding the year''.

     SEC. 1004. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

       (a) Contents of Plan.--Section 1222(a)(2) of title 11, 
     United States Code, is amended to read as follows:
       ``(2) provide for the full payment, in deferred cash 
     payments, of all claims entitled to priority under section 
     507, unless--
       ``(A) the claim is a claim owed to a governmental unit that 
     arises as a result of the sale, transfer, exchange, or other 
     disposition of any farm asset used in the debtor's farming 
     operation, in which case the claim shall be treated as an 
     unsecured claim that is not entitled to priority under 
     section 507, but the debt shall be treated in such manner 
     only if the debtor receives a discharge; or
       ``(B) the holder of a particular claim agrees to a 
     different treatment of that claim; and''.
       (b) Special Notice Provisions.--Section 1231(d) of title 
     11, United States Code, is amended by striking ``a State or 
     local governmental unit'' and inserting ``any governmental 
     unit''.

              [TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

     [SEC. 1101. DEFINITIONS.

       [(a) Health Care Business Defined.--Section 101 of title 
     11, United States Code, as amended by section 1004(a) of this 
     Act, is amended--
       [(1) by redesignating paragraph (27A) as paragraph (27C); 
     and
       [(2) inserting after paragraph (27) the following:
       [``(27A) `health care business'--
       [``(A) means any public or private entity (without regard 
     to whether that entity is organized for profit or not for 
     profit) that is primarily engaged in offering to the general 
     public facilities and services for--
       [``(i) the diagnosis or treatment of injury, deformity, or 
     disease; and
       [``(ii) surgical, drug treatment, psychiatric or obstetric 
     care; and
       [``(B) includes--
       [``(i) any--

       [``(I) general or specialized hospital;
       [``(II) ancillary ambulatory, emergency, or surgical 
     treatment facility;
       [``(III) hospice;
       [``(IV) health maintenance organization;
       [``(V) home health agency; and
       [``(VI) other health care institution that is similar to an 
     entity referred to in subclause (I), (II), (III), (IV), or 
     (V); and

       [``(ii) any long-term care facility, including any--

       [``(I) skilled nursing facility;
       [``(II) intermediate care facility;
       [``(III) assisted living facility;
       [``(IV) home for the aged;
       [``(V) domicilary care facility; and
       [``(VI) health care institution that is related to a 
     facility referred to in subclause (I), (II), (III), (IV), or 
     (V), if that institution is primarily engaged in offering 
     room, board, laundry, or personal assistance with activities 
     of daily living and incidentals to activities of daily 
     living;''.

       [(b) Health Maintenance Organization Defined.--Section 101 
     of title 11, United States Code, as amended by subsection 
     (a), is amended by inserting after paragraph (27A) the 
     following:
       [``(27B) `health maintenance organization' means any person 
     that undertakes to provide or arrange for basic health care 
     services through an organized system that--
       [``(A)(i) combines the delivery and financing of health 
     care to enrollees; and
       [``(ii)(I) provides--
       [``(aa) physician services directly through physicians or 1 
     or more groups of physicians; and
       [``(bb) basic health care services directly or under a 
     contractual arrangement; and
       [``(II) if reasonable and appropriate, provides physician 
     services and basic health care services through arrangements 
     other than the arrangements referred to in clause (i); and
       [``(B) includes any organization described in subparagraph 
     (A) that provides, or arranges for, health care services on a 
     prepayment or other financial basis;''.
       [(c) Patient.--Section 101 of title 11, United States Code, 
     as amended by subsection (b), is amended by inserting after 
     paragraph (40) the following:
       [``(40A) `patient' means any person who obtains or receives 
     services from a health care business;''.
       [(d) Patient Records.--Section 101 of title 11, United 
     States Code, as amended by subsection (c), is amended by 
     inserting after paragraph (40A) the following:
       [``(40B) `patient records' means any written document 
     relating to a patient or record recorded in a magnetic, 
     optical, or other form of electronic medium;''.

     [SEC. 1102. DISPOSAL OF PATIENT RECORDS.

       [(a) In General.--Subchapter III of chapter 3 of title 11, 
     United States Code, is amended by adding at the end the 
     following:

     [``Sec. 351. Disposal of patient records

       [``If a health care business commences a case under chapter 
     7, 9, or 11, and the trustee does not have a sufficient 
     amount of funds to pay for the storage of patient records in 
     the manner required under applicable Federal or State law, 
     the following requirements shall apply:
       [``(1) The trustee shall mail, by certified mail, a written 
     request to each appropriate Federal or State agency to 
     request permission from that agency to deposit the patient 
     records with that agency.
       [``(2) If no appropriate Federal or State agency agrees to 
     permit the deposit of patient records referred to in 
     paragraph (1) by the date that is 60 days after the trustee 
     mails a written request under that paragraph, the trustee 
     shall--
       [``(A) publish notice, in 1 or more appropriate newspapers, 
     that if those patient records are not claimed by the patient 
     or an insurance provider (if applicable law permits the 
     insurance provider to make that claim) by the date that is 60 
     days after the date of that notification, the trustee will 
     destroy the patient records; and
       [``(B) during the 60-day period described in subparagraph 
     (A), the trustee shall attempt to notify directly each 
     patient that is the subject of the patient records concerning 
     the patient records by mailing to the last known address of 
     that patient an appropriate notice regarding the claiming or 
     disposing of patient records.
       [``(3) If, after providing the notification under paragraph 
     (2), patient records are not claimed during the 60-day period 
     described in paragraph (2)(A) or in any case in which a

[[Page 28409]]

     notice is mailed under paragraph (2)(B), during the 90-day 
     period beginning on the date on which the notice is mailed, 
     by a patient or insurance provider in accordance with that 
     paragraph, the trustee shall destroy those records by--
       [``(A) if the records are written, shredding or burning the 
     records; or
       [``(B) if the records are magnetic, optical, or other 
     electronic records, by otherwise destroying those records so 
     that those records cannot be retrieved.''.
       [(b) Clerical Amendment.--The chapter analysis for chapter 
     3 of title 11, United States Code, is amended by inserting 
     after the item relating to section 350 the following:

[``351. Disposal of patient records.''.

     [SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING 
                   A HEALTH CARE BUSINESS.

       [Section 503(b) of title 11, United States Code, is 
     amended--
       [(1) in paragraph (5), by striking ``and'' at the end;
       [(2) in paragraph (6), by striking the period at the end 
     and inserting ``; and''; and
       [(3) by adding at the end the following:
       [``(7) the actual, necessary costs and expenses of closing 
     a health care business incurred by a trustee, including any 
     cost or expense incurred--
       [``(A) in disposing of patient records in accordance with 
     section 351; or
       [``(B) in connection with transferring patients from the 
     health care business that is in the process of being closed 
     to another health care business.''.

     [SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT 
                   ADVOCATE.

       [(a) In General.--
       [(1) Appointment of ombudsman.--Subchapter II of chapter 3 
     of title 11, United States Code, is amended by inserting 
     after section 331 the following:

     [``Sec. 332. Appointment of ombudsman

       [``(a) Not later than 30 days after a case is commenced by 
     a health care business under chapter 7, 9, or 11, the court 
     shall appoint an ombudsman to represent the interests of the 
     patients of the health care business.
       [``(b) An ombudsman appointed under subsection (a) shall--
       [``(1) monitor the quality of patient care, to the extent 
     necessary under the circumstances, including reviewing 
     records and interviewing patients and physicians;
       [``(2) not later than 60 days after the date of 
     appointment, and not less frequently than every 60 days 
     thereafter, report to the court, at a hearing or in writing, 
     regarding the quality of patient care at the health care 
     business involved; and
       [``(3) if the ombudsman determines that the quality of 
     patient care is declining significantly or is otherwise being 
     materially compromised, notify the court by motion or written 
     report, with notice to appropriate parties in interest, 
     immediately upon making that determination.
       [``(c) An ombudsman shall maintain any information obtained 
     by the ombudsman under this section that relates to patients 
     (including information relating to patient records) as 
     confidential information.''.
       [(2) Clerical amendment.--The chapter analysis for chapter 
     3 of title 11, United States Code, is amended by inserting 
     after the item relating to section 331 the following:

[``332. Appointment of ombudsman.''.
       [(b) Compensation of Ombudsman.--Section 330(a)(1) of title 
     11, United States Code, is amended--
       [(1) in the matter proceeding subparagraph (A), by 
     inserting ``an ombudsman appointed under section 331, or'' 
     before ``a professional person''; and
       [(2) in subparagraph (A), by inserting ``ombudsman,'' 
     before ``professional person''.

     [SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER 
                   PATIENTS.

       [(a) In General.--Section 704(a) of title 11, United States 
     Code, as amended by section 219 of this Act, is amended--
       [(1) in paragraph (9), by striking ``and'' at the end;
       [(2) in paragraph (10), by striking the period and 
     inserting ``; and''; and
       [(3) by adding at the end the following:
       [``(11) use all reasonable and best efforts to transfer 
     patients from a health care business that is in the process 
     of being closed to an appropriate health care business that--
       [``(A) is in the vicinity of the health care business that 
     is closing;
       [``(B) provides the patient with services that are 
     substantially similar to those provided by the health care 
     business that is in the process of being closed; and
       [``(C) maintains a reasonable quality of care.''.
       [(b) Conforming Amendment.--Section 1106(a)(1) of title 11, 
     United States Code, is amended by striking ``and 704(9)'' and 
     inserting ``704(9), and 704(10)''.]

                  TITLE [XII] XI--TECHNICAL AMENDMENTS

     SEC. [1201.] 1101. DEFINITIONS.

       Section 101 of title 11, United States Code, as amended by 
     section [1101] 1003 of this Act, is amended--
       (1) by striking ``In this title--'' and inserting ``In this 
     title:'';
       (2) in each paragraph, by inserting ``The term'' after the 
     paragraph designation;
       (3) in paragraph (35)(B), by striking ``paragraphs (21B) 
     and (33)(A)'' and inserting ``paragraphs (23) and (35)'';
       (4) in each of paragraphs (35A) and (38), by striking ``; 
     and'' at the end and inserting a period;
       (5) in paragraph (51B)--
       (A) by inserting ``who is not a family farmer'' after 
     ``debtor'' the first place it appears; and
       (B) by striking ``thereto having aggregate'' and all that 
     follows through the end of the paragraph;
       (6) by striking paragraph (54) and inserting the following:
       ``(54) The term `transfer' means--
       ``(A) the creation of a lien;
       ``(B) the retention of title as a security interest;
       ``(C) the foreclosure of a debtor's equity of redemption; 
     or
       ``(D) each mode, direct or indirect, absolute or 
     conditional, voluntary or involuntary, of disposing of or 
     parting with--
       ``(i) property; or
       ``(ii) an interest in property;'';
       (7) in each of paragraphs (1) through (35), in each of 
     paragraphs (36) and (37), and in each of paragraphs (40) 
     through (55) (including paragraph (54), as amended by 
     paragraph (6) of this section), by striking the semicolon at 
     the end and inserting a period; and
       (8) by redesignating paragraphs (4) through (55), including 
     paragraph (54), as amended by paragraph (6) of this section, 
     in entirely numerical sequence.

     SEC. [1202.] 1102. ADJUSTMENT OF DOLLAR AMOUNTS.

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

     SEC. [1203.] 1103. EXTENSION OF TIME.

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

     SEC. [1204.] 1104. TECHNICAL AMENDMENTS.

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

     SEC. [1205.] 1105. PENALTY FOR PERSONS WHO NEGLIGENTLY OR 
                   FRAUDULENTLY PREPARE BANKRUPTCY PETITIONS.

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

     SEC. [1206.] 1106. LIMITATION ON COMPENSATION OF PROFESSIONAL 
                   PERSONS.

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

     SEC. [1207.] 1107. SPECIAL TAX PROVISIONS.

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

     SEC. [1208.] 1108. EFFECT OF CONVERSION.

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

     SEC. [1209.] 1109. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

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

     [SEC. 1210. PRIORITIES.

       [Section 507(a) of title 11, United States Code, as amended 
     by sections 211 and 229 of this Act, is amended--
       [(1) in paragraph (4)(B), by striking the semicolon at the 
     end and inserting a period; and
       [(2) in paragraph (8), by inserting ``unsecured'' after 
     ``allowed''.

     [SEC. 1211. EXEMPTIONS.

       [Section 522(g)(2) of title 11, United States Code, as 
     amended by section 311 of this Act, is amended by striking 
     ``subsection (f)(2)'' and inserting ``subsection 
     (f)(1)(B)''.]

     SEC. [1212.] 1110. EXCEPTIONS TO DISCHARGE.

       Section 523 of title 11, United States Code, as amended by 
     section [229] 714 of this Act, is amended--
       (1) as amended by section 304(e) of Public Law 103-394 (108 
     Stat. 4133), in paragraph (15), by transferring such 
     paragraph so as to insert [it] such paragraph after paragraph 
     (14) of subsection (a);
       [(2) in subsection (a)--
       [(A) in paragraph (3), by striking ``or (6)'' each place it 
     appears and inserting ``(6), or (15)'';
       [(B) in paragraph (9), by striking ``motor vehicle or 
     vessel'' and inserting ``motor vehicle, vessel, or 
     aircraft''; and
       [(C) in paragraph (15), as so redesignated by paragraph (1) 
     of this subsection, by inserting ``to a spouse, former 
     spouse, or child of the debtor and'' after ``(15)''; and]
       (2) in subsection (a)(9), by striking ``motor vehicle or 
     vessel'' and inserting ``motor vehicle, vessel, or 
     aircraft''; and
       (3) in subsection (e), by striking ``a insured'' and 
     inserting ``an insured''.

     SEC. [1213.] 1111. EFFECT OF DISCHARGE.

       Section 524(a)(3) of title 11, United States Code, is 
     amended by striking ``section 523''

[[Page 28410]]

     and all that follows through ``or that'' and inserting 
     ``section 523, 1228(a)(1), or 1328(a)(1), or that''.

     SEC. [1214.] 1112. PROTECTION AGAINST DISCRIMINATORY 
                   TREATMENT.

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

     SEC. [1215.] 1113. PROPERTY OF THE ESTATE.

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

     SEC. [1216.] 1114. PREFERENCES.

       (a) In General.--Section 547 of title 11, United States 
     Code, as amended by section 201(b) of this Act, is amended--
       (1) in subsection (b), by striking ``subsection (c)'' and 
     inserting ``subsections (c) and (i)''; and
       (2) by adding at the end the following:
       ``(i) If the trustee avoids under subsection (b) a security 
     interest given between 90 days and 1 year before the date of 
     the filing of the petition, by the debtor to an entity that 
     is not an insider for the benefit of a creditor that is an 
     insider, such security interest shall be considered to be 
     avoided under this section only with respect to the creditor 
     that is an insider.''.
       (b) Applicability.--The amendments made by this section 
     shall apply to any case that pending or commenced on or after 
     the date of enactment of this Act.

     SEC. [1217.] 1115. POSTPETITION TRANSACTIONS.

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

     SEC. [1218.] 1116. DISPOSITION OF PROPERTY OF THE ESTATE.

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

     SEC. [1219.] 1117. GENERAL PROVISIONS.

       Section 901(a) of title 11, United States Code, as amended 
     by section [901(k)] 502 of this Act, is amended by inserting 
     ``1123(d),'' after ``1123(b),''.

     SEC. [1220.] 1118. ABANDONMENT OF RAILROAD LINE.

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

     SEC. [1221.] 1119. CONTENTS OF PLAN.

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

     SEC. [1222.] 1120. DISCHARGE UNDER CHAPTER 12.

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

     SEC. [1223.] 1121. BANKRUPTCY CASES AND PROCEEDINGS.

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

     SEC. [1224.] 1122. KNOWING DISREGARD OF BANKRUPTCY LAW OR 
                   RULE.

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

     SEC. [1225.] 1123. TRANSFERS MADE BY NONPROFIT CHARITABLE 
                   CORPORATIONS.

       (a) Sale of Property of Estate.--Section 363(d) of title 
     11, United States Code, is amended by striking ``only'' and 
     all that follows through the end of the subsection and 
     inserting ``only--
       ``(1) in accordance with applicable nonbankruptcy law that 
     governs the transfer of property by a corporation or trust 
     that is not a moneyed, business, or commercial corporation or 
     trust; and
       ``(2) to the extent not inconsistent with any relief 
     granted under subsection (c), (d), (e), or (f) of section 
     362.''.
       (b) Confirmation of Plan for Reorganization.--Section 
     1129(a) of title 11, United States Code, as amended by 
     section 212 of this Act, is amended by adding at the end the 
     following:
       ``(15) All transfers of property of the plan shall be made 
     in accordance with any applicable provisions of nonbankruptcy 
     law that govern the transfer of property by a corporation or 
     trust that is not a moneyed, business, or commercial 
     corporation or trust.''.
       (c) Transfer of Property.--Section 541 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(f) Notwithstanding any other provision of this title, 
     property that is held by a debtor that is a corporation 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986 and exempt from tax under section 501(a) of such Code 
     may be transferred to an entity that is not such a 
     corporation, but only under the same conditions as would 
     apply if the debtor had not filed a case under this title.''.
       (d) Applicability.--The amendments made by this section 
     shall apply to a case pending under title 11, United States 
     Code, on the date of enactment of this Act, except that the 
     court shall not confirm a plan under chapter 11 of this title 
     without considering whether this section would substantially 
     affect the rights of a party in interest who first acquired 
     rights with respect to the debtor after the date of the 
     petition. The parties who may appear and be heard in a 
     proceeding under this section include the attorney general of 
     the State in which the debtor is incorporated, was formed, or 
     does business.
       (e) Rule of Construction.--Nothing in this section shall be 
     construed to require the court in which a case under chapter 
     11 is pending to remand or refer any proceeding, issue, or 
     controversy to any other court or to require the approval of 
     any other court for the transfer of property.

     SEC. [1226.] 1124. PROTECTION OF VALID PURCHASE MONEY 
                   SECURITY INTERESTS.

       Section 547(c)(3)(B) of title 11, United States Code, is 
     amended by striking ``20'' and inserting ``30''.

     SEC. [1227.] 1125. EXTENSIONS.

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

     SEC. [1228.] 1126. BANKRUPTCY JUDGESHIPS.

       (a) Short Title.--This section may be cited as the 
     ``Bankruptcy Judgeship Act of 1999''.
       (b) Temporary Judgeships.--
       (1) Appointments.--The following judgeship positions shall 
     be filled in the manner prescribed in section 152(a)(1) of 
     title 28, United States Code, for the appointment of 
     bankruptcy judges provided for in section 152(a)(2) of such 
     title:
       (A) One additional bankruptcy judgeship for the eastern 
     district of California.
       (B) Four additional bankruptcy judgeships for the central 
     district of California.
       (C) One additional bankruptcy judgeship for the southern 
     district of Florida.
       (D) Two additional bankruptcy judgeships for the district 
     of Maryland.
       (E) One additional bankruptcy judgeship for the eastern 
     district of Michigan.
       (F) One additional bankruptcy judgeship for the southern 
     district of Mississippi.
       (G) One additional bankruptcy judgeship for the district of 
     New Jersey.
       (H) One additional bankruptcy judgeship for the eastern 
     district of New York.
       (I) One additional bankruptcy judgeship for the northern 
     district of New York.
       (J) One additional bankruptcy judgeship for the southern 
     district of New York.
       (K) One additional bankruptcy judgeship for the eastern 
     district of Pennsylvania.
       (L) One additional bankruptcy judgeship for the middle 
     district of Pennsylvania.
       (M) One additional bankruptcy judgeship for the western 
     district of Tennessee.
       (N) One additional bankruptcy judgeship for the eastern 
     district of Virginia.
       (2) Vacancies.--The first vacancy occurring in the office 
     of a bankruptcy judge in each of the judicial districts set 
     forth in paragraph (1) that--
       (A) results from the death, retirement, resignation, or 
     removal of a bankruptcy judge; and
       (B) occurs 5 years or more after the appointment date of a 
     bankruptcy judge appointed under paragraph (1);

     shall not be filled.
       (c) Extensions.--
       (1) In general.--The temporary bankruptcy judgeship 
     positions authorized for the northern district of Alabama, 
     the district of Delaware, the district of Puerto Rico, the 
     district of South Carolina, and the eastern district of 
     Tennessee under section 3(a) (1), (3), (7), (8), and (9) of 
     the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) are 
     extended until the first vacancy occurring in the office of a 
     bankruptcy judge in the applicable district resulting from 
     the death, retirement, resignation, or removal of a 
     bankruptcy judge and occurring--
       (A) 8 years or more after November 8, 1993, with respect to 
     the northern district of Alabama;
       (B) 10 years or more after October 28, 1993, with respect 
     to the district of Delaware;
       (C) 8 years or more after August 29, 1994, with respect to 
     the district of Puerto Rico;
       (D) 8 years or more after June 27, 1994, with respect to 
     the district of South Carolina; and

[[Page 28411]]

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

  TITLE [XIII] XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

     SEC. [1301.] 1201. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

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

  The committee amendments were agreed to.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, before we start this very important 
bankruptcy reform legislation, first, thanks for working out the 
necessary parliamentary arrangements for bringing this bill up are owed 
to our majority leader, the Senator from Mississippi, and our minority 
leader, the Democratic leader, the Senator from South Dakota. So I 
thank them very much.
  Then secondly, not only because this bill is up now on the floor of 
the Senate but also for the process of getting it through the Judiciary 
Committee, we, obviously, thank the Senator from Utah, the chairman of 
the Judiciary Committee, Mr. Hatch, for his leadership at the level of 
the committee and for a lot of things that had to be worked out to get 
us to the floor. And also thanks to the Senator from Vermont, the 
ranking Democratic member of the Judiciary Committee, for his 
cooperation.
  Since the beginning of the year, I have had the opportunity to work 
with the ranking minority member of our subcommittee that I chair, the 
Subcommittee on Administrative Oversight and the Courts, the Senator 
from New Jersey, Mr. Torricelli. Working with him has been a real 
treat, always with efforts to reach agreement. And for people 
throughout this country who have a tendency to be cynical about 
Washington, because of the lack of cooperation between the Democratic 
Party and the Republican Party, I wish they could feel the working 
relationship Senator Torricelli, a Democrat, and I have had working on 
this legislation from its original introduction, with his not agreeing 
to everything I introduced--he was a cosponsor--but with a spirit that 
throughout this process, which has gone on since January to this point 
of bringing the bill up on the floor of the Senate, that we would work 
cooperatively and in a spirit of cooperation to reach further 
compromises. I hope that brings us to a point where we do not have a 
lot of controversial amendments on the floor of the Senate, at least as 
they relate to the bankruptcy subject, the relevant amendments.
  There will be a lot of amendments that have been in this bipartisan 
unanimous-consent agreement that are considered nongermane amendments, 
which will be brought up, that are controversial. We expected that to 
be part of the process. But for the amendments we have that relate to 
bankruptcy, I think there will be a lot fewer amendments because of the 
cooperation Senator Torricelli has shown in this compromise.
  For the second time in 2 years, the Senate is considering fundamental 
bankruptcy reform. Last year, we passed a bankruptcy reform bill but 
the Senate was prevented from considering the final conference report 
at the very end of the 105th Congress. This year, we have the chance to 
finish this important work. We've been waiting for some time to get 
this bill up on the floor, and now that we're here, I'm anxious to 
begin the debate.
  Bankruptcy is one of the most complicated subjects we will consider 
this year. So, at the outset, Mr. President, I think it's important for 
me as the chairman of the subcommittee with jurisdiction over 
bankruptcy to take a few minutes to describe what bankruptcy reform is 
really all about in commonsense terms that we can all understand. 
Simply put, bankruptcy is a court proceeding where people get their 
debts wiped away. Every time a debt is wiped away through bankruptcy 
somebody loses money. That's plain and simple common sense. Of course, 
when somebody who extends credit has their obligation wiped away in 
bankruptcy, they are forced to make a decision. Should this loss simply 
be swallowed as a cost of business? Or do you raise prices for other 
customers to make up for your losses?
  When bankruptcy losses are rare or infrequent, lenders can just 
swallow the loss. But when bankruptcies are frequent and common, 
lenders have to raise their prices to offset losses. For this reason, 
Treasury Secretary Larry Summers testified at his confirmation hearing 
before the Senate Finance Committee that bankruptcies tend to drive up 
interest rates. Mr. President, if you believe Secretary Summers, 
bankruptcies are everyone's problem. Regular hardworking Americans have 
to pay higher prices for goods and services as a result of 
bankruptcies. The bankruptcy bill we're considering will discourage 
bankruptcies, and therefore lessen upward pressure on interest rates 
and higher prices by making it harder for people who can repay their 
debts to wipe them away. It seems like common sense to require people 
who can repay their debts to pull their own weight. But under our 
current bankruptcy laws, someone can get full debt cancellation in 
chapter 7 with no questions asked. If we pass S. 625, bankruptcy judges 
and trustees will start asking questions about ability to repay. And, 
if someone seeking bankruptcy can repay, they will be channeled into 
Chapter 13 of the Bankruptcy Code, which requires people to repay some 
portion of their debts as a pre-condition for limited debt 
cancellation. Of course, people who can't repay can still use the 
bankruptcy system as they would have before. But, for people with 
higher incomes who can repay their debts, the free ride will be over.
  The basic bankruptcy policy question the Senate has to answer is 
this:

[[Page 28412]]

Should people with means be required to pay at least some of their 
debts under Chapter 13 or not? Right now, the current bankruptcy system 
is oblivious to the financial condition of someone asking to be excused 
from paying his debts. The richest captain of industry could walk into 
a Bankruptcy Court tomorrow and walk out with his debts erased. And, as 
I described earlier, the rest of America will pay higher prices for 
goods and services as a result.
  I would ask my colleagues to think about that for a second. If we had 
no bankruptcy system at all, and we were starting from scratch, would 
we design a system that lets the rich walk away from their debts and 
shift the costs to society at large, including the poor and the middle 
class? I don't think that any of us here would design such a system. 
But somehow, that's exactly the system we have now. I could easily 
imagine the fiery rhetoric from our more liberal friends if we on the 
Republican side were to even suggest that the Senate create a 
bankruptcy system that lets the wealthy and the well-to-do walk away 
from their debts and stick working Americans with the tab. But we have 
just such a system in place today.
  Mr. President, if Senators ask themselves the question ``Who wins and 
who loses under current law, and who will win and who will lose if we 
pass S. 625,'' then I think that the importance of bankruptcy reform 
becomes pretty obvious. If you believe President Clinton's own Treasury 
Secretary, society at large loses under the current system when 
bankruptcies drive up interest rates. Of course, it's the deadbeats who 
walk away from their debts who win under the current system. If we pass 
this bill, then the American people will win as upward pressure on 
interest rates and prices is removed. And people who look at bankruptcy 
as a convenient financial planning tool will lose.
  Mr. President, I think our situation is urgent. Our bankruptcy system 
is spiraling out of control. These are good times in our Nation. Thanks 
to the fiscal discipline initiated by Congress, and the hard work of 
the American people, we have the first balanced budget in a generation. 
Unemployment is low, we have a burgeoning stock market and most 
Americans are optimistic about the future. But in the midst of such 
prosperity, about one and a half million Americans declared bankruptcy 
just in 1998. Based on filings for the first two quarters of 1999, it 
looks like there will be just under 1.4 million bankruptcy filings for 
this year. To put this in some historical context, since 1990 the rate 
of personal bankruptcy filings has increased almost 100 percent. Now, I 
don't think that anyone knows all the reasons underlying the bankruptcy 
crisis. But I think I can talk about what's not at the root of the 
bankruptcy crisis. I have a chart here that shows the dramatic increase 
in bankruptcies since 1993. During the same timeframe, as the chart 
shows, unemployment has declined just as dramatically and real wages 
have risen to an all-time high.
  The economic numbers tell us that the bankruptcy crisis isn't the 
result of people who can't get jobs. And the jobs that people do have 
are paying more than ever. So, the bankruptcy crisis isn't about 
desperate people confronting layoffs and underemployment. With the 
economy doing so well, and with so many Americans with high-quality, 
good-paying jobs, we have to look deep into the eroding moral values of 
some to find out what's driving the bankruptcy crisis. Some people flat 
out don't want to honor their obligations and are looking for an easy 
way out. In the opinion of this Senator, a significant part of the 
bankruptcy crisis is basically a moral crisis. Some people just don't 
have a sense of personal responsibility.
  It seems clear to me that our lax bankruptcy system must bear some of 
the blame for the bankruptcy crisis. Just as the welfare system we used 
to have encouraged people not to get jobs and encouraged people not to 
even think about pulling their own weight, our lax bankruptcy system 
doesn't even ask people to consider paying what they owe. Such a system 
obviously contributes to the fraying of the moral fiber of our Nation. 
Why pay your bills when you can walk away with no questions asked? Why 
honor your obligations when you can take the easy way out through 
bankruptcy? If we don't tighten the bankruptcy system, this moral 
erosion will certainly continue.
  Mr. President, the polls are very clear that the American people want 
the bankruptcy system tightened up. In my home State of Iowa, 78 
percent of Iowans surveyed favor bankruptcy reform. And the picture is 
the same nationally. According to the PBS program ``Techno-Politics,'' 
almost 70 percent of Americans support bankruptcy reform. The American 
people seem to sense that the bankruptcy crisis is fundamentally a 
moral crisis. According to a poll conducted by the Democratic polling 
firm of Penn & Schoen on perceptions of bankruptcy, 84 percent of 
Americans think that bankruptcy is more socially acceptable today than 
a few years ago. Of course, Penn & Schoen is a Democratic polling firm 
used by President Clinton. So, I think that this number is very telling 
given that it was produced by a liberal polling firm.
  In my State of Iowa, the editorial page of the Des Moines Register 
has summed up the problem we have with the bankruptcy system by stating 
that bankruptcy ``was never intended as the one-stop, no-questions-
asked solution to irresponsibility.'' I totally agree. So, let's look 
at the situation we face today. We have a bankruptcy system which 
fosters irresponsibility and which operates as a regressive system for 
redistributing economic resources from America's working families to 
the wealthy. In effect, blue collar factory workers are paying the tab 
for well-compensated professionals to live high on the hog.
  Mr. President, as we move forward to debate bankruptcy reform, I 
believe that we must keep in mind the fact that the bankruptcy crisis 
is both an economic problem and moral problem. If we pass meaningful 
bankruptcy reform this year, as I hope and expect that we will, the 
Senate can remove a drag on the economy and at the same time contribute 
the rebuilding of our Nation's moral foundations.
  Mr. President, over 30 years ago, Senator Albert Gore, Sr.--the 
father of the Vice-President--introduced a bill to means-test Chapter 7 
debtors. In his introductory statement, in words that still ring true 
today, he described the similarities between special tax loopholes and 
lax bankruptcy laws. Senator Gore said that bankruptcy is like a 
special interest tax loophole in that someone gets out of paying his 
fair share at the expense of hardworking Americans who play by the 
rules. I think that Senator Gore had it exactly right all the way back 
then.
  In the last Congress we almost closed the Chapter 7 loophole. The 
Senate and House both passed good bills, and we made them both better 
in a conference report that received overwhelming bipartisan support in 
the other body. But we ran out of time in the Senate. I've made every 
effort to be fair and bipartisan throughout this process. When Senator 
Torricelli became my ranking member at the beginning of this year, I 
went to him and asked him to work with me on a new bankruptcy bill. 
Senator Torricelli asked for several modifications to last year's 
bankruptcy bill to respond to concerns raised by Members on his side of 
the aisle. I agree to make many of these changes. The means-test is 
much more flexible in this year's bill, giving judges greater 
discretion to consider the individual circumstances of each debtor. The 
bill contains much tougher penalties for using threats to coerce 
debtors into paying debts which could be wiped away once they are in 
bankruptcy. The bill also requires the Justice Department to 
concentrate law enforcement resources on enforcing consumer protection 
laws against abusive debt collection practices, and allows State law 
enforcement to enforce State consumer protections in bankruptcy court. 
The committee report lists these modifications in greater detail and 
summarizes the major changes from last year's conference report. Mr. 
President, when all of these many

[[Page 28413]]

changes are considered in a fair and reasonable way, I believe that it 
will be clear that a great majority of Senators can support S. 625 as 
it is right now. But there's more. The Grassley-Torricelli amendment 
contains even more changes to ensure that lower income Americans are 
not disadvantaged by this reform. A provision to impose personal 
liability on debtor attorneys--which I strongly suppport--has been 
removed. And the Grassley-Torricelli amendment contains numerous 
changes to the small business title of the bankruptcy bill to add new 
flexibility.
  Shortly, I will cosponsor an amendment with Senator Torricelli to 
require credit card companies to give consumers meaningful information 
about minimum payments on credit cards. Consumers will be warned 
against making only minimum payments, and there will be an example to 
drive this point home. Finally, consumers will be given a toll-free 
phone number to call where they can get information about how long it 
will take to pay off their own credit card balances if they make only 
the minimum payments. This new information will truly educate 
consumers. This new information will improve the financial literacy of 
American consumers.
  In the Judiciary Committee, S. 625 was passed on a strong, bipartisan 
vote of 14-4. All Republicans and half of the Democrats voted for the 
bill. So, we have a good bill and one that most Members of the Senate 
should be able to support at the end of the day. With so many consumer 
protections and disclosures, I'm confident that the Senate will pass S. 
625 with strong support.
  In addition to benefitting society at large, lessening upward 
pressures on interest rates, S. 625 makes a number of changes which I 
believe will be very beneficial to especially vulnerable segments of 
our society. Child support claimants have been given the highest 
priority when the assets of a bankruptcy estate are distributed to 
creditors. Bankruptcy trustees and creditors of bankrupts are required 
to give information about the location of deadbeat parents who owe 
child support, turning our bankruptcy courts into a low cost locator 
service for custodial parents. And finally, under S. 625 parents owning 
child support can erase a wider array of debts than is typically the 
case, thereby preventing private creditors from competing with child 
support claims in a post-bankruptcy environment. This is an important 
point that I think everyone should realize. Under the Senate bill, 
child support will never compete with private creditors after 
bankruptcy. This is a unique feature of this year's Senate bill, so 
many Members may not be aware of it. I would ask Senators interested in 
child support and bankruptcy to study section 314 of the bill.
  S. 625 also makes Chapter 12 of the Bankruptcy Code permanent. This 
means that America's family farms are guaranteed the ability to 
reorganize as our farm economy continues to be weak. As we all know 
from our recent debate on emergency farm aid, while prices have 
rebounded somewhat recently, farmers in my home State of Iowa and 
across the Nation are getting some of the lowest prices ever for pork, 
corn and soybeans. Clearly, this bill is an important step in 
preserving the integrity of our farming economy and preserving the 
family farm.
  S. 625 contains changes to deal with the complex problem of 
international bankruptcies. S. 625 will speed up the Chapter 11 process 
for small businesses and will reduce the risk of domino-like failures 
in financial markets.
  In Conclusion, S. 625 is good for family farmers, good for small 
businesses, good for single parents who depend on child support and 
good for consumers. If you care about making people in string financial 
shape pull their own weight, you should vote for this bill. If you care 
about the lax morality associated with letting people who have the 
clear ability to pay walk away from their debts with no question asked, 
you should vote for this bill. When the time comes, I'm sure that 
common sense will reign and the Senate will pass S. 625, with strong 
support.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I am pleased we are finally considering the 
Bankruptcy Reform Act of 1999. I would like to express my personal 
appreciation to Senator Lott for his efforts, along with those of 
Senator Daschle, which resulted in this opportunity for floor 
consideration of the bill. Also, I am grateful for the hard work of 
Senator Grassley, the chairman of the Judiciary Committee's 
Subcommittee on Administrative Oversight and the Courts, along with 
Senator Torricelli, the ranking Member of the subcommittee, for their 
tireless efforts in working out this bipartisan bill. I also thank 
Senators Sessions, Biden, and others for their dedication and hard work 
on this bankruptcy reform bill.
  As I have said before, I remain confident that given the opportunity 
to consider the merits of this legislation, the Senate will pass this 
bill with overwhelming, bipartisan support. As we consider S. 625, I am 
hopeful that we will keep in mind the broad support for the substance 
of this important legislation. I hope we will see quick passage of 
these much needed reforms to the bankruptcy system, because the reform 
proposals have been studied by Congress at length, they are bipartisan, 
and they are fair.
  First, the reforms proposed in this bill have been deliberated at 
length. Indeed, Congress has been engaged in the consideration of this 
issue for several years, and the Subcommittee on Administrative 
Oversight and the Courts, which is chaired by Senator Grassley, has 
held numerous hearings on the issue of bankruptcy reform. The 
subcommittee heard extensive testimony from literally dozens of 
witnesses on this subject.
  Second, this bill is truly bipartisan. During our consideration of 
this bill at both the subcommittee and full Judiciary Committee levels, 
numerous changes suggested by the minority were included in the bill. 
We have been able to reach a number of compromises on this legislation 
in order to respond to the concern of both parties. I would like to 
take this opportunity to once again thank Senators Grassley and 
Torricelli for their bipartisan efforts to create this balanced bill.
  Finally, this bill is fair. One of the principles that guided the 
authors of our country's original bankruptcy laws, and which is guiding 
us as we overhaul these laws today, is the concept of a fresh start. 
The bankruptcy system was designed to provide a fresh start to people 
in serious financial difficulty, who have no other way out of their 
predicament. Mr. President, S. 625 does just that. It ensures that 
people in the most serious financial difficulty will continue to have 
access to the debt relief they need. At the same time, this legislation 
ensures that more of the people who have the capacity to repay their 
debts are required to do so.
  Depending on what study you believe, anywhere from 6 to 15 percent of 
bankruptcy filers are using bankruptcy as a financial planning tool, 
running up debts and erasing them under laws that consider income 
irrelevant--all without any noticeable impact on their lifestyle. I 
would doubt that any of my colleagues feel that these are the sort of 
filers who need a fresh start. What they need is a lesson in personal 
responsibility.
  I believe that S.625 accomplishes both goals. The bill continues to 
make bankruptcy an accessible option for those who truly need it. But, 
it makes it more difficult for spendthrifts--those people who have no 
desire to change their excessive lifestyles and see bankruptcy as a 
convenient way to erase their debts.
  It is no secret that the current bankruptcy system is broken and that 
Congress must fix it to preserve the opportunity for those individuals 
in financial straits to obtain a ``fresh start.'' Despite this 
country's strong economy--unemployment is down and inflation is low--
the rate of personal bankruptcy filings has increased dramatically. 
Instead of bankruptcy being a safety net, it has become for some a 
convenient financial management tool.
  I find it unacceptable and inherently unfair that those who pay their 
bills

[[Page 28414]]

have to foot the bill for those who are able to pay, but choose not to. 
It has been conservatively estimated that personal bankruptcies cost 
every household $400 per year, and it takes fifteen responsible 
borrowers to cover the cost of one bankruptcy of convenience.
  The goal of our bankruptcy system has always been to protect those 
who need protecting--to provide those who experience genuine and 
serious financial hardship the opportunity to wipe the slate clean. We 
must return our system back to its original mission.
  Bankruptcy reform is not a Republican or a Democratic issue--it is a 
consumer issue. According to a recent poll, 76 percent of Americans 
believe that individuals should not be allowed to erase all their debts 
in bankruptcy if they are able to repay a portion of what they owe. 
This survey merely reflects the American public's belief that 
individuals should be responsible for their own actions. S. 625 helps 
remedy the glaring problems of today's bankruptcy system be creating a 
needs-based system to determine the chapter under which a person should 
file for bankruptcy.
  Mr. President, the House bankruptcy reform bill passed by an 
overwhelming margin of 313 to 108. Half of the House Democratic Caucus 
joined with every House Republican to support a bill with more 
stringent measures than those we are considering in the Senate.
  S. 625 contains new measures to protect against fraud in bankruptcy, 
such as a requirement that debtors supply income tax return sand pay 
stubs, audits of bankruptcy cases, and limits on repeat bankruptcy 
filings. It eliminates a number of loopholes, such as the one that 
allows debtors to transfer their interest in real property soothers who 
then file for bankruptcy relief and invoke the automatic stay. And, it 
puts some controls on the ability of debtors get large case advances on 
their credit cards and to pay luxury goods on the eve of filing for 
bankruptcy.
  At the same time, s. 625 provides many unprecedented new consumer 
protections. It imposes penalties upon creditors who refuse to 
negotiate in good faith with debtors prior to declaring bankruptcy. 
Also, it imposes penalties on creditors who wilfullly fail to properly 
credit payments made by the debtor in a chapter 13 plan, and for 
creditors who threaten to file motions in order to coerce a 
reaffirmation without justification. Moreover, the bill imposes new 
measures to discourage abusive reaffirmation practices.
  It also addresses the problem of bankruptcy mills, firms that 
aggressively promote bankruptcy as a financial planning tool, and often 
end up hurting unwitting debtors by putting them in bankruptcy when it 
may not be in their best interest. The legislation also imposes 
penalties on bankruptcy petition preparers who mislead debtors.
  Importantly, S. 625 makes major strides in trying to break the cycle 
of indebtedness. It educates debtors with regard to the alternatives 
available to them, sets up a financial management education pilot 
program for debtors, and requires credit counseling for debtors.
  I am particularly proud that the bill makes extensive reform of the 
bankruptcy laws in order to protect our children. I have authored 
provisions to ensure that bankruptcy cannot be used by deadbeat dads to 
avoid paying child support and alimony. Under my provisions, the 
obligation to pay child support and alimony is moved to a first 
priority status, as opposed to its current place at seventh in line 
behind attorneys fees and other special interests. My measures also 
ensure the collection of child support and alimony payments by, among 
other things, exempting state child support collection authorities from 
the ``automatic stay'' that otherwise prevents collection of debts 
after a debtor files for bankruptcy, and by exempting from discharge 
virtually all obligations one ex-spouse owes another.
  S. 625 also includes a provision to create new legal protections for 
a large class of retirement savings in bankruptcy. This measure has 
widespread support from a long list of groups, ranging from the 
American Association of Retired Persons, to the Small Business Council 
of America and the National Council on Teacher Retirement.
  Let me take this opportunity also to point out that the assets of 
some pension plans already are protected from bankruptcy proceedings. 
The United States Supreme Court has ruled in Patterson v. Shumate, 
reported at 504 U.S. 753 (1992), that assets of pension plans which 
have, and are required by law to have, anti-alienation provisions, are 
excluded from bankruptcy estates. Let me be clear that my amendment is 
intended to expand the protection of retirement savings to protect 
assets that were not previously protected. My amendment is not intended 
in any way to diminish the protections offered under existing law and 
under the United States Supreme Court's decision in Patterson v. 
Shumate, but, rather, is intended to provide protection to other 
retirement plans and accounts not currently protected.
  I am proud to propose several enhancements to the bill that primarily 
are designed to protect consumers and further provide incentives for 
consumers to take personal responsibility in dealing with debt 
management.
  In the area of domestic support, as I indicated earlier, Senator 
Torricelli and I intend to build upon the new legal protections we have 
created, as part of the underlying bill, for ex-spouses and children 
who are owed child support and alimony. The changes will further 
strengthen the ability of ex-spouses and children to collect the 
payments they are owed, and will make changes to a number of existing 
provisions in the bill to clarify that they will not directly or 
indirectly undermine the collection of child support or alimony 
payments.
  I must highlight just a few of these important enhancements: our 
amendment prevents bankruptcy from holding up child custody and 
domestic violence cases. It facilitates wage withholding to collect 
child support from deadbeat parents. In addition, our amendment helps 
avoid administrative roadblocks to get kids the support they need. It 
makes staying current on child support a condition of discharge in 
bankruptcy. Also, our amendment makes the payment of child support 
arrears a condition of plan confirmation. Finally, it allows for the 
payment of child support with interest by those with means.
  In the area of debtor education, I have developed an amendment that 
will protect from creditors contributions made to education IRAs and 
qualified state tuition savings programs for educational expenses. This 
is a significant protection for those who honestly put money away for 
the benefit of their children and grandchildren's future schooling. The 
potential that education savings accounts will be abused in bankruptcy 
is addressed by the amendment's requirement that only contributions 
made more than a year prior to bankruptcy are protected. I believe that 
protecting educational savings accounts is particularly important 
because college savings accounts encourage families to save for 
college, thereby increasing access to higher education. Nationwide, 
there are more than a million educational savings accounts, meaning 
there are more than a million children who could potentially benefit 
from this amendment. As much as I believe that bankruptcy laws need to 
be reformed to prevent abuse and to ensure debtors take personal 
responsibility, the ability to use dedicated funds to pay the 
educational costs of children should not be jeopardized by the 
bankruptcy of their parents or grandparents.
  I developed a debt counseling incentive provision, which builds on 
the credit counseling provisions currently in S. 625. It removes any 
disincentive for debtors to use credit counseling services by 
prohibiting credit counseling services from reporting to credit 
reporting agencies that an individual has received debt management or 
credit counseling, and establishes a penalty for credit counseling 
services that do. Debt management education is vital to reducing the 
number of Americans who, because of poor financial planning skills, are 
forced to declare bankruptcy. Providing credit counseling--

[[Page 28415]]

instruction regarding personal financial management--to current and 
potential bankruptcy filers will help curb bankruptcy filings.
  In addition, I intend to offer an amendment that is designed to curb 
fraud in bankruptcy filings. This amendment puts in place new 
procedures and provides new resources to enhance of bankruptcy fraud 
laws. It will require (1) that bankruptcy courts develop procedures for 
referring suspected fraud to the FBI and the U.S. Attorney's Office for 
investigation and prosecution and (2) that the Attorney General 
designate one Assistant U.S. Attorney and one FBI agent in each 
judicial district as having primary responsibility for investigating 
and prosecuting fraud in bankruptcy.
  I also plan to offer an amendment that allows the victim of a crime 
of violence or drug trafficking offense to move the bankruptcy court to 
dismiss a voluntary petition filed by a debtor who was convicted of the 
crime of violence or drug trafficking offense. To protect women and 
children who may be owed payments by such a debtor, however, the 
amendment still allows the bankruptcy petition to continue if the 
debtor can show that the filing of the petition is necessary to ensure 
his ability to meet domestic support obligations. Bankruptcy is not an 
entitlement--it is a process by which certain qualifying individuals 
with substantial debts may cancel their debts and obtain a ``fresh 
start.'' Under this amendment, violent criminals and drug traffickers--
individuals who have chosen to engage in serious, criminal conduct--
would be precluded from availing themselves of the benefits of 
bankruptcy protection.
  Mr. President, if we do not take the opportunity to reform our 
bankruptcy system, every family in my own State of Utah and throughout 
the Country, many of whom struggle to make ends meet, will continue to 
bear the financial burden of those who take advantage of the system. 
Last year alone, approximately $45 billion in consumer debt was erased 
in personal bankruptcies. Losses of this magnitude are passed on the 
American families at an estimated cost--if we use low estimates--of 
$400 for every household in American every year.
  Rampant banckruptcy filings are a big problem. In 1998, 1.4 million 
Americans filed for bankruptcy. That was more Americans than graduated 
from college. That was also more Americans than were on active military 
duty.
  Not long ago, I received a letter from a long list of organizations, 
ranging from the U.S. Chamber of Commerce to the National Ski and 
Snowboard Retailers Association, the American Sheep Industry 
Association, the National Cattlemen's Beef Association and the National 
Multi-Housing Council. In the letter, they drove home the importance of 
this legislation to small businesses. I would like to read a quote from 
that letter:

       Delay of this will . . . hurt America's small businesses--
     the heart and soul of this nation. These hard-working 
     entrepreneurs, trying to live out their American dream, can 
     be financially devastated by one ``bankruptcy of 
     convenience''. Additionally, frivolous bankruptcy filings 
     force businesses to charge more for goods and services. This 
     is why small business owners throughout the country are 
     calling on Congress to repair our fundamentally flawed 
     bankruptcy system--they've waited long enough.

  In closing, let me say I hope we can move through this bill in a 
timely and orderly fashion. I hope Members who intend to offer 
amendments do so sooner rather than later, so we may consider as many 
amendments as we can and hopefully finish consideration of this bill by 
early next week. I look forward to doing what I can to help Senators 
Grassley and Torricelli move this process along.
  I do not think this is going to be difficult given the many 
compromises already reached in this legislation. This bill is fair, 
balanced, and long overdue.


                         Privilege Of The Floor

  Mr. HATCH. Mr. President, I ask unanimous consent during 
consideration of S. 625, the following staffers be extended the 
privilege of the floor: Rene Augustine, Makan Delrahim, Kolan Davis, 
John McMickle, Kyle Sampson, and Leah Belaire.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Mr. President, I again commend Senators Grassley and 
Torricelli for the great work they have done and all members on the 
Senate Judiciary Committee for having worked so hard to get this bill 
ready for presentation today. I hope we can pass it quickly. With that, 
I end my remarks and turn the time over to Senator Sessions.
  The PRESIDING OFFICER (Mr. Grassley). The Senator from Alabama is 
recognized.
  Mr. SESSIONS. Mr. President, I thank Senator Hatch, who made very 
impressive remarks on this subject, for his leadership as chairman of 
the Judiciary Committee. I particularly wish to express my appreciation 
to the Presiding Officer who has led this effort since I have been in 
the Senate to reform our bankruptcy court system. Make no mistake about 
it, we are talking about a Federal court system that provides the 
ability for individual Americans, who legitimately owe debts to people 
not to pay their debts and to wipe those debts out.
  This is a historic American principle. We have had bankruptcy courts. 
They are referred to in the Constitution of the United States. They are 
uniquely and totally a Federal court procedure.
  I think it is appropriate for us to make timely changes as the nature 
of our times in court change. We review what is happening and make sure 
our law is effective to accomplish the best and highest ideals of the 
American people.
  We last passed historic bankruptcy reform in 1978. We have not since 
that time confronted the issue squarely and fundamentally and 
comprehensively to see what is happening and see what we can do about 
it. Any Federal court system must be fair, it must be coherent and 
logical, it must be commonsensical, and it must help us further our 
economic growth and vitality as a nation.
  At the same time, any legal system we establish, as the Chair so 
eloquently said, has a moral component. We need to make sure as a 
nation that our bankruptcy laws encourage the highest and best ideals 
of the American people. In fact, all laws should do that; particularly, 
I suggest, bankruptcy laws. We believe, as Americans, that people who 
get hopelessly in debt ought to be able to start over and not have 
their lives forever burdened by debts they could never repay. That is 
the historic principle. We should not retreat from that, and certainly 
this bill reflects no retreat from that.
  But it is never a good thing to go into bankruptcy. It is an 
unfortunate event, when people reach a point in their lives when they 
are unable to pay a just debt they incurred because they got some 
benefit from that debt. They borrowed money to buy a TV set; they 
borrowed money to buy a car; they borrowed money to take a trip. 
Somebody loaned them that money. The purpose of that loan was to have 
it repaid, and most people believe they ought to repay that debt. If 
ever in this country we believe that we do not have to pay debts, 
because it is inconvenient or difficult, we have a real problem because 
the ability of honest and hard-working people to obtain loans is going 
to be much more difficult.
  An individual citizen should pay his or her debt. It is possible--and 
we made great progress, Mr. President, under your leadership--to create 
a system that does allow people to start over. But at the same time, it 
does not reward those who lightly walk away from debts they have every 
ability to repay either in whole or in part. Fundamentally, the way 
this system works is very unusual, in many respects. If a person makes 
a salary of $80,000 and if that person has a debt of $50,000 and that 
is the only debt they have, it may strike you they could easily pay it 
off in 2 or 3 years without a great deal of strain, perhaps. It may 
strike Americans as strange to realize, regardless of their ability to 
pay it off in relatively short order, they could walk into bankruptcy 
court, file under chapter 7, and wipe out that debt and not ever have 
to pay it. Some people do that and abuse the system.
  I heard recently of an individual who made $35,000 a year, had a 
$1,500 debt,

[[Page 28416]]

and filed for bankruptcy because he did not want to pay that debt. That 
kind of thing happens in our court. That is an extreme example, but 
there are less extreme examples of it on a routine basis. If a person 
is able to pay back a part of their debt, why should they not?
  You say, well, it was for a hospital. Why should the hospital not get 
paid if he can pay some of his legitimate hospital bills? Why would we 
not want them to do that? Why should we say to an honest person who 
struggles to pay the hospital bill: You are just a chump; you are the 
clever guy, you went and got a lawyer, paid him $1,000, and he is going 
to wipe out your $3,000 debt to the hospital. If a person cannot pay 
their hospital bill, if they cannot pay their other bills, if their 
income will not support it, then bankruptcy is for them. But there are 
abuses, I assure you, and they are quite common--too common, I suggest.
  There is a strange tendency in the filings, whether you file under 
chapter 13 or chapter 7--as you know, when you file in chapter 7, you 
simply offer up your assets, wipe out all your debts and walk away, 
never to have to pay any of those debts again. If you file under 
chapter 13, the court will work with you and your attorney and develop 
a repayment plan for all or a portion of that debt. They will stay the 
interest that is accruing on the debts. They will say how much ought to 
be paid to each creditor. They will keep those creditors from suing or 
filing any harassment action against the person paying them off until 
the debts are paid.
  In my home State of Alabama, in Birmingham, which is where chapter 13 
payments began quite a number of years ago, over half, maybe more than 
60 percent of the individual citizens, for some reason--for various 
reasons--have chosen to file under chapter 13 and pay back all or a 
portion of their debts. But in some of the larger urban areas of this 
country, that figure is even under 10 percent. Routinely, the lawyers 
come in and advise their clients to file under chapter 7. They file 
under chapter 7 and wipe out all their debts when many of those could 
easily pay them back.
  There are some good reasons why people would want to file under 
chapter 13 and pay back a lot of the debts they owe. They will be able 
to have more self respect as individuals if they pay off their debts. 
It stops the creditors from suing them, the phone calls, and the 
harassment that might come when you owe many different debts. You have 
a better credit rating when you have paid off your debts, and you are 
able to keep certain items you might not be able to keep otherwise. 
There are other advantages to filing chapter 13.
  If a court were to decide, as they could under our new law, that you 
have the ability to pay back and you are shifted to chapter 13, it is 
not all bad. There are many reasons why a careful lawyer representing a 
client would suggest chapter 13 is a good way to go.
  So we have a system today that is very enticing to the irresponsible. 
We have a system today that is driven by a lot of different factors. 
One factor is the advertisements we see on television describing how to 
avoid your debts.
  People see those advertisements and then go to the attorneys who 
specialize in bankruptcy. The attorneys tell them: You have these 
debts, and the easy thing to do is file chapter 7; I will file your 
bankruptcy for $700, $1,000, and you will not have to pay any more 
debts. You have to put everything you have on your credit card for the 
next 3 months. Do not pay any bills; do not pay any of your payments on 
any of your notes; take that money and give it to me; set aside the 
rest of it; we will file bankruptcy and just wipe it all out.
  That is what is happening in America today. People are induced to do 
that.
  I thought about it: Do they know? People get depressed and get 
panicky. They do not know what to do. People are suing them and 
threatening them. They go to their lawyer and ask for advice. I am of 
the opinion that at least a significant minority of those individuals 
want to pay their debts, but for various reasons they are in trouble 
and unable.
  I visited in my hometown of Mobile an outstanding institution, a 
nonprofit credit counseling agency. That agency meets with families who 
are in financial trouble. The people at this agency sit down with these 
families and help them work out a budget. It helps the family members 
understand the consequences of spending. It helps them to set 
priorities on which debt to pay first. It helps them to set up a 
savings plan. Sometimes they will even receive the check and pay 
certain debts that are required and give the family a certain amount of 
cash to use for their weekly or monthly bills.
  Normally, they call the credit card companies, the banks, and other 
people who have claims against the family and negotiate a lower 
interest rate. They are able to do that. Companies will do it. And the 
families can pay off those debts in that fashion. It is highly 
successful.
  One of the main reasons for divorce in America today is financial 
difficulty. That is a known fact. As a matter of fact, it is the main 
reason. These nonprofit agencies encourage people to undergo marital 
counseling. A lot of people are in financial trouble because of 
alcoholism. Credit counseling or nonprofit agencies care about the 
people who come before them and help them get alcoholism treatment or 
help them get into AA.
  Many gamblers are in financial trouble. One member of the family 
gambles and has lost the money. This is a known fact. They get people 
into Gamblers Anonymous and help save their family.
  Maybe they need mental health treatment. They can oftentimes get them 
into those treatment facilities. That kind of thing is healthy.
  One of the things I suggested, something with which the chairman, 
Senator Grassley, and others on the committee agreed, is before you 
file for bankruptcy, you have to contact a credit counseling agency and 
discuss with them the possibility of choosing an alternative to filing 
for bankruptcy. The truth is, most people want to pay their debts. They 
just do not know how to do it in a way that will be OK in light of the 
creditors pressing on them.
  We believe that can be a significant step forward in helping people 
in debt. They can be counseled by experts in money management on how to 
handle their money and get out of debt on their own, how to maintain 
their self-respect and pride, and to actually pay off the debts.
  If you get a loan from your brother-in-law or if you borrow money 
from the bank, you ought to pay it back if you can. This bill 
encourages that.
  There are people with high incomes who are filing for bankruptcy 
today. We have heard the stories of young lawyers and young 
professionals who get a new car, have student loans and $5,000 or 
$6,000 in credit card bills, and the creditors are calling. They do not 
really want to slow down. They can just file for bankruptcy and wipe 
out these debts. That is not right. We will be focusing on that.
  It will not burden poor people. Credit counselors will have to be 
approved by the bankruptcy court. They will be nonprofit individuals 
who will be audited on a regular basis. These are the steps I believe 
will encourge people to avoid filing bankruptcy.
  This bill will be a major step forward for families who are entitled 
to child support and alimony. They will be moved to the top of the 
priority list. It will be a great step forward for them. Child support 
and alimony will be improved.
  A bankruptcy system for farmers that is adjusted to their unique 
problems will be enhanced and made permanent by this legislation. 
Senator Grassley has been a champion of those issues for many years, 
and he has achieved that again in this bill. We will make it permanent 
with this bill.
  I respect the work the Senator from Iowa is doing. This is a good 
piece of legislation. It calls on individuals to pay what they can. It 
allows judges to consider the circumstances involved before an order is 
given. It will improve the respect businesses and Americans have for 
bankruptcy if they know it is not being abused as it is today. We can 
stop it, and we can do better. This bill will do that.

[[Page 28417]]

  There are loopholes that good lawyers have learned to exploit. I do 
not blame the lawyers for it. If we have it in the law of Congress that 
says this is appropriate, they are going to use it to the benefit of 
their clients.
  We had a circumstance in which a tenant's 1-year lease had expired. 
He had not paid his debts. The landlord wanted to evict him. He filed 
for bankruptcy. People are filing all over America and getting a stay 
of legal action, causing the landlord to hire a lawyer and wait several 
more months before he can get the person removed from the premises. 
Maybe he never intended to lease it for more than 1 year anyway. Maybe 
he had another tenant to take the place after 12 months. That person, 
through abuse of the bankruptcy system, could do that. That is very 
common in America.
  Many of these problems are being addressed. I know the chairman 
believes strongly that creditors ought not have lawyers go down to 
court all the time. The bill allows you to represent yourself, if you 
choose, in bankruptcy court under many circumstances.
  This legislation will improve the system of law in Federal courts. It 
will have a more just result. It will stop individuals who are able to 
pay back all or a portion of their debts from walking into court and 
wiping out their debts. This bill will stop that.
  For people in serious debt who fall below the median income of 
America, they will be able to choose chapter 7 or 13. But for those 
with higher incomes, if they have the ability to pay the debts, we 
think this bill will make them do so, or at least a portion of what 
they owe, if the judge so orders. It is a step in the right direction.
  I am proud to serve on the subcommittee which Senator Grassley 
chairs. This bill is a step forward for our courts. I hope as we move 
forward we will have the support we had previously. It passed in this 
body last year with 94 out of 100 votes. It is essentially the same 
bill. It passed in our committee by a vote of 14-4. It passed the House 
with 303 votes to 100. It is a popular bill. It has broad bipartisan 
support. It has dragged on for far too long. It is time for us to see 
it to conclusion.
  I thank the chairman for his leadership, determination, and 
persistence in driving this bill to a successful conclusion.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Sessions). Without objection, it is so 
ordered.

                          ____________________