[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[House]
[Pages 2545-2632]
[From the U.S. Government Publishing Office, www.gpo.gov]



    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2001

  The SPEAKER pro tempore (Mr. Walden of Oregon). Pursuant to House 
Resolution 71 and rule XVIII, the Chair declares the House in the 
Committee of the Whole House on the State of the Union for the 
consideration of the bill, H.R. 333.

                              {time}  1125


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 333) to amend title 11, United States Code, and for other 
purposes, with Mr. Quinn in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Wisconsin (Mr. Sensenbrenner) and 
the gentleman from Michigan (Mr. Conyers) each will control 30 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 6 minutes.
  Mr. Chairman, I rise in support of H.R. 333, the Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2001.
  Mr. Chairman, this bill is a bipartisan, balanced, and comprehensive 
package of reform measures pertaining to both consumer and business 
bankruptcy cases. The purpose of the bill is to improve bankruptcy law 
and practice by restoring personal responsibility and integrity in the 
bankruptcy system, and to ensure that the system is fair to both 
debtors and creditors.
  With respect to its consumer provisions, H.R. 333 responds to several 
significant developments. One of these developments was the dramatic 
increase in consumer bankruptcy filings during the 1990s and the losses 
associated with those filings. Based on data released by the 
Administrative Office of the United States Courts, bankruptcy filings 
increased by more than 72 percent between 1994 and 1998. Mr. Chairman, 
for the first time in our Nation's history, bankruptcy filings exceeded 
1 million in 1996. In calendar year 1997 alone, bankruptcy filings 
increased by more than 19 percent over the prior year. By 1998, the 
number of bankruptcy filings, according to the AO, reached an all-time 
high of more than 1.4 million cases. Although the most recent reporting 
periods indicate the filings have somewhat decreased, the 
Administrative Office states they remain well above the 1 million mark. 
Paradoxically, this dramatic increase in bankruptcy filing rates has 
occurred during a period when the economy was generally robust, with 
relatively low unemployment and high consumer confidence.
  Coupled with this development was the release of a study estimating 
that financial losses attributable to bankruptcy filings in 1997 
exceeded $44 billion. The committee received testimony in the last 
Congress stating that this figure, when amortized on a daily basis, 
amounts to a loss of at least $110 million a day.
  Please note, those of us who pay our bills as we have agreed end up 
having to absorb these losses through higher costs and bank fees and 
interest rates.
  Various other studies which thereafter became available concluded 
that some bankruptcy debtors can in fact repay a significant portion of 
their debts.
  The heart of H.R. 333's consumer bankruptcy provisions is the 
implementation of an income-expense screening mechanism, usually 
referred to as a means-based or means test reform.

                              {time}  1130

  These provisions are designed to ensure that debtors repay creditors 
the maximum they can afford.
  In addition, the bill institutes significant consumer protection 
reforms, including mandatory credit counseling requirements and 
specific disclosures in connection with certain credit transactions.
  The reforms are aimed to help debtors understand their rights and 
obligations with respect to reaffirmation agreements are also included 
in the legislation.
  In addition, the legislation substantially expands the debtor's 
ability to exempt certain tax-qualified retirement accounts and 
pensions. It also creates a new provision that allows a consumer debtor 
to exempt certain education IRA and State tuition plans for his or her 
child's postsecondary education from the claims of creditors.

[[Page 2546]]

  Most importantly, H.R. 333 requires debtors to participate in credit 
counseling programs before they file for bankruptcy relief, unless 
special circumstances do not permit such participation. The 
legislation's credit counseling provisions are intended to educate 
consumers about the consequences of bankruptcy, such as the potentially 
devastating effect it could have on their credit rating, and to provide 
them with guidance about how to manage their finances so that they can 
avoid future financial difficulties.
  Mr. Chairman, the bill also makes extensive reforms pertinent to 
business bankruptcies. Many of these provisions are intended to 
heighten administrative scrutiny and judicial oversight of small 
business bankruptcy cases. In addition, the bill includes provisions 
designed to reduce systemic risk in the financial marketplace and to 
clarify the treatment of tax claims in bankruptcy cases. H.R. 333 also 
creates a new form of bankruptcy relief for transnational insolvencies 
and includes provisions regarding family farmer debtors and health care 
providers.
  It should be noted that this bill is a product of more than 3 years 
of congressional consideration of bankruptcy reform legislation. As 
reported, H.R. 333 is virtually identical to the conference report on 
H.R. 2415, the Gekas-Grassley Bankruptcy Reform Act of 2000, which 
passed the House by a voice vote last October 12 and passed the other 
body on December 7 by a vote of 70 to 28. But for former President 
Clinton's December 19 pocket veto, this legislation would have been 
become law.
  It should also be noted that support for bankruptcy reform 
legislation in the last two Congresses has been overwhelming and 
bipartisan. In the 105th Congress, for example, the House passed both 
H.R. 3150, the Bankruptcy Reform Act of 1998, and the conference report 
on that bill by veto proof margins. In the last Congress, the House 
passed H.R. 833, which is the successor to H.R. 2415, by a veto-proof 
margin of 313-108.
  This bill is the product of extensive negotiation and compromise, as 
well as an exhaustive and amendatory process. In the last Congress 
alone, the House and Senate engaged in nearly 7 months of negotiations 
to reconcile the differences between their respective bills. The 
product of these exhaustive efforts was the conference report on H.R. 
2415, which is virtually identical to this bill.
  Mr. Chairman, this is a balanced, bipartisan and comprehensive reform 
measure, which will prevent the costly exploitation of our bankruptcy 
system, while protecting those debtors truly in need of bankruptcy 
protection.
  Mr. Chairman, I urge my colleagues to support this important 
legislation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, at a time when our electoral system is in tatters, 
voter reform ignored, our campaign finance laws riddled with loopholes, 
our seniors in desperate need of prescription drug coverage, our 
minimum wage laws unadjusted for 6 years, the first major bill the 
Republican majority brings to this floor is bankruptcy. Not just any 
bankruptcy bill, a bill that massively tilts the playing field in favor 
of creditors and against the interests of ordinary consumers and 
workers. A bill opposed by every consumer group, by the bankruptcy 
judges and trustees themselves, by organized labor, by every major 
group concerned about seniors, women, children, victims of crime, this 
is the first bill we bring to the floor in the 107th Congress.
  To all of my friends on both sides of the aisle who tell me that this 
bill is balanced and fair, I have one response, read the bill and 
understand it.
  To those who argue the bill only punishes wealthy debtors or 
fraudulent debtors, check out how the bill give creditors massive new 
rights to bring threatening court motions against low-income debtors. 
Read how the bill permits credit card companies to reclaim common 
household goods which are of little value to them, but of every value 
to the debtor's family. Read how the bill makes it more difficult for 
people below the poverty line to keep their house or their car in 
bankruptcy.
  To those who allege the bill protects alimony and child support, I 
would ask them if they know that the bill creates major new categories 
of nondischargeable debt that compete directly against the collection 
of child support and alimony payments, Mr. Chairman; whether they are 
aware that the bill allows landlords to evict battered women without 
bankruptcy child support approval, even if the eviction poses a threat 
to the women's physical well-being; whether they are aware that the 
bill forces women and children involved in bankruptcy to file personal 
information with the court, which is then placed on-line where the 
whole world has direct access to it.
  To my modest efforts to correct the bill and the problems, we were 
ruled out of order. It was considered to be unworthy of debate in the 
House.
  To those who assert the bill cracks down on credit card abuse, I 
would ask them to look at the meaningless boilerplate requirements 
included in the bill to realize that the bill does absolutely nothing 
to discourage abusive underaged lending, nothing to discourage reckless 
lending to the developmentally disabled, yes, and nothing to regulate 
the practice of so-called subprime lending to persons with no means or 
little ability to repay their debts.
  Then some suggest the bill fixes the problem of homestead exemption 
abuse, I would suggest that rather than repeal or even cap the 
homestead exemption, the bill places only weak obstacles in its place. 
The bill does nothing to prevent the very worst abuses in the 
Bankruptcy Code, such as when financiers and criminals void tens of 
millions of dollars in debt, while they live high on the hog in their 
multimillion dollar mansions. They can still do it under this bill. 
Again, the majority would not even allow us an amendment to try to 
eliminate the abuse.
  To those who believe this bill streamlines and expedites business 
bankruptcies, look at title 4, which adds numerous new paperwork 
burdens, imposes arbitrary deadlines, and makes it far more likely that 
struggling businesses, especially small ones, will be forced to 
liquidate and terminate workers.
  And so it is amazing that Congress is taking these actions at a time 
when we are in the middle of an economic slowdown. It is like pouring 
gasoline on a fire of economic uncertainty.
  I am ashamed of this legislation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentleman 
from Texas (Mr. Armey), the distinguished majority leader.
  Mr. ARMEY. Mr. Chairman, let me open my remarks by thanking the 
Committee on the Judiciary for bringing this bill to the floor early.
  I must say, Mr. Chairman, from me personally, I take it as a matter 
of enormous pride that this is the first significant bill we bring to 
the floor in this Congress. This Congress represents a new beginning, I 
hope, for the government of the United States.
  Mr. Chairman, I believe that the law of this land should always be a 
complement to and encouragement for those lessons in life that we as 
parents invest most heartfelt in the instruction of our children.
  Every mom and dad in America today that has that precious baby as 
their charge, realizing the responsibility that I am this child's first 
and most important teacher, tries to teach the child those lessons of 
life that will endure and, if observed and followed, will make it 
possible for that child to be happy and successful in their own life 
and a blessing in the lives of the others. That is all we want for our 
children.
  This is a wonderful ability, the ability of adults to hold their head 
high and know their duty and do their duty.
  One of the things that we have already worked so hard with our 
children is to be so, so careful how we accept obligations in our lives 
and be judicious in that manner, but once we accept an obligation to 
understand the need as a matter of personal pride and honor to fulfill 
that obligation, the law of the land should complement that lesson on

[[Page 2547]]

behalf of every child in America and on behalf of every parent that 
passes that lesson down to yet another generation.
  Bankruptcy laws in America have not done that. Bankruptcy laws in 
America have put a lie to one of the most important lessons we teach 
our children. Bankruptcy laws in America have said to our children, you 
are a fool if you do not file. That is not right. Yes, this is a right 
step for us to take, a good step for us to take. It is not about the 
money. Anybody who thinks this bill is about who gets the money is 
missing the point, Mr. Chairman.
  This bill is about the character of a Nation and will the Nation's 
laws have a character of the Nation's people.
  Again, let me thank the gentleman from Wisconsin (Mr. Sensenbrenner) 
for bringing this opportunity for me as one Member to vote for the 
character of this great Nation, because, Mr. Chairman, we are a 
wonderful people. We deserve this bill.
  Mr. CONYERS. Mr. Chairman, I yield 4 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the distinguished 
gentleman from Missouri (Mr. Conyers), the ranking member, for yielding 
me the time, and I thank him for his leadership.
  Mr. Chairman, I thank the gentleman from Wisconsin (Mr. 
Sensenbrenner), the chairman of the Committee on the Judiciary, for the 
time we will have to work together.
  It is for that reason that I rise to the floor with a great deal of 
disappointment, disappointment because this would have been a very 
simple and gracious way to begin the collaborative uniting that has 
been so eloquently spoken to by many in this country; but, yet, we took 
the ice skating rinks of the Nation and we got on some ice-skates and 
we called it bankruptcy.
  Before we could even hear the state of the budget, almost before the 
inauguration, this bill was skidding to victory, a bill that brakes the 
backs of working women, disappoints children and discourages people who 
are truly trying to work and do the right thing from getting their life 
back in order.
  Let me simply suggest to you that this is what we are confronting. 
``Debt smothers young Americans,'' the USA Today article says. ``As a 
freshman at the University of Houston in 1995, Jennifer signed up for a 
credit card and got a free T-shirt. A year later, she had piled up 
about $20,000 in debt and 14 credit cards. Jennifer is not a deadbeat. 
She is a young woman in college, seeking an opportunity and responding 
to the abusive solicitation by our credit card companies.''
  One mode of collaboration could have been that in this bill we would 
have had responsible restrictions and requirements on our credit card 
companies to educate those who utilize credit. Yes, I think it is good 
that mom and dad can train a young child and get them to be responsible 
and pay their debts. It is great. How many of us have tried that?

                              {time}  1145

  Mr. Chairman, I have a young 21-year-old in college in America, and 
the T-shirts are just flowing there from credit card companies 
attempting to sign up students, and the T-shirts look pretty. They look 
like the one I am holding. Some are blue and pink, and they come in all 
colors.
  This is a bad bill because it has a means test that says we are going 
to be guided by the IRS standards. We are going to test you and give 
you a SAT and LSAT before you go into bankruptcy court. They say we 
know the difference when there is frivolous lawsuit. We know when 
deadbeats are trying to get out of paying their debts.
  What about Jennifer. Her parents may not have known she was signing 
up. What about women and children and dads who have custody of children 
and need alimony and need child support. This is a horrible bill.
  What this bill does is it presents a competition, a world boxing 
match between the credit card companies and those who are trying to get 
alimony and child support from the bankrupt debtor. It says you have 
got to get out and fight with a lawyer before you can get 
prioritization. It does not prioritize alimony and child support. It is 
a misrepresentation to that. This hurts women and children.
  Mr. Chairman, I include for the Record an article and a letter signed 
by the American Association of University Women, Children NOW, 
Children's Defense Fund, Center for Law and Social Policy, among 
others, that says we cannot survive. This is a bad bill. This is not a 
uniting bill. This is bad for America.
  The material referred to is as follows:

                    [From USA Today, Feb. 13, 2001]

                     Debt Smothers Young Americans

                          (By Christine Dugas)

       As a freshman at the University of Houston in 1995, 
     Jennifer Massey signed up for a credit card and got a free T-
     shirt. A year later, she had piled up about $20,000 in debt 
     on 14 credit cards.
       Paige Hall, 34, returned from her honeymoon in 1997 to find 
     herself laid off from her job at a mortgage company in 
     Atlanta. She was out of work for 4 months. She and her 
     husband, Kevin, soon were trying to figure out how to pay 
     $18,200 in bills from their wedding, honeymoon and 
     furnishings for their new home.
       By the time Mistie Medendorp was 29, she had $10,000 in 
     credit card debt and $12,000 in student loans.
       Like no other generation, today's 18- to 35-year-olds have 
     grown up with a culture of debt--a product of easy credit, a 
     booming economy and expensive lifestyles.
       They often live paycheck to paycheck and use credit cards 
     and loans to finance restaurant meals, high-tech toys and new 
     cars that they couldn't otherwise afford, according to market 
     researchers, debt counselors and consumer advocates.
       ``Lenders are much more willing to take a risk on people 
     under 25 than they were 15 years ago,'' says Nina Prikazsky, 
     a vice president at student loan corporation Nellie Mae. 
     ``They will give out credit cards based on a college 
     student's expected ability to repay the bills.''
       Young people are taking advantage of the offers. A study 
     out today from Nellie Mae shows that the average credit card 
     debt among undergraduate students increased by nearly $1,000 
     in the past two years. On average, they owed $2,748 last 
     year, up from $1,879 in 1998.
       At a time when they could be setting aside money for a down 
     payment on a home, many young people are mortgaging their 
     financial future. Instead of getting a head start on saving 
     for retirement, they are spending years digging themselves 
     out of debt.
       ``I knew for a while that I had a problem. I wouldn't say I 
     was living high on the hog, but when I wanted clothes, I'd 
     buy a new outfit,'' says Medendorp, an Atlanta resident. 
     ``I'd go out to eat and charge it on my cards. There were a 
     bunch of small expenses that added up and got out of 
     control.''
       Massey, Hall and Medendorp each ended up seeking help from 
     a local consumer credit counseling service. Hundreds of 
     thousands more young people like them are turning to credit 
     counseling or bankruptcy because they can no longer juggle 
     their bills.
       In 1999 alone, an estimated 461,000 Americans younger than 
     35 sought protection from their creditors in bankruptcy, up 
     from about 380,000 in 1991, according to Harvard Law School 
     professor Elizabeth Warren, principal researcher in a 
     national survey of debtors who filed for bankruptcy.
       At the Consumer Credit Counseling Service of Greater 
     Denver, more than half of all the clients are 18 to 35 years 
     old, says Darrin Sandoval, director of operations. On 
     average, they have 30% more debt than all other age groups, 
     he says.
       ``By the time they begin to settle into a suburban 
     lifestyle, they are barely able to meet their debt 
     obligations,'' Sandoval says. ``If there is a job loss, an 
     unexpected medical expense or the birth of a child, they 
     supplement their income with credit cards. Soon they are 
     being financially crushed.''


                               debt heads

       Unlike the baby boom generation--raised by Depression-era 
     parents--young Americans today are often unfazed by the 
     amount of debt they carry.
       ``This generation has lived through a time when everything 
     was on the upswing,'' says J. Walker Smith, president of 
     Yankelovich Partners, a market research firm. ``There is no 
     sense of worry about being over-leveraged. It all seems to 
     work out.''
       Kevin Jackson, a 32-year-old software engineer in Denver, 
     has about $8,000 in credit card debt and a $20,000 home-
     equity loan. He doesn't believe he has a debt problem, though 
     his goal is to reduce his credit card balance to $2,000.
       ``You learn to live with a certain amount of debt,'' he 
     says. ``It's a means to an end. There is something to be said 
     for paying for everything and something to be said for 
     enjoying life, as long as you do it responsibly.''
       Unfortunately, enjoying life can be expensive, especially 
     for many young Americans who feel it is essential to have the 
     latest high-tech products and services, such as a cellphone, 
     pager, voice mail, a computer

[[Page 2548]]

     with a second phone line or a DSL connection, an Internet 
     service provider and a Palm Pilot.
       Jackson just bought a DVD player and a big-screen TV. ``I 
     try to control costs,'' he says. ``I easily could have spent 
     $5,000 on the TV, but instead I paid $2,000 and I got a one-
     year, no-interest deal.''
       Movies, TV shows and advertising only reinforce the idea 
     that young people are entitled to have an affluent lifestyle. 
     ``We're encouraged to overspend,'' says Jason Anthony, 31, 
     co-author of Debt-free by 30, a book he wrote with a friend 
     after they found themselves drowning in debt.
       ``We all see shows like Melrose Place and Beverly Hills 
     90210. It creates tremendous pressure to keep up. I'm one of 
     the few persons who think a recession will be good for my 
     generation. Our expectations are so elevated. In the frenzy 
     to keep up, we've gotten into financial trouble,'' he says.


                         The perils of plastic

       Consumers like Massey, who get bogged down in credit card 
     debt before they even graduate from college, learn the hard 
     way about managing money. Now, 24 and married, Massey has a 
     good job in marketing. She has cut up her credit cards and is 
     gradually repaying her debt. However, there have been 
     consequences: She had to explain to her boss that because she 
     no longer has a credit card, she cannot travel for work if it 
     involves renting a car or booking a hotel reservation on her 
     own. She had to tell her husband about her debt problems 
     before they were married.
       ``I lack confidence now,'' Massey says. ``I'm hard on 
     myself because of my mistakes. But I blame the credit card 
     companies and the university for allowing them to promote the 
     cards on campus without educating students about credit.''
       The percentage of undergraduate college students with a 
     credit card jumped from 67% in 1998 to 78% last year, 
     according to the Nellie Mae study. And many of them are 
     filling their wallets with cards. Last year, 32% said they 
     had four or more cards, up from 27% two years earlier.
       Although graduate students have an even bigger appetite for 
     credit, they are starting to show signs of restraint. Their 
     average debt declined slightly from $4,925 in 1998 to $4,776 
     last year, Nellie Mae says.
       Many young people will be saddled with credit card debts 
     for years, experts say. Among all age groups, credit 
     cardholders younger than 35 are least likely to pay their 
     bills in full each month, according to Robert Manning, author 
     of Credit Card Nation.
       Though credit cards and uncontrolled spending are a 
     combustible combination, many young people are pushed to the 
     financial edge by the staggering cost of college. The average 
     annual tuition at a four-year private university jumped to 
     $16,332 last year from $7,207 in 1980, according to the 
     College Board. Between 1991 and 2000, the average student 
     loan burden among households under 35 increased nearly 142% 
     to $15,700, according to an exclusive analysis of the 
     finances of 18- to 34-year-olds for USA TODAY by Claritas, a 
     market research firm based in San Diego.
       Those who choose to go on and get a graduate degree pay an 
     even higher price. Another Nellie Mae study found that those 
     who borrow for graduate work, and specifically those in 
     expensive professional programs in law and medicine, are 
     likely to have unusually high debt burdens that are not 
     always offset by comparably high salaries.
       Karen Mann didn't need a survey to come to that conclusion. 
     Her husband, Michael, is about to start his career as an 
     orthopedic surgeon after racking up $400,000 in loans during 
     four years of undergraduate school, four years of medical 
     school, one year in an MBA program and a 5-year residency 
     program.
       During his residency and a subsequent fellowship, payments 
     and some of the interest on his student loans have been 
     deferred. Soon they'll have to begin paying them off.
       The interest payment alone is $20,000 a year.
       The Manns are not extravagant. ``I've always saved, and I 
     have a budget,'' says Karen, 31. ``I'd love to buy a house, 
     but there's no way. We haven't been able to afford kids yet. 
     The loans are so awesome that you do get crazy.''


                    paying for everything with cash

       The Manns are not alone in having to defer important goals 
     because of heavy debt loads. Medendorp, a social worker in 
     Decatur, Ga., lives on a budget and is diligently paying her 
     bills with the help of a Consumer Credit Counseling Service 
     debt-management plan. She pays for everything with cash. 
     There are many things she'd like to do but can't afford, such 
     as having laser eye surgery, going back to school and buying 
     a home.
       ``When you get in a tar pit, forget about buying a home,'' 
     author Anthony says. ``Instead of saving for a down payment, 
     you're making credit card payments.''
       At a time when the overall U.S. homeownership rate has 
     risen to historic highs, young Americans are less likely than 
     people their age 10 years ago to buy a home. The 
     homeownership rate for heads of households younger than 35 
     has declined from 41.2% in 1982 to 39.7% in 1999, according 
     to the Census Bureau. And if they own a home, young people 
     tend to make smaller down payments or borrow against what 
     equity they have. As a result, the average amount of equity 
     accumulated by homeowners younger than 35 has shrunk to about 
     $49,200 in 1999, from $57,100 10 years earlier, according to 
     a study from the Consumer Federation of America.
       ``For middle-income Americans, the most important form of 
     private savings is home equity,'' says Stephen Brobeck, 
     executive director of the Consumer Federation of America. 
     ``It's essential to have paid off a mortgage by retirement so 
     that living expenses are lower and one has an asset that can 
     be borrowed on or sold if necessary.''
       By almost every measure, young people are falling behind. 
     Between 1995 and 1998, the median net worth of families rose 
     for all age groups except for the under 35 group. Their 
     median net worth declined from $12,700 to $9,000, according 
     to the Federal Reserve.
       That is not to say that young people today are slackers and 
     deadbeats, as they have sometimes been characterized. Many 
     work hard and often make good incomes. Although they may have 
     a lot of debt, they also are very focused on saving and 
     investing, especially through 401(k)-type retirement 
     accounts. Jackson, for example, contributes the maximum to 
     his 401(k) plan.
       ``They want to protect themselves against future 
     uncertainty,'' Smith says. ``They absolutely don't expect 
     that Social Security will be around for them.''
       But it's hard to save money if you are head over heels in 
     debt. Massey earns $32,000 a year. With her husband, their 
     annual income is more than $100,000. ``But we're still broke 
     trying to pay our bills,'' she says.
                                  ____

                                                February 26, 2001.
       Dear Representative: The undersigned organizations write to 
     urge you to stand with America's women, children, and working 
     families and oppose H.R. 333, the bankruptcy act of 2001.
       If it becomes law, this bill will inflict greater pain on 
     the hundreds of thousands of economically vulnerable women 
     and families who are affected by the bankruptcy system each 
     year. Over 150,000 women owed child support or alimony by men 
     who file for bankruptcy become bankruptcy creditors. An even 
     larger number of women owed child support or alimony--over 
     200,000--will be forced into bankruptcy themselves. Indeed, 
     women are the largest and fastest growing group in 
     bankruptcy.
       H.R. 333 puts both women and children owed support who are 
     bankruptcy creditors and those who must file for bankruptcy 
     at greater risk. By increasing the rights of many other 
     creditors, including credit card companies, finance 
     companies, auto lenders and others, the bill would set up a 
     competition for scarce resources between parents and children 
     owed child support and these commercial creditors both during 
     and after bankruptcy. And single parents facing financial 
     crises--often caused by divorce, nonpayment of support, loss 
     of a job, uninsured medical expenses, or domestic violence--
     would find it harder to regain their economic stability 
     through the bankruptcy process. The bill would make it harder 
     for these parents to meet the filing requirements; harder, if 
     they got there, to save their homes, cars, and essential 
     household items; and harder to meet their children's needs 
     after bankruptcy because many more debts would survive.
       Contrary to the claims of some, the domestic support 
     provisions included in the bill would not solve these 
     problems. The provisions only relate to the collection of 
     support during bankruptcy from a bankruptcy filer; they do 
     nothing to alleviate the additional hardships the bill would 
     create for the hundreds of thousands of women forced into 
     bankruptcy themselves. And even for women who are owed 
     support by men who file for bankruptcy, the domestic support 
     provisions fail to ensure that, in this intensified 
     competition for the debtor's limited resources before and 
     after bankruptcy, parents and children owed support will 
     prevail over the sophisticated collection departments of 
     these powerful interests.
       This bankruptcy bill takes a harsh approach toward working 
     families who fall on hard times. At the same time, it does 
     little to curb real abuses of the bankruptcy system, such as 
     concerted efforts by those convicted of violence, vandalism, 
     and harassment against reproductive health clinics to use the 
     bankruptcy system to avoid paying the judgments and penalties 
     resulting from their illegal acts.
       We urge you to vote against H.R. 333, and to insist on 
     bankruptcy reform that is truly fair and balanced.
           Very truly yours,
         American Association of University Women; Children NOW; 
           Children's Defense Fund; Center for Law and Social 
           Policy (CLASP); Feminist Majority Foundation; National 
           Association of Commissions for Women (NACW); National 
           Center for Youth Law; National Organization for Women; 
           National Partnership for Women & Families; National 
           Youth Law Center; National Women's Conference; National 
           Women's Law Center; NOW Legal Defense and Education 
           Fund; OWL; The Women Activist Fund, Inc.; Wider 
           Opportunities for Women; Women Employed; Women Work!; 
           Women's Law Center of Maryland, Inc.; YWCA of the 
           U.S.A.


[[Page 2549]]


  Mr. Chairman, the issue of bankruptcy reform has been a heated topic 
of debate in this body since the first session of the 105th Congress, 
when shortly before the National Bankruptcy Review Commission issued 
its report recommending changes to the current bankruptcy laws; 
legislation was introduced to dramatically change the way in which 
consumer bankruptcies are administered under the U.S. Code, 11 U.S.C. 
sec. 101 et seq. Both the House and Senate enacted different versions 
of the bill in the second session of the 105th Congress and a 
conference report was filed shortly after. The House agreed to the 
conference report version of the bill by a vote of 300 to 25 on October 
9, 1998, but this bill which then President Clinton threatened to veto, 
was not brought before the Senate for a vote prior to adjournment.
  This legislation was again reintroduced in the 106th Congress and was 
passed by voice vote in the House and passed in the Senate by a vote of 
70 to 28. Then President Clinton withheld his approval, Congress 
adjourned sine die, and the bill was ``pocket'' vetoed.
  Mr. Chairman, in yesterday's hearing, I questioned Philip J. Strauss 
who was representing the California District Attorney's Association and 
the California Family Support Council on the fact that H.R. 333 places 
economically vulnerable women and children who are forced into 
bankruptcy, and those who are owed support by men who file for 
bankruptcy at greater risk by increasing the rights of many creditors, 
including credit card companies, finance companies, auto lenders, and 
others over that of the women and children. Mr. Strauss, however, 
appeared shocked at these facts and affirmatively stated that women and 
children's child support payments for former spouses are protected 
because the States collect money from people who owe child support and 
make payments to mothers.
  Mr. Chairman, I was not able to finish my point yesterday, however, 
in the interest of justice for the thousands of women and children who 
will be held hostage by H.R. 333. However, I will correct this gross 
misrepresentation today. While it is true that States collect money 
from people who owe child support to make payments to mothers, H.R. 333 
would effectively bottle this money in the coffers of the State because 
it increases the rights of creditors over these vulnerable women and 
children, and sets up a competition for scarce resources between 
parents and children owed support and commercial creditors both during 
and after bankruptcy. Therefore, single parents facing financial crises 
often caused by divorce, nonpayment of support, loss of a job, 
uninsured medical expenses, or domestic violence would find it harder 
to regain their economic stability through the bankruptcy process.
  Mr. Chairman, this fact is not something new whose light has recently 
been cast over the dark future of bankruptcy reform that would follow 
H.R. 333. The fact that H.R. 333 would effectively place women and 
children in a gladiator's arena with creditors to do battle for child 
support money owed by former spouses who file bankruptcy has been 
articulated by national organizations such as the National Women's Law 
Center, the National Association of Consumer Bankruptcy Attorney's, the 
National Organization for Women, a coalition of bankruptcy professors 
and bankruptcy judges, and the National Association of Attorney's 
General's to name but a few. How anyone could argue against the drastic 
effects and hardships that the language in this bill will cause on the 
vulnerable women and children in this country is beyond me.
  I have consistently said that the greatest challenge before us in the 
bankruptcy reform efforts is solving the widely recognized inadequacies 
of the law in the area of consumer bankruptcy. As it has always been in 
the Congress, the key to this process, is, of course, successfully 
balancing the priorities of creditors, who desire a general reduction 
in the amount of debtor filing fraud, and debtors, who desire fair and 
simple access to bankruptcy protection when they need them. H.R. 333 
does not accomplish this goal.
  Once again, however, the bankruptcy reform bill has been introduced, 
now in the 107th Congress. As with the bills introduced in the 105th 
and 106th Congresses, I cannot in good faith support H.R. 333 
introduced in the 107th Congress, because it:
  Will weaken important credit card disclosure provisions that will 
help ensure consumers understand the debt they are incurring;
  Will eliminate protections for reasonable retirement pensions that 
reflect years of contributions by workers and their employers; and
  Will include an anticonsumer provision eliminating existing law 
protections against inappropriate collection practices when collecting 
from people who bounce checks.
  For H.R. 333 to accomplish its intended goals, I believe that it must 
include provisions that will:
  Ensure families who need chapter 7 relief are able to get it, 
including the preservation of appropriate judicial discretion;
  Ensure women and children seeking to collect child support from a 
debtor do not have to compete with other creditors;
  Contain adequate protection for families against abusive 
reaffirmation practices of creditors;
  Enhance, not detract from, the viability of Chapter 13 plans; and
  Require adequate and accurate disclosure of credit repayment terms.
  In addition, given the recent turn in the economy, resulting in major 
corporations laying off workers by the thousands, it is even more 
important for Congress to carefully consider the impact of H.R. 333.
  Mr. Chairman, I am for bankruptcy reform, but I believe that it must 
be equitable and fair to all interested parties. I am for bankruptcy 
reform that recognizes the financial interest at stake for the debtor, 
his or her family, and the creditors.
  As I have already mentioned, in assessing bankruptcy reform we must 
balance two key principles. First, debtors must not be allowed to use 
the law to avoid repaying loans when they can actually afford to do so; 
and second, debtors should not be forced into serious hardship. Efforts 
to implement these two ideas have been made for a long time. The 
statute of Anne, enacted in 1705, was the first such effort. It 
introduced the idea of the fresh start into our law and punished those 
who abused the bankruptcy with death by hanging. In the bill before us 
today, the sponsors sought to draw the line by separating those who are 
worthy of a fresh start from those who abuse the system, but it is this 
very goal that they have failed to accomplish.
  In reviewing H.R. 333, I was reminded of a hypothetical given by 
Douglas Baird, a law professor at the University of Chicago on H.R. 
333's predecessors in the 105th and 106th Congresses stating that those 
bankruptcy reform bills would fail to balance the two competing goals 
that are the base of bankruptcy reform. The same is the case with H.R. 
333 today.
  Professor Baird's hypothetical considers an elderly woman living in 
Florida who returned to the workforce several years after her husband 
became ill and died. She makes $30,000 annually as a secretary and she 
has not taken a vacation in several years. She rents a one-bedroom 
apartment and owes $60,000, much of which stems from medical bills for 
the care of her late husband. Most of the remaining debt consists of 
unpaid credit card bills, most of it spent on household goods and 
groceries. Interest runs at 15 percent. The widow is behind in her 
payments, collection agencies call at home and at work, and they are 
threatening to garnish her wages.
  The hypothetical then considers a 45-year-old businessman, also 
living in Florida. He works for a large corporation and makes $95,000 a 
year. He previously had his own business but it failed. Though single, 
he lives in a 5-bedroom house worth $500,000. He owes $60,000 in debt 
from his 10 credit cards, which he used to pay for vacations, clothes, 
and meals in restaurants. In addition, he is personally liable for 
$200,000 in debt from his failed business venture.
  The current bankruptcy law would allow both the elderly widow and the 
businessman to file chapter 7 bankruptcy petitions and receive a fresh 
start. However, under H.R. 333, only the businessman would be allowed a 
fresh start because the widow's use of chapter 7 would be presumed 
abusive. The widow might be eligible for relief under chapter 13 but 
only if she commits all of her income for the next 5 years to the 
repayment of her debts, apart from monthly living expenses.
  In contrast, under H.R. 333, the businessman will be eligible for 
chapter 7 relief, and be able to discharge all of his debt and keep his 
house.
  The reform laid out in H.R. 333, will also increase hardship on 
debtors because it toughens the rules for ordinary debtors, most of 
whom declare bankruptcy not out of irresponsibility but because of 
catastrophic medical bills, unemployment, or divorce.
  Mr. Chairman, women are the fastest growing and largest group filing 
bankruptcy today. In 1999, over half a million women filed for 
bankruptcy by themselves--more than men filing by themselves or married 
couples. Of this number, over 200,000 women who filed for bankruptcy, 
in 1999, tried to collect child support or alimony. The domestic 
support provisions of H.R. 333 does not solve the problems faced by 
women in bankruptcy and does nothing to address the additional problems 
it would cause to the hundreds of thousands of women forced into 
bankruptcy each year, including the single mothers forced into 
bankruptcy because they are unable to collect child support.

[[Page 2550]]

  Furthermore, the National Association of Attorneys General has 
already warned that increasing the claims of partially secured 
creditors as H.R. 333 would do would make it more difficult to collect 
child support because credit card companies would treat all debts as 
secured, resulting in credit card debt being elevated to the same or a 
higher level than domestic support claims, and thus, make it more 
difficult to ensure that debtors are able to satisfy their obligations 
to their spouses and children.
  H.R. 333 also creates a new priority for support debts owed to 
government units over that of a spouse, former spouse, or child, which 
must be paid in full in a chapter 13 plan. Mr. Speaker, this bill does 
not provide further protections to vulnerable women and children facing 
creditors, instead, the points I have outlined today show that H.R. 333 
gives priority in many cases to the creditors over the vulnerable women 
and children.
  H.R. 333 also fails in its attempt to encourage chapter 13 filings by 
debtors, resulting in many families who currently save their homes and 
cars through chapter 13 being no longer able to do so. Under current 
law, a chapter 13 case can be filed after a chapter 7 or 13 discharge, 
or after a dismissed case. This is important to families who might 
incur large medical expenses a few years after a prior discharge or 
whose chapter 13 plans fail for circumstances beyond their control.
  H.R. 333, however, prohibits a new chapter 7 case within 8 years, 
rather than the current 6 years, after a petition resulting in a prior 
chapter 7 discharge, and a new chapter 13 case within 5 years. 
Furthermore, it is unclear whether the 5 years runs from the prior 
petition or the discharge. If the 5 years begin to run from the prior 
petition, it would mean that a chapter 13 case could be prohibited for 
up to 10 years after a prior chapter 13 petition.
  H.R. 333 will also place many new obstacles in the path of bankruptcy 
debtors, which would decrease access to the system, especially for 
those with the least income, primarily by raising costs for filing 
motions, defending dischargeability litigation, obtaining stays in 
repeat filing, and other added administrative costs in the area of 
several hundred dollars which could be prohibitive for many families. 
This will greatly increase the already significant number of consumers 
who cannot afford attorney representation in bankruptcy and who would 
therefore have only the choices of filing pro se, going to an 
unqualified nonattorney petition preparer, or not filing at all.
  In addition, H.R. 333 not only restricts the circumstances that 
families can file for chapter 13, it also significantly reduces the 
scope of the chapter 13 discharge making many of the debts that are 
currently dischargeable, nondischargeable under the full compliance 
discharge. This would effectively hurt debtors who can presently pay 
all they can afford.
  Mr. Chairman, many of the provisions that are the base of H.R. 333 
were designed for the sole purpose of reducing bankruptcy debtor filing 
fraud. As I stated at the out-set of my statement, I applaud and 
support this goal. However, the facts at hand tell us decisively that 
this goal will not be achieved under H.R. 333 because it is not 
narrowly tailored and does not provide fair and equal treatment in 
cases like homestead exemption. Furthermore, the goal of curbing 
bankruptcy debtor filing fraud is in serious question due to the sharp 
decline in bankruptcy filings overall. Statistics provided by the VISA 
Bankruptcy Notification Service, which compiles weekly reports on 
bankruptcy filings show a continued sharp decline in the bankruptcy 
rate which dropped by more than 9 percent in 1999, continuing to 
decline at an 8 percent annual rate in the first 5 months of the year 
2000. Bankruptcies are now running at a lower level than in 1997, 1998, 
or 1999. The per capital growth rate in personal bankruptcies was up to 
25.2 percent in 1997, up by 3.1 percent in 1998, down by 7.9 percent in 
1999, and down by 7.7 percent in 2000. In addition, the growth rate in 
personal bankruptcies was up by 26.1 percent in 1997, up by 4.0 percent 
in 1998, down by 7.0 percent in 1999, and down by 6.8 percent in 2000. 
In addition to the VISA Bankruptcy Notification Services, these numbers 
are also consistent with those compiled by the Chicago Mercantile 
Exchange in connection with the Quarterly Bankruptcy Index contract. 
These numbers that show a continuing decline in bankruptcies supports 
the view that many of the provisions provided in H.R. 333 are 
unnecessary and counterproductive.
  Mr. Chairman, as elected officials for the American people we must 
protect America's families. Most individuals who file petitions in the 
bankruptcy courts are usually experiencing turbulent times. Financial 
hardship is a serious matter that deserves legislative reform that is 
the product of a deliberative process. This bill, is an extreme bill 
undertaken at the direction of special interest groups. We must protect 
working-class families. We must work to find a viable solution that 
deters abuse of the bankruptcy system while preserving the fresh start 
for discharged debtors. It is ironic that the consumer lending industry 
actively solicits unsuspecting consumers through the mail with terms of 
easy credit, buy-now, pay-later rhetoric. After addicting debtors to 
this ``financial crack'' lenders are advocating for reform. Of course 
debtors are responsible for financial obligations that they incur; 
however, lenders must assume responsibility for their actions in 
creating the precarious financial crisis we are discussing.
  In the 105th Congress, I served as a member of the Subcommittee on 
Commercial and Administrative Law and as a conferee on H.R. 3150, the 
precursor to the bill before us today. As a member of that subcommittee 
in the 105th Congress, I signed onto the dissenting views of the 
accompanied the report from the committee. The dissents' conclusion is 
appropriate in this context.
  For nearly 100 years, Congress has carefully considered the 
bankruptcy laws and legislated on a deliberate and bipartisan basis. In 
the past, Congress has elected also to carefully preserve an insolvency 
system, that provides for a fresh start for honest, hard-working 
debtors, protects ongoing businesses and jobs, and balances the rights 
of and between debtors and creditors.
  Because H.R. 333 departs from these historical principles, and 
tramples on the preservation of the American people, I oppose this 
legislation in the interest of all that is just and fair.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 4 minutes to the 
distinguished gentleman from Pennsylvania (Mr. Gekas), the principal 
author of the bill.
  Mr. GEKAS. Mr. Chairman, to the Members we state and restate the two 
principal themes that, from the very beginning of this crusade to bring 
about bankruptcy reform, have remained the truths of the entire debate.
  Number one, in bankruptcy those who become so overburdened by debt, 
so crushed by the overweaning forces of finances that they no longer 
can meet and handle, to those people we guarantee a fresh start. That 
is what bankruptcy is all about, to allow and to foster a fresh start 
once this circumstance occurs. That we have never at all wavered in 
bringing about even to this moment.
  The second truth is that in those circumstances where it is 
determined that a person filing for bankruptcy does indeed have the 
ability to repay some of the debt over a period of time, that 
individual should be compelled through a proper mechanism that we have 
in the bill to repay that portion of the debt. And so the purposes of 
bankruptcy envisioned by our forefathers have been met and yet we bring 
about some reform measures that guarantee or reguarantee the arena of 
personal responsibility on the part of the American citizen, the 
American worker and at the same time, to give relief where it is 
merited.
  Mr. Chairman, what is never stated by the opponents of this bill and 
by the people who would criticize what we have attempted to do here is 
that most of the provisions of this bill have come about through 
testimony offered by our fellow citizens from every corner of American 
life, including women and children to which reference has been made 
many, many times; by the credit unions; by the taxing authorities; and 
they bring out two other truths that are part of the debate in this 
venture of ours here today.
  One is this: Every time someone does file bankruptcy, it costs the 
consumer. All of the other consumers, the ones that the gentleman from 
Michigan says are opposed to this bill. Consumers are hurt by 
bankruptcy. Why? Because every time something like that occurs, the 
price of goods creeps up. Perhaps not envisioned immediately or seen, 
but they do creep up. So the consumer has to pay more at the 
supermarket because of bankruptcies.
  Secondly, interest rates, because of the cost of credit, the cost of 
lending money goes up every time somebody files for bankruptcy, hits 
the consumer who is interested in borrowing money for a refrigerator or 
an automobile.
  Third, I did not realize until we began investigating this whole area 
of concern, bankruptcy, even our taxes increase as a result of someone 
filing

[[Page 2551]]

bankruptcy. I did not realize that the taxing authorities, until we 
were able to craft this particular piece of legislation, sometimes did 
not even know that a person owing back taxes or eventual taxes to be 
paid did not even know that those moneys were due them. We learned from 
the City of New York and the State of New York and other taxing 
authorities, municipal and county and state organizations, that for the 
first time they have in our bill a methodology for being notified that 
someone is going bankrupt and have an even chance of retrieving some of 
the back taxes. Why is that important? Because the consumers, the 
taxpayers are hurt every single time a bankruptcy is filed. The 
consumers, the taxpayers of our country, citizens of personal 
responsibility are supporting this legislation.
  Mr. Chairman, I include for the Record a letter from the U.S. Chamber 
of Commerce.

                                     U.S. Chamber of Commerce,

                               Washington, DC., February 28, 2001.
     To Members of the U.S. House of Representatives:
       The U.S. Chamber of Commerce, the world's largest business 
     federation, with more than three million businesses and 
     organizations of every size, sector and region, strongly 
     urges you to vote for the Bankruptcy Reform Act of 2001.
       This balanced, bipartisan bill is identical to the bill 
     which last year passed the House by voice vote and was 
     overwhelmingly approved by the Senate by a 70-28 vote. An 
     earlier version passed the House by a strong 313-108 vote.
       There are two pillars upon which bankruptcy reform rests: 
     debtors must not have their access to bankruptcy protection 
     restricted, while those who can afford to pay a significant 
     portion of their debts must be required to do so.
       This balanced, bipartisan legislation will accomplish these 
     goals:
       Access to bankruptcy will unquestionably remain available 
     for all Americans, regardless of income.
       More than 100,000 bankruptcy filers are abusing the system 
     every year by discharging debts that they have the ability to 
     repay.
       Abusers of the bankruptcy system, those who earn more than 
     the median income and can afford to repay a signficiant 
     portion of their debts, will be required to pay back what 
     they can afford.
       The bill provides substantial new protections for women and 
     children trying to collect their child support and alimony, 
     for example, by moving child support to first priority. Child 
     support collection authorities describe the bill as a 
     ``veritable wish list'' of provisions to assist them in their 
     child support collection efforts.
       The safe harbor provisions will protect lower income 
     Americans by ensuring that they will have access to Chapter 7 
     relief without qualification.
       The bill imposes significant new responsibilities and 
     disclosures on lenders, and particularly credit card lenders.
       The bill is fair to debtors, while it also stops the very 
     rich from exploiting the system to discharge their debts, 
     leaving everyone else holding the bag.
       The U.S. Chamber of Commerce will consider Scoring this 
     vote in its annual ``How They Voted'' Guide.

  Mr. NADLER. Mr. Chairman, I yield 2 minutes to the gentleman from 
Virginia (Mr. Boucher).
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman very much for 
yielding me this time.
  Mr. Chairman, I ask the gentleman from Wisconsin (Mr. Sensenbrenner) 
if he would be willing to yield 1 additional minute to me.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 1 additional minute to the 
gentleman from Virginia (Mr. Boucher).
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman from Wisconsin for 
yielding that additional 1 minute.
  Mr. Chairman, I rise in support of the bankruptcy reform legislation 
and urge its approval in the House. With this measure, we bring to 
conclusion a process that was launched 4 years ago to bring a much-
needed reform to the Nation's bankruptcy laws.
  During the time of the generally strong economy, consumer bankruptcy 
filings should be rare. Contrary, however, to this expectation, there 
are now more than 1.2 million annual bankruptcy filings, representing a 
five-fold increase since the last major bankruptcy law revision that 
took place in 1978.
  The current level of annual filings is more than 90 percent greater 
than the number of one decade ago. Bankruptcies of convenience are 
driving these increased filings.
  Bankruptcy was never meant to be a financial planning tool, but it is 
increasingly becoming a first stop rather than a last resort, as many 
filers who can repay a substantial part of their debt use the complete 
liquidation provisions of chapter 7 of the Bankruptcy Code rather than 
the court supervised repayment plans that are contained in chapter 13.
  Our legislation will direct more filers into chapter 13 plans. Those 
who can afford to make payments will be required to do so.
  This is a consumer protection measure. The typical American family 
pays a hidden tax of $550 each year arising from the increased cost of 
credit and the increases in prices for goods and services occasioned by 
the discharge of $50 billion annually in consumer bankruptcy debt. By 
requiring that people who can repay a substantial part of their debt do 
so in chapter 13 plans, we will lessen substantially that hidden tax.
  Another key point should be made about the provisions of the bill. 
The alimony or child support recipient is clearly better off under our 
bill than she is under current law. At the present time, she stands 
seventh in the rank of priority for the payment of claims in bankruptcy 
proceedings.
  Under the legislation we are putting forward, the child support or 
alimony recipient will have priority number one. Her claim will be 
first in line for payment. Other provisions of the bill also make it 
easier for her to execute against the assets of the bankruptcy state.
  For this reason, our bill has been endorsed by the child support 
enforcement agencies of a number of States because of the better 
ability to collect child support payments which this bill provides. I 
will say again that the child support recipient is clearly better off 
under this bill than she is under current law.
  This is a balanced bipartisan measure which contains new consumer 
protections and requires greater debt repayment by those who can afford 
to make the payments. Responsible borrowers and all consumers will 
benefit from its passage.
  I want to commend the gentleman from Pennsylvania (Mr. Gekas), the 
sponsor of this measure, for the leadership he has provided over the 
last 4 years as we have sought to make this important reform. The 
measure he brings to the floor today deserves the endorsement of this 
House.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentlewoman 
from New Jersey (Mrs. Roukema).
  Mrs. ROUKEMA. Mr. Chairman, I rise in strong support of this 
legislation and associate my remarks with the gentleman from 
Pennsylvania (Mr. Gekas) and the gentleman from Wisconsin (Mr. 
Sensenbrenner).
  This is a significant and substantial reform. It improves bankruptcy 
law and restores personal responsibility and integrity to our system. 
It does not diminish anything. It, at the same time, is a safety net 
for those who need it most.
  I would like to refer to the child support component of this 
specifically because I was a pioneer in child support legislation, 
going back to the mid-1980s; and I served on the Commission for 
Interstate Child Support Enforcement. I want to make it clear that this 
is a giant step in terms of protecting child support. It has made those 
payments number one. Let there not be any misunderstanding about that.
  The gentleman from Virginia (Mr. Boucher), the previous speaker, made 
reference to the State situation; and I would specifically like to 
reference that it does not, the automatic stay does not apply to State 
child-support collection agencies. I know from speaking with child-
support advocates in New Jersey, in my State that has been a leader in 
this respect, that this change is a top priority for them to ensure the 
continued payment of child support.
  Mr. Chairman, I want to again thank the leaders here and also 
acknowledge that there are components of this that the Committee on 
Financial Services has always agreed to.

[[Page 2552]]

  Let me focus with more explicit details to the key elements of the 
bill as follows:
  Mr. Chairman, I rise today in strong support of H.R. 333, the 
Bankruptcy Reform Act of 2001.


                              Introduction

  Consumer bankruptcy reform is an important issue that needs to be 
addressed now. In 1998 Americans filed a record of 1.4 million consumer 
bankruptcy petitions representing an over 650 percent increase since 
1978. Those who entered into bankruptcy erased an estimated $44 billion 
in consumer debt. This resulted in a hidden tax of almost $400 per 
household for families who have to pay monthly bills including 
mortgages, student loans, and insurance. It is important to note that 
this surge in bankruptcies in the last few years occurred at a time 
when the national economy has grown at a strong rate. In fact, between 
1986 and 1996, real per capita annual disposable income grew by over 13 
percent while personal bankruptcies more than doubled.
  Bankruptcy is fast becoming the first stop financial planning tool 
rather than a last resort. The purpose of reform is to improve 
bankruptcy law and practice by restoring personal responsibility and 
integrity in the bankruptcy system but also ensuring that the safety 
net of the Bankruptcy code is intact for those who need it most. I am a 
strong supporter of the consumer bankruptcy reforms contained in the 
bill and I will continue to work hard for bankruptcy reform 
legislation.


                           financial services

  Included in this bill are important provisions from H.R. 1161, the 
Financial Contract Netting Improvement Act of 2000 passed by the House 
last year. The netting provisions have one primary purpose: to minimize 
the systemic risk evident in our nation's financial system. 
Specifically, to minimize risk that could occur when a counterpart to a 
derivative contract becomes insolvent. It amends our banking and 
bankruptcy insolvency laws to require netting of the financial and 
over-the-counter derivatives instruments that are often traded among 
large financial institutions. It is a common-sense approach that should 
be enacted this Congress.
  These same provisions were part of last year's Working Group 
recommendations on the netting of derivatives and other financial 
contracts. The House passed similar netting provisions on three 
separate occasions in the last Congress--as a stand-alone bill, as part 
of last year's comprehensive Bankruptcy Reform bill and as part of H.R. 
4541, the Commodity Futures Modernization Act of 2000 which 
reauthorized the Commodities Exchange Act.


                             child support

  I would like to thank the Committee for the child support provisions 
in the Bankruptcy Reform Bill.
  I have a long history of standing up for child support enforcement, 
having been a pioneer on child support reforms and having served on the 
U.S. Commission for Inter-State Child Support Enforcement. It's a 
national disgrace that our child support enforcement system continues 
to allow so many parents who can afford to pay for their children's 
support to shirk these obligations. The so-called ``enforcement gap'' 
the difference between how much child support could be collected and 
how much child support is collected--has been estimated at $34 billion.
  This legal abuse is a criminal violation as well as neglect of our 
children's most basic needs. In addition, the taxpayers are abused 
because billions of tax dollars are paid out because these families are 
falling onto the welfare roles at alarming rates.
  H.R. 333 strengthens Child Support Enforcement by:
  Child support payments are moved to Number one when determining which 
debts are paid first in a bankruptcy case. Currently, child support 
payments rank seventh behind such priorities as attorney's fees.
  Confirmation and discharge of chapter 13 plans are made conditional 
upon the debtor's complete payment of child support. This will help 
further ensure that child support receives the priority it deserves.
  Providing that the automatic stay does not apply to a state child 
support collection agency that is trying to recover child support 
payments. I know from speaking with child support advocates in New 
Jersey, that this change is a top priority for them to ensure continued 
payment of important child support.
  The bill requires the GAO to study the feasibility of requiring all 
pertinent information about debtors to be collected by the Office of 
Child Support for the purpose to determine whether the debtor has 
outstanding child support payments. Chairman Gekas and the committee at 
my request included the study so we can better enforce the law and make 
sure that dependent families get every penny they deserve.
  These are important and real reforms that are supported by the Child 
Support Enforcement Services of New Jersey. The child support 
obligation for last year in New Jersey was $767 million. The total 
child support payments in arrears is $1.3 billion. Yes, I said $1.3 
billion, of which about $800 million is still collectible. Bergen 
County in my district, along with six other New Jersey counties, makes 
up 53 percent of the total collections. The reforms in this bill will 
help us get that outstanding money to the families that need it most.
  In conclusion, I strongly support this comprehensive bankruptcy bill 
and urge my colleagues support.
  Mr. NADLER. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Maine (Mr. Baldacci).
  Mr. BALDACCI. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  Mr. Chairman, I rise today in opposition to the Bankruptcy Abuse 
Prevention and Consumer Protection Act. I do not oppose bankruptcy 
reform. Rather, I oppose this particular legislation in the manner in 
which it is being considered.
  We have all heard the statistics concerning the alarming increase in 
bankruptcy filing over the past 2 decades. Consumer bankruptcy filings 
have reached record highs and our community banks and credit unions 
continue to suffer the burdens of their members' financial 
difficulties.
  Does abuse of the bankruptcy system exist? Yes. Is reform needed? 
Certainly. Should those consumers with the means available to pay back 
some of their debt be required to do so? Absolutely. Does this bill 
provide the solution that is needed? No.
  What is needed, Mr. Chairman, is balanced reform. We need reform that 
provides an adequate cap on homestead exemptions. We need reform that 
addresses the source of many recent personal bankruptcy filings, 
credit-card debt, in a proactive manner.
  As our Nation's economy slows down, we need reform that strikes a 
better balance between meeting the needs of lenders and the needs of 
families who are in good faith turning to bankruptcy for a fresh start.

                              {time}  1200

  Had this legislation been considered in a fair and open manner, we 
would have been given the opportunity to address those flaws.
  I am disappointed in the insistence the legislation be rushed to the 
floor for a vote without a serious opportunity for the committee or 
here on the floor to bring the bill into balance and achieve true 
bipartisan support. This is too important an issue to be rushed through 
the process as if we were merely naming a post office instead of 
sealing the economic fate of families and small businesses.
  This bill does not strike an appropriate balance between families and 
lenders. It does not address the proliferation of credit card companies 
that are extending credit far too easily. It imposes too stringent a 
means test that takes discretion away from the bankruptcy judges and 
prevents them from applying their good judgment in a particular case 
before them.
  Bankruptcy reform is clearly needed, but this bill is not the right 
solution. Once again I urge my colleagues to vote against this bill.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentleman 
from Ohio (Mr. Chabot).
  Mr. CHABOT. Mr. Chairman, I thank the gentleman for yielding me this 
time, and I rise in support of the Bankruptcy Abuse Prevention and 
Consumer Protection Act of 2001. I would also like to thank the 
chairman of the Committee on the Judiciary, the gentleman from 
Wisconsin (Mr. Sensenbrenner), for his leadership in this area and for 
moving the bill so expeditiously through the Committee on the Judiciary 
to the House floor for debate. It has been debated and debated; and we 
have had many, many hearings on this bill, so it is clearly not being 
rushed.
  I want to also thank the gentleman from Pennsylvania (Mr. Gekas) for 
his tireless commitment to securing meaningful bankruptcy reform.

[[Page 2553]]

  The text of H.R. 333, the bill we are considering today, is the 
result of last spring's conference committee between the House and 
Senate on which I served as a conferee. This vital piece of legislation 
protects individuals and businesses from having to pick up the tab for 
irresponsible debtors, debtors who are capable of paying off a 
significant portion of their debts. It protects responsible consumers 
and requires those who can afford to pay their debts to honor their 
commitments.
  Mr. Chairman, there are people who truly have a legitimate need to 
declare bankruptcy. No one is denying this. At times, hard-working 
Americans come up against special circumstances that are beyond their 
control. Family illness, disability, or the loss of a spouse may 
necessitate the need to seek relief. This legislation effectively 
protects these individuals. Too frequently, however, people who have 
the financial ability or earnings potential to repay their debts are 
simply seeking an easy way out of making good on their debts. While 
this may prove convenient for the debtor, it is not fair to their 
friends and neighbors who are ultimately stuck with the bill.
  As has been correctly stated by previous speakers, estimates show 
that the average American pays as much as $550 per year as a bad debt 
tax in the form of higher prices and increased consumer credit interest 
rates to cover the economic costs associated with excessive bankruptcy 
filings of others.
  Mr. Chairman, I urge support of the bill.
  Mr. NADLER. Mr. Chairman, I yield 5 minutes to the gentleman from 
North Carolina (Mr. Watt).
  Mr. WATT of North Carolina. Mr. Chairman, I thank the gentleman for 
yielding me this time.
  Mr. Chairman, in the 13 or so blocks from my residence to my office 
this morning I promised myself that I was going to be calm and 
unemotional in this debate, despite the fact that I think the process 
in the committee was a charade and I think this is going to be a 
charade. At the end of the day this bill will not be amended because it 
is about making a political statement that our Republican leadership 
can get the bill that they passed last time and it can be signed.
  This bill is an unfortunate convergence of expediency and politics. 
Nobody is likely to like what I say on either side of this issue 
because what I perceive has happened is that the people who wanted this 
bill knew that politically they could not get it unless they exempted 
the poorest people in the country from the provisions of this bill. And 
for those of us who start with the position that there is abuse in the 
bankruptcy system and have witnessed that abuse, we know that the abuse 
not only exists among high-income people but the abuse exists among 
low-income people also. But basically the same people who a couple of 
years ago were telling us that we need to make poor people responsible 
for their actions in the welfare reform context now say, for political 
expediency, we will accept a means test in the bankruptcy laws that 
basically sets up two classes of citizens for bankruptcy in this 
country, and that, Mr. Chairman, will be the legacy of this bill.
  I know there are people who have kind of walked away from the debate 
because they said, well, this does not impact my constituency any more 
because my constituency is poor and poor people are exempted from this 
bill. However, it is irrational to set up a pauper's bankruptcy court 
system and a higher-income court system in this country for 
bankruptcies, and that will be the worst legacy, I believe, that this 
bill will carry forward as we go on.
  Now, once that unholy coalition got formed and the expediency and 
politics got together and the agreement was cut, then the people who 
wanted this bill from the beginning started to pile on additional 
provisions, because there really was not an effective coalition out 
there fighting the bill. So now we end up with all kinds of provisions 
in this bill that are special interest provisions that really have no 
rational basis.
  There was no demonstration of abuse by small businesses of the 
bankruptcy code. It was about individual abuse. Yet we have a whole 
body of provisions in this bill now making it more difficult for small 
businesses to reorganize under the bankruptcy laws. And I tell my 
colleagues that the impact of that ultimately will be that person after 
person after person will lose their jobs because small businesses will 
not be able to reorganize and continue in business to continue the jobs 
for those people.
  So I do not know. It is difficult for me to even grab ahold of one or 
two or three provisions. The whole concept of this bill, the whole 
theory that divides poor people and rich people and says we are going 
to set up separate systems of bankruptcy for us, one, a pauper's court, 
in effect, and another a richer people's court, in effect, is just 
alien to anything I can come to grips with and is bad public policy.
  I understand why it was expedient, I understand the politics of it, 
but it is sorry public policy. And that will be the most devastating 
legacy of this bill.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 1 minute to the gentleman 
from Arizona (Mr. Flake).
  Mr. FLAKE. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  I rise in strong support of the bankruptcy reform legislation before 
us today. Many of the bankruptcy filings that do occur do originate 
from consumers who have been struck by sudden or unexpected financial 
hardship. No one wants to deny bankruptcy relief to those who truly 
deserve it. However, there are also consumers contributing to the 
upward trend in bankruptcy filing who could, with thoughtful planning 
and dedication, recommit themselves to repaying some of the debts they 
have incurred. These consumers, if permitted to simply walk away from 
their debts, will pass along their cost to others in the form of higher 
credit or tighter credit availability, increased tax burdens and higher 
prices for goods and services.
  Now, the average American household pays about $400 a year in hidden 
costs associated with consumer bankruptcy. The abusers of this system, 
it is important to note, are not simply low-income families. In fact, 
many of the bankruptcy filers actually earn more than $100,000 in the 
year they file for bankruptcy. While this legislation has been depicted 
as a one-size-fits-all approach, it is highly flexible.
  Mr. NADLER. Mr. Chairman, how much time is remaining?
  The CHAIRMAN pro tempore (Mr. LaHood). The gentleman from New York 
(Mr. Nadler) has 11 minutes remaining.
  Mr. NADLER. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  Mr. Chairman, I want to pose the question of why did we see the spike 
in bankruptcy filings up until 1998 and then saw a dramatic decline of 
some 15 percent in the last 2 years? Well, in 1998, the FDIC, the 
government agency, found that as a result of interest rate 
deregulation, credit card companies had become more profitable and were 
able to extend more unsecured credit to less creditworthy borrowers.
  In other words, credit card issuers were handing money out to just 
about everyone. Anyone with teenagers knows that because they receive 
bundles of credit card solicitations. In other words, people who should 
not have been extended credit were getting it.
  This conclusion, I suggest, is supported by an astonishing fact. The 
median family income of filers has dropped from $23,250 in 1981 to 
$17,650 in 1997. And we wonder why we have a crisis. But, as the 
filings peaked in 1998, the credit card companies saw their profits 
stall and began to tighten their underwriting requirements. In the last 
2 years, we have seen this decline. In other words, the invisible hands 
of the marketplace are working.
  As a University of Maryland study has concluded, the bankruptcy 
crisis is self-correcting. The reason is that lenders are profit-
maximizing institutions that select their own credit criteria

[[Page 2554]]

and they responded to this unexpected increase in personal bankruptcy. 
I find it rather ironic that proponents who usually proclaim the 
benefits of the free market would seek government intervention, a 
remedy, by the way, which will only impact the debtors and not impose 
any responsibility or accountability on creditors who behave 
irresponsibly.
  Let the market work and reject this bill.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 3 minutes to the gentleman 
from Iowa (Mr. Leach), the distinguished former chairman of the 
Committee on Banking and Financial Services.
  Mr. LEACH. Mr. Chairman, I thank the distinguished chairman for 
yielding this time to me.
  Bankruptcy is an extraordinarily sensitive subject. The issue here, 
we must bear in mind, is balance, rather than the need for a bankruptcy 
law itself. After all, one of the first laws of the first Congress was 
a bankruptcy law, which was passed because we had debtors prisons in 
the United States. We ended debtors prisons, which were part of our 
experience as well as the European experience. We never had the pound-
for-the-pound experience that was in Merchant of Venice in the European 
experience, but we had debtors prisons.
  This bill is about balance, that is, who bears the cost, not about 
the principle of bankruptcy itself. I do not know if the balance is 
exactly right, but I am convinced its thrust is and that it is a better 
circumstance than current law.
  I rise to stress one provision in this bill which I do not believe is 
controversial and was strongly supported by the Clinton administration 
Treasury as well as this Treasury and by the Federal Reserve, and that 
is the provision that relates to netting. We have a circumstance in 
international trade where the new phenomenon in international finance 
is a multi-trillion dollar trade in derivatives contracts, now over $30 
trillion. These are the notional values of derivatives contracts. If 
they are allowed to net out, they come to less than a trillion dollars 
and can be managed.
  So what this bill does is call for the automatic netting of 
derivatives contracts in the event of a bankruptcy circumstance. What 
this does is protect the international financial system and the 
domestic economy from true calamity in the event of a major derivatives 
party declaring bankruptcy.

                              {time}  1215

  In essence, in awkward economic times, this is the overwhelmingly 
most important provision of the bill. On its basis alone, this bill 
should be adopted.
  I thank the distinguished chairman of the Committee on the Judiciary 
for putting this provision in his bill. I am very appreciative that 
this step will become one of stabilizing rather than destabilizing the 
international economy. I urge my colleagues to support the bill.
  Mr. NADLER. Mr. Chairman, I yield myself 4 minutes.
  Mr. Chairman, I rise in opposition to this bill which will harm 
American families, American businesses, especially small businesses, 
harm children of divorce and open the door to even greater predatory 
practices by lenders. It is a wish list of every big money special 
interest group. It does not protect debtors, and that should be no 
surprise, because families in bankruptcy cannot make large campaign 
contributions, cannot buy ads in the paper, cannot hire fancy K Street 
lobbyists. This bill is the poster child for the need for campaign 
finance reform, the ugly result of much too much special interest money 
in politics.
  Why is this bill being rushed through? Is it because there is a 
crisis in bankruptcy? No, there is not. Chapter 7 filings have declined 
by almost 20 percent in the last 2 years. Declined. Although studies 
bought and paid for by the credit card industry a few years ago told us 
that up to 25 percent of chapter 7 debtors could repay a substantial 
portion of their debts, the only independent study, sponsored by the 
American Bankruptcy Institute, found that only 3 percent could do so. 
There is no crisis warranting the most radical rewrite of the 
Bankruptcy Code in a quarter century.
  The bill does not protect debtors and families. If it does, ask 
yourself why every consumer organization, every organization 
representing debtors, women's groups, children's advocacy groups, civil 
rights groups, seniors groups, bankruptcy judges, trustees and 
bankruptcy professionals have consistently criticized this bill for the 
last 4 years? How dare the sponsors of this bill tell us that it will 
improve the custodial mother's ability to collect child support because 
they make child support a priority when they know perfectly well that 
the priority expires with the bankruptcy discharge and Mom will then 
have to compete with the bank's collection department in State court 
with no priority. Why do the agencies that collect child support for 
State tax departments support this bill while those agencies who try to 
help mothers collect child support all uniformly oppose this bill? If 
this bill is good for business, why have some of the top judges and big 
business reorganization specialists all told us that this bill will 
make it harder to reorganize a business under chapter 11 and force more 
viable businesses into chapter 7 liquidation? As the economy slows 
down, is this any time to make business survival more difficult?
  If this bill is about personal responsibility, why have so many 
consumer protection amendments been rejected, watered down and ruled 
out of order so we cannot even debate these issues? Why does the bill 
contain a special interest provision to allow a small group of wealthy 
investors to avoid having a legal judgment against them enforced in our 
courts as required by international law? Why does the bill let anti-
abortion terrorists abuse the Bankruptcy Code to evade lawful court 
judgments through costly and lengthy litigation? Why does the bill fail 
to place a real cap on the millionaire's loophole, the unlimited 
homestead exemption? Why were we not even allowed to offer amendments 
and debate these issues on the floor?
  If this bill is so pro-family, why was an amendment by the gentleman 
from California (Mr. Schiff) which would have corrected the bill so 
that a battered, legally separated spouse would not have to count the 
income of her husband as her own even if she never saw a nickel of it 
taken out of the bill? Why would the bill require that she use this 
phantom income to repay her creditors and deny her relief when she 
cannot? Why should a landlord be allowed to evict tenants despite the 
normal bankruptcy stay? Will homelessness make people better able to 
repay their debts?
  Does any Member think that credit card companies will really return 
the extra profits this bill will give them over to consumers in the 
form of lower interest rates? How much of the profits that the credit 
card companies realized from interest rate deregulation have been 
passed on to consumers in lower interest rates? Have credit card 
interest rates gone down with mortgage rates and car rates?
  Why have the conferences been held in secret? Why have industry 
lobbyists had more access to the deliberations than most members of the 
Committee on the Judiciary, even those appointed as conferees?
  This bill is rotten and, like the bipartisan Garn-St Germain bill of 
a decade and a half ago that caused the savings and loan crisis and 
cost the taxpayers half a trillion dollars, this bill will come back to 
haunt every Member who votes for it when people lose their jobs, lose 
their families and are crushed under mountains of debt.
  I urge rejection of this bill.
  Mr. Chairman, I yield 1 minute to the distinguished gentleman from 
Virginia (Mr. Scott).
  Mr. SCOTT. Mr. Chairman, there are a number of reasons that have not 
been pointed out why this bill is a bad bill, the reasons of why we 
have a fresh start, a tradition that if someone is inundated by debts 
so that they can cash in all they have and get a fresh start. Some 
people incur debts through no fault of their own, a business reversal, 
illness, loss of a job. There is no balance in this bill.

[[Page 2555]]

  We have heard if you can pay a substantial portion of your bills, you 
ought to pay those. There is nothing in this bill that limits it to a 
substantial portion. If you can pay $167 a month out of whatever your 
bills are, millions of dollars, you have got to pay that $167 for the 
next 5 years. This will lead to frustration and desperation suffered by 
many Americans. If our goal were to increase the number of people that 
go berserk and shoot their colleagues, this is the kind of frustration 
and desperation that would lead to that kind of result.
  I would hope that we would keep our traditional bankruptcy laws so 
that those who are totally inundated with debts and can never get out 
can get a fresh start.
  Mr. CONYERS. Mr. Chairman, I am delighted to yield 2 minutes to the 
gentlewoman from California (Ms. Lee).
  Ms. LEE. Mr. Chairman, I thank the gentleman from Michigan for 
yielding me this time and also for his lifetime work on behalf of 
people in our country.
  I rise today in strong opposition to this anticonsumer, antiworking 
family, antiwoman, anti-low income, antichild bankruptcy legislation 
and to support the Democratic alternative which provides for true 
bankruptcy reform. Many Americans, as we know, were left out of the 
economic boom of the past decade. They are saving less and accumulating 
more debt. To add insult to injury, the credit card companies are using 
aggressive, unsolicited marketing techniques to offer huge lines of 
credit to consumers who cannot afford it, including college students 
who have no income. All of these factors contribute to a system where 
more and more Americans are struggling just to get by, and some need to 
rely on bankruptcy as a safety net. This has nothing to do with being 
irresponsible or not wanting to pay one's bills.
  Many working families are forced into bankruptcy when emergencies 
arise, including loss of a job, the loss of a spouse or long-term 
illness. Instead of helping families get back on their feet in these 
cases, the Republican reform bill would make declaring bankruptcy under 
chapter 7 or 13 much more difficult. This is just plain wrong.
  The domestic support provisions in H.R. 333 are inadequate. Hundreds 
of thousands of women who are owed child support or alimony would be 
harmed financially under the Republican bill. The bill does nothing to 
protect women owed child support by men who declare bankruptcy or those 
who need to declare bankruptcy themselves due to financial hardship 
when their former spouse or noncustodial parent fails to pay child 
support. Additionally, this bill fails to ensure that parents and 
children will have first claim on the bankruptcy filer's funds rather 
than big business collection departments. This bill says to the 
majority of ordinary Americans that we are abandoning them on behalf of 
big-time corporations. It is wrong.
  The Democratic alternative is sensible and is fair. The Republican 
bankruptcy reform bill is punitive.
  Mr. CONYERS. Mr. Chairman, I proudly yield the balance of my time to 
the gentleman from Ohio (Mr. Kucinich).
  The CHAIRMAN pro tempore (Mr. LaHood). The gentleman from Ohio is 
recognized for 1 minute.
  Mr. KUCINICH. Mr. Chairman, this bill is bad for consumers and bad 
for business. Recently in Cleveland, the district I represent, a major 
American company sought to reorganize under chapter 11 of the 
bankruptcy laws. LTV, one of the most important employers in Ohio, one 
of the most strategically important companies in the country, was 
compelled to seek bankruptcy protection because of factors beyond their 
control, unfair and illegal dumping of cheap foreign steel and 
inadequate Federal enforcement of antidumping laws.
  But if H.R. 333 had been law, LTV would not have been able to 
reorganize under chapter 11. Instead, the company would have been 
dissolved and the assets liquidated. Thousands of jobs would have been 
lost. H.R. 333 makes a change to existing law reducing the assets 
available to a debtor company for funding operations during a 
reorganization. H.R. 333, had it been in effect, would have affected 
LTV's ability to obtain credit, thus keeping the plants open during 
bankruptcy proceedings.
  This is only one of the many extreme changes in the law that H.R. 333 
would make. It is a bad bill, but especially as we may be on the verge 
of a recession at a time when more businesses will need to reorganize 
or else face layoffs and liquidation, this bill closes the door to 
reorganization. It virtually guarantees more layoffs, more liquidation, 
and more ruin for entrepreneurs, both large and small. Defeat H.R. 333.
  Mrs. MALONEY of New York. Mr. Chairman, it is with great regret that 
I come to the floor in opposition to this bankruptcy bill.
  Mr. Chairman, I supported this legislation when the House last took a 
recorded vote on bill.
  Unfortunately, the bill that we are voting today lacks a critically 
important amendment that has been added in the Senate.
  In the Senate, Judiciary Chairman Hatch and Senator Schumer of New 
York have agreed to a compromise amendment that resolves the issue of 
the treatment of perpetrators of abortion clinic violence who declare 
bankruptcy.
  Bankruptcy reform is important but clinic bombers should not be 
allowed to excuse penalties assessed on them by the courts through 
bankruptcy.
  This is a growing problem that the majority is ignoring.
  More than 2,400 acts of violence have been reported at family 
planning clinics since 1997. These include bombings, arsons, death 
threats, kidnapings, asaults, and other acts of harassment.
  I will carefully follow the progress of this issue in conference and 
I strongly urge my colleagues to add the Hatch-Schumer compromise.
  Mr. DINGELL. Mr. Chairman, I rise today in opposition to H.R. 333, 
the Bankruptcy Abuse Prevention and Consumer Protection Act of 2001. 
H.R. 333 will neither prevent more bankruptcies from occurring, nor 
protect consumers. It will, however, sanction the continued predatory 
and abusive practices of the credit card industry.
  There is no bankruptcy crisis in America. Despite the rascality 
perpetrated by the credit card industry, including the solicitation of 
our minors, seniors and pets, personal bankruptcies are not increasing. 
In fact, even as the average household debt burden has continued to 
climb, over the past two years personal bankruptcies have dropped by 
more than 15 percent.
  Studies show that irresponsible and overly aggressive lending 
practices were behind the high level of bankruptcies in the mid 1990's. 
However, the industry has not learned its lesson. Even as the industry 
enjoys its highest profit level in five years, it refuses to take 
responsibility for its poor lending practices and continues to increase 
its marketing and credit extension. Last year, the credit card industry 
increased its mail solicitations by about 14 percent. Additionally, 
total credit extended, which included unused credit lines and debt 
incurred by consumers, approached three trillion dollars for the first 
time ever.
  This is outrageous behavior and it should not be rewarded. 
Unfortunately, the Republican leadership feels differently and has 
crafted a bill which encourages this despicable behavior at the expense 
of our most at risk citizens. Americans deserve better, especially at a 
time when the economy is slowing and more jobs are in jeopardy. As 
such, I urge all of my colleagues to oppose this wrongheaded piece of 
legislation.
  Mr. LaFALCE. Mr. Chairman, this is the wrong bill at the wrong time. 
It is unfair and unreasonable to consider bankruptcy reform without 
focusing attention on the practices of the credit card issuers that 
directly contribute to consumer bankruptcies. Unfortunately, the bill 
being considered today will only encourage credit card companies to be 
more aggressive in exacerbating the problem of consumer debt.
  The timing of this bill could hardly be worse. By all accounts, we 
are in the midst of a significant economic slowdown, which will 
undoubtedly put a strain on many families' budgets in the coming 
months. Bankruptcy acts as a safety valve during economic slowdowns, 
providing relief to families that have reached a financial crisis point 
in the midst of difficult economic times. Yet, Congress is moving full 
steam ahead to pass a bill that will shut off the safety valve for many 
families that have reached a financial crisis point, most often through 
job loss, a medical problem, or divorce.
  Moreover, many families face these financial crises as the direct 
result of the practices of companies assisted by this legislation.
  The credit card industry is before Congress asking for relief from 
allegedly inadequate

[[Page 2556]]

bankruptcy statutes. Yet, these same companies continue to aggressively 
market credit cards to some of our most financially vulnerable 
citizens--students, seniors and the working poor. Credit card companies 
issued 3.3 billion credit card solicitations last year, many of which 
have been targeted at these vulnerable groups. Is it any wonder that 
young people in their twenties and older Americans are the fastest 
growing groups filing for bankruptcy?
  The credit card industry continues to aggressively market to these 
groups because it's good business for them. Profits for the industry 
are up, despite higher overall bankruptcies during the past decade. 
Nothing boosts the bottom line better than a growing number of families 
who can do no more than pay the monthly minimum on their credit card 
bills. If too many customers ultimately default, the companies simply 
make up for it by raising fees still higher.
  But now they come to Congress asking for relief from the burden of 
so-called ``irresponsible'' customers who default on their debts. I 
would suggest that some of these companies only have themselves to 
blame for much of the bankruptcy problem. No less a pro-business source 
than the Wall Street Journal recently had this to say on the issue: 
``America isn't a nation of deadbeats. By one estimate, at least 15% of 
families could benefit financially by filing for bankruptcy. Many more 
could do so with a little strategic planning beforehand. Yet fewer than 
2% do.''
  On this point, I would urge my Republican colleagues to consider 
letting the free market do its job. If credit card companies have 
issued too much bad credit, then it is up to these same companies to 
correct their mistakes. They should not expect any help from the 
government in avoiding the results of their own bad decisions.
  In sum, the current bankruptcy bill is out of balance. The bill 
increases the burden of families who find themselves unable to repay 
heavy loads of consumer debt because of job loss, medical illness or 
the failure of an ex-spouse to pay child support. But, it does not 
adequately address one of the principal causes of burdensome consumer 
debt--misleading and deceptive practices of the credit card companies 
who often aggressively induce the debt.
  Congress has failed to act responsibly in its consideration of this 
legislation. The proponents of the bill have rushed this bill through 
without full Congressional deliberations, where issues important to 
consumers and working families could be considered. The Committee 
process has been circumvented. The bill makes significant changes to 
the Truth-In-Lending Act, but the Financial Services Committee has 
passed up the opportunity to review the legislation. We have ignored 
the advice of the National Bankruptcy Conference, a balanced group of 
bankruptcy experts that Congress has listened to in every bankruptcy 
reform effort for the last forty years, until this one.
  I had hoped to introduce an amendment to the bankruptcy bill in order 
to address these unfair and deceptive credit card practices. 
Unfortunately, in their haste to rush the bankruptcy bill through the 
Congress, the Republican Leadership has blocked my amendment from being 
considered during today's Floor debate.
  I feel strongly that Congress must address these abusive practices, 
and that is why I am joining with the Gentleman from Michigan, Mr. 
Conyers, in a motion to recommit that will address concerns of 
populations which have proven to be most vulnerable--students and young 
people. People in their twenties are the fastest growing group filing 
for bankruptcy. To a large degree, that is the result of aggressive 
targeting of students and young people just starting out in life by 
credit card companies that trap them into a cycle of debt before they 
have adequate income to sustain it.

  Mr. ISRAEL. Mr. Chairman, I rise in support of H.R. 333, the 
Bankruptcy Abuse Prevention and Consumer Protection Act. At its core, 
this bill responsibly ensures that those who can afford to repay their 
debts do so, while protecting important priorities such as child 
support, alimony, and education savings.
  Last year, over $40 billion was lost through bankruptcy filings. This 
not only affects businesses, but families as well. Bankruptcy costs are 
passed on to consumers in the forms of higher interest rates and 
restricted access for lower and middle-income taxpayers to affordable 
mortgages. Indeed, bankruptcies cost each American household about $400 
last year. It is fundamentally unfair that equal access to credit is 
threatened by those who abuse the system--irresponsible filings by 
people who can repay their debts.
  H.R. 333 provides a mechanism to distinguish between those who can 
repay their debt from those who cannot. If a filer earns more than the 
median income and can afford to repay either $6,000 or 25 percent of 
non-priority debt over five years (after taking into account living 
expenses and priority expenses such as child support), then the debt 
should be repaid over time. This bill insists on personal 
responsibility for repaying obligations while providing bankruptcy 
protection for special situations such as declining income and 
unexpected family and medical expenses.
  Mr. Chairman, according to a recent study 15 percent of people 
claiming Chapter 7 bankruptcy relief have the ability to repay 64 
percent of their debt. Bankruptcy reform recognizes that when you have 
the means to repay your debt, you should do so. It restores personal 
responsibility. It compassionately recognizes that some unique and 
special circumstances should be considered when ordering a repayment of 
debt. It will increase access to credit and home mortgages for middle 
and low-income families.
  That is why I support H.R. 333 today.
  Mr. KIND. Mr. Chairman, I rise to share my support for H.R. 333--the 
Bankruptcy Abuse Prevention and Consumer Protection Act. This measure, 
though not perfect, ensures debtors who can afford to repay their debt 
do so, while at the same time protecting consumers.
  Bankruptcies negatively affect people in the form of higher prices 
and tightened credit access for lower- and middle-income taxpayers. It 
is estimated that over $40 billion was discharged through bankruptcies 
last years. As we all know, money lost to bankruptcies is passed on to 
consumers in the form of higher prices for goods and services.
  H.R. 333 also ensures that those individuals with the ability to 
repay their debts do so while protecting those truly in need. This 
legislation creates a needs based system and assures that those who can 
afford to pay are required to do so. A recent study determined that 15 
percent of Chapter 7 filers could repay an average of 64 percent of 
their debt.
  Most importantly, H.R. 333 makes all marital and parental obligations 
to children the first priority for payment in bankruptcy proceedings. 
It is for this reason a number of legal and child support enforcement 
organizations strongly support the bill.
  While H.R. 333 is a good bill that could get better, it is my hope 
that House and Senate negotiators, during conference committee 
discussion, will work to eliminate current homestead exemption 
loopholes and seek to protect families from abusive reaffirmation 
practices of creditors.
  Mrs. KELLY. Mr. Chairman, I rise today in strong support for H.R. 
333, the Bankruptcy Reform Act, because it boils down to two words: 
personal responsibility. If one assumes a debt, they should do 
everything in their power to pay it off. However, a safety net has to 
remain for those who legitimately cannot pay their debts. Creditors 
should be made whole, if possible.
  Some of my colleagues here today are trying to paint the word 
creditors to mean faceless financial institutions who are tricking 
consumers into assuming debt. They specifically speak of credit card 
debt. They unfortunately failed to note that credit card debt in the 
United States amounts to only 3.7 percent of all consumer debt. 
Furthermore, only 1 percent of credit card accounts end up in 
bankruptcy. Of that 1 percent it is estimated that 15 percent of those 
accounts can afford to repay some or all of their debt.
  The people who are truly being hurt by our current bankruptcy system 
are Americans who play by the rules and pay their debts. Bankruptcy 
costs the average American family an average per year of $400.
  Needs-based bankruptcy reform is well overdue, and that is what H.R. 
833 delivers. It is the people who game the system that we have to 
stop.
  I heard from my colleague from Virginia (Mr. Moran). He stated last 
year more people filed for bankruptcy than graduated from college. That 
is a staggering fact. I am pleased to support H.R. 333's provisions 
which strengthen the Bankruptcy Code protections for ex-spouses and 
children. They have to be supported.
  In the current bankruptcy law, child support and alimony are placed 
seventh behind attorney fees as debt obligations. If enacted, this bill 
would move child support and alimony payments to first on the list of 
debt obligations.
  Also under current law, some debtors use the automatic stay to avoid 
paying child support payments after they file for bankruptcy. H.R. 333 
exempts State child support authorities from the automatic stay, thus 
insuring less delay in the proper payment of child support. I 
vehemently oppose any legislation that would reduce the ability of 
women and children to receive support payments.
  H.R. 333 is a good bill that moves us in the right direction, and I 
ask my colleagues from

[[Page 2557]]

both sides of the aisle to join me in support of this reasonable 
reform.
  Ms. ROYBAL-ALLARD. Mr. Chairman, I rise in opposition to H.R. 333, 
the Bankruptcy Abuse Prevention and Consumer Protection Act, that we 
will be voting on later today. We all agree that bankruptcy reform is 
necessary. However, the bill clearly puts creditors ahead of families. 
A fair bankruptcy reform bill would balance important obligations, like 
child support, with a creditor's right to receive payment. It would 
take into account the fact that most of the people who declare 
bankruptcy have been through trying ordeals such as divorce, 
unemployment, and illness resulting in exorbitant medical bills they 
can't afford to pay.
  In addition, a truly effective bill would address a major cause of 
bankruptcy: predatory lending. But H.R. 333 remains silent on these and 
other critical issues. This bill is a missed opportunity to incorporate 
some real protections for American families.
  Simply stated, it is good for credit card companies and bad for 
consumers. I urge my colleagues to oppose this bill.
  Mr. BEREUTER. Mr. Chairman, this Member wishes today to express his 
support for the Bankruptcy Abuse Prevention and Consumer Protection 
Act, H.R. 333. It is important to note that this Member is an original 
cosponsor of H.R. 333.
  First, this Member would thank the distinguished gentleman from 
Pennsylvania (Mr. Gekas), for introducing the House bankruptcy 
legislation, H.R. 333. This Member would also like to express his 
appreciation to the distinguished gentleman from Wisconsin (Mr. 
Sensenbrenner), the Chairman of the Judiciary Committee, for his 
efforts in getting this measure to the House Floor for consideration.
  This Member supports the Bankruptcy Reform Act for numerous reasons; 
however, the most important reasons include the following:
  First, this Member supports the provision in H.R. 333 which provides 
for a means testing--needs-based--formula when determining whether an 
individual should file for Chapter 7 or Chapter 13 bankruptcy. Chapter 
7 bankruptcy allows a debtor to be discharged of his or her personal 
liability for many unsecured debts. In addition, there is no 
requirement that a Chapter 7 filer repay many of his or her debts. 
However, Chapter 13 bankruptcy filers commit to repay some portion of 
his or her debts under a repayment plan.
  Some Chapter 7 filers actually have the capacity to repay some of 
what they owe, but they choose Chapter 7 bankruptcy and are able to 
walk away from these debts. For example, the stories in which an 
individual filed for Chapter 7 bankruptcy and then proceeds to take a 
nice vacation and/or buys a new car are too common. Moreover, the 
status quo is costing the average American individual and family 
increased costs for consumer goods and credit because of the amount of 
debt which is never repaid to creditors.
  As a response to these concerns, the needs-based test of H.R. 333 
will help ensure that high income filers, who could repay some of what 
they owe, are required to file Chapter 13 bankruptcy as compared to 
Chapter 7. This needs-based system takes a debtor's income, expenses, 
obligations and any special circumstances into account to determine 
whether he or she has the capacity to repay a portion of their debts.
  Second, this Member supports the additional monthly expense items 
that are exempted from consideration under the needs-based test which 
determines, under H.R. 333, whether a person can file either a Chapter 
7 or 13 version of bankruptcy. These expenses include the following: 
reasonable expenses incurred to maintain the safety of the debtor and 
debtor's family from domestic violence; an additional food and clothing 
allowance if demonstrated to be reasonable and necessary; and 
reasonable and necessary expenses for the care and support of an 
elderly, chronically ill, or disabled member of the debtor's household 
or immediate family.
  Lastly, this Member supports the permanent extension of Chapter 12 
bankruptcy in H.R. 333 since it allows family farmers to reorganize 
their debts as compared to liquidating their assets. Using the Chapter 
12 bankruptcy provision has been an important and necessary option for 
family farmers throughout the nation. It has allowed family farmers to 
reorganize their assets in a manner which balances the interests of 
creditors and the future success of the involved farmer.
  If Chapter 12 bankruptcy provisions are not permanently extended for 
family farmers, its expiration would be another very painful blow to an 
agricultural sector already reeling from low commodity prices. Not only 
will many family farmers have no viable option but to end their 
operations, it likely will also cause land values to plunge. Such a 
decrease in value of farmland will affect the ability of family farmers 
to obtain adequate credit to maintain a viable farm operation. It will 
impact the manner in which banks conduct their agricultural lending 
activities. Furthermore, this Member has received many contacts from 
his constituents supporting the extension of Chapter 12 bankruptcy 
because of the situation now being faced by our nation's farm families. 
It is clear that the agricultural sector is hurting and by a permanent 
extension of the Chapter 12 authorization, Congress can avoid one more 
negative possibility.
  In closing, for these aforementioned reasons and many others, this 
Member urges his colleagues to support H.R. 333.
  Ms. SLAUGHTER. Mr. Chairman, I offered with my colleague, the 
distinguished ranking member of the Judiciary Committee (Mr. Conyers), 
an amendment in the Rules Committee that would have specified that 
creditors would not be able to collect the money owed them by a debtor, 
if that action would prevent the debtor from making family payments, 
like alimony and child support.
  Our amendment was not made in order. However, that does not mean I 
will remain silent on this issue. In 1994, I introduced the Spousal 
Equity in Bankruptcy Amendments to give priority to child and spousal 
support payments in bankruptcy proceedings, so that debtors' 
obligations to their children could not be discharged. That legislation 
became law as part of the Bankruptcy Reform Act of 1994.
  Due to these and other child support enforcement reforms, child 
support collections have increased by 123 percent since 1992. But we 
have further to go, as American children in fiscal year 1999 were still 
owed $76.9 billion in child support. The supporters of this bill argue 
that since the bill creates a new priority in bankruptcy proceedings 
for child support and alimony payments, it provides far greater 
protections from bankruptcy for such payments than current law. They 
are wrong. Do not just take my word for it. Twenty women's and 
children's organizations and more than 100 professors of bankruptcy and 
commercial law have expressed their grave concerns about some of the 
provisions of the bankruptcy reform bill, particularly the effects of 
the bill on women and children.
  This bill forces women and children as creditors to compete with 
powerful creditors, such as credit card issuers, to collect their 
claims after bankruptcy. In other words, the bill divides the pie into 
more pieces, leaving less for women and children who are owed child 
support and alimony. I urge all my colleagues to oppose H.R. 333 for 
this reason.
  Mr. SMITH of Michigan. Mr. Chairman, my amendment is a simple one. It 
would raise the aggregate debt level a family farmer could have and 
qualify for Chapter 12 bankruptcy. Currently, the limit is set at 
$1,500,000, which was the original limit set in 1986 when Chapter 12 
was created. It has not been raised since then although CPI-U has 
increased approximately 43 percent. With the increase in land and 
equipment values the debt level needs to be increased to accommodate 
family farmers.
  It's important for farmers to be able to qualify for Chapter 12. 
Chapter 11 is for larger corporations and is very costly and requires 
that all creditors be paid off, which is typically impossible for a 
farmer. Chapter 13, on the other hand, can't be used by corporate 
entities, has low debt levels and doesn't provide for rewrites of debt, 
which is typical in a farm bankruptcy.
  H.R. 333 does provide that Chapter 12's aggregate debt limit will be 
indexed starting this year. But this ignores the deterioration of the 
debt level's value from 1986 through 2001. My amendment takes into 
account this change in the CPI since then and adjusts the debt limit 
accordingly. The Senate has included this provisions in their bill and 
I am assured the increase will be in the final version we send to the 
President.
  Mr. CROWLEY. Mr. Chairman, I rise in strong support for H.R. 333, The 
Bankruptcy Abuse Prevention and Consumer Protection Act of 2001. This 
legislation represents a good, commonsense approach towards tackling 
the important yet complicated issues surrounding the issue of 
bankruptcy.
  While the United States has undergone the greatest period of economic 
expansion in American history, in contrast, our nation has also 
witnessed over 1 million bankruptcy filings in each of the past five 
years. The facts show that in 1997 the consumer bankruptcy rate filing 
hit a record level of 1.3 million with $40 billion in consumer debt 
discharged. It is estimated that bankruptcy discharges cost each 
American household $400 a year and cost retailers billions. And recent 
trends demonstrate that our Nation--and our economy--can expect even 
more bankruptcies in the coming years. Ultimately, consumers pay the 
price for the surge in bankruptcy filings.

[[Page 2558]]

  Last year, working in a bipartisan fashion, the House of 
Representatives passed basically this same legislation on an 
overwhelming vote of 318 to 108. The fundamental issue that drove 
Congress to pass this bill in the 106th Congress, and hopefully again 
today is--Why should consumers who work hard and pay their bills on 
time be forced to pick up the check for those who can afford to repay 
their debts, but instead choose to walk away and burden others with 
their responsibilities?
  A few days ago, representatives from a number of credit unions came 
to my office, including Alan Kaufmann of the Melrose Credit Union in 
Woodside, Queens in my Congressional District. He detailed about how 
the hard working, middle class people of his credit union--and of my 
district--continually have to pick up the tab for those who file 
bankruptcy--whether legitimately, as many do, or irresponsibly, as far 
too many do.
  In advocating for this legislation, I stress several key components 
of this bill: This legislation places child and family support first in 
bankruptcy--above all other claims. Let me repeat, this bankruptcy 
reform legislation recognizes that no obligation is more important than 
that of a parent to his or her children. This bill includes 9 
provisions designed to strengthen protections for child support and 
alimony payments. Family and child support obligations come first--no 
ifs, ands or buts.
  Second, this legislation will assist those that have filed for 
bankruptcy by assisting those people to pay their bills on time as well 
as create a new program about financial education. In fact, this bill 
creates a Debtors Bill of Rights. Specifically, H.R. 333 provides for 
new disclosures which bankruptcy petition preparers and attorneys who 
represent debtors must provide their customers or clients. This ensures 
that debtors are better informed about the nature and scope of 
bankruptcy, the different remedies available, and the significance of 
bankruptcy on an individual's personal financial affairs. The intent is 
also to allow debtors to better negotiate with their attorneys about 
fees and services provided.
  Most importantly, this bill mandates personal responsibility. As I 
stated earlier, even in the booming economy of the mid and late 
1990's--America saw record numbers of new bankruptcy filers. All of 
this costs tens of billions of dollars, and these losses by companies 
are passed directly onto Americans--Americans who pay their debts, use 
their credit cards responsibly and balance their checkbooks. These 
people should not be held responsible for bad debtors--but they are 
currently, and this is wrong.
  As a believer in personal responsibility and working to protect the 
working and middle class residents I represent in Queens and the Bronx, 
I support this legislation. Responsible borrowers should not be paying 
the price for bankruptcy abuse--and too many of my constituents--hard 
working, middle class people--are paying for the sins of others.
  I believe that individuals with the means to repay some or all of 
their debt should be required to meet their financial obligations and 
not pass their debts onto society. Only those who truly cannot repay 
their debts should be bale to immediately discharge all of their debts 
under Chapter 7--and this bill protects those people who are in 
greatest need of bankruptcy protection.
  This is a good bill, it promotes personal responsibility and tightens 
up our current laws. Families and children are protected; consumers are 
protected; our local credit unions are protected and most important, 
hard working Americans who pay their bills and balance their household 
budgets are protected.
  I ask for the support of all of my colleagues for this commonsense 
legislation.
  Mr. BENTSEN. Mr. Chairman, I rise today in support of H.R. 333, the 
``Bankruptcy Abuse Prevention and Consumer Protection Act of 2001.''
  Mr. Chairman, for most people, the decision to file for bankruptcy 
protection is made with a heavy heart when all hope of managing one's 
personal finances has disappeared. Most consumers who file for 
bankruptcy are working families who have experienced a catastrophic 
event such as illness, job loss, or a recent divorce. The decision to 
file for bankruptcy is not one easily reached. It is the ultimate 
public statement of financial failure and a cry for help.
  However, there are some with average or higher incomes who have 
exploited our bankruptcy laws to walk away from debt that they have the 
means to repay. H.R. 333 is virtually identical to H.R. 2415, 
legislation that passed both Houses in the 106th Congress. The main 
feature of this bill is the application of a means test to bar such 
individuals from filing for bankruptcy under Chapter 7--a section of 
the bankruptcy code that allows the debtor to escape liability for 
unsecured debts, such as credit card bills.
  Though the number of personal bankruptcy filings skyrocketed in the 
past two decades, reaching a record of 1.44 million in 1998, recent 
statistics tell another story. However, in the past two years, 
bankruptcy filings have declined. Total filings first dropped 8.5 
percent, to 1.32 million in 1999 and then another 5 percent, in 2000, 
to 1.25 million. With the number of consumer filings falling, the 
question emerges, is bankruptcy reform still necessary? I believe it 
is.
  While most people treat bankruptcy as a last resort, there are some 
debtors that seek to exploit our current bankruptcy laws to simply walk 
away from consumer debt. This even-handed measure establishes a means 
test for debtors to determine their eligibility for bankruptcy relief, 
based on the ability to repay debt under Chapter 13. Moreover, this 
legislation protects those low-income consumers who need a fresh start 
by allowing them to discharge their debts and rebuild their lives. 
Additionally, under H.R. 333, creditors also would receive 
unprecedented fair treatment. Under H.R. 333, all debts, secured or 
unsecured, are treated equally under bankruptcy law.
  Mr. Chairman, I am very pleased that H.R. 333's $100,000 federal 
homestead cap (indexed for inflation) would only preempt state law if 
the homeowner file for bankruptcy protection within two years of 
establishing their initial homestead in the state, unless the value in 
excess of that amount occurs from a transfer of residences within the 
same state. Thus, any individual who has an existing homestead in Texas 
for two or more years would not be subject to the cap nor would they, 
anytime they moved within the state.
  The Texas Homestead Law is a critical part of the Texas Constitution 
and is part of the history of Texas. The Texas Homestead Law was 
designed to protect settlers in Texas and to prevent the sale of their 
home for payment of debts. Sam Houston, one of the original founders of 
the Republic of Texas, was a strong proponent of including the Texas 
Homestead Act in the Texas Constitution because he had personal 
experience with declaring bankruptcy. In his former residence of 
Tennessee, he and his family lost everything. Sam Houston wanted to 
make sure that future Texans would not suffer the same humiliation.
  H.R. 333 respects the Texas Homestead Act. I would not support any 
measure that would not do so. I have worked with others who represent 
Texas, including Senator Kay Bailey Hutchison, to ensure that Texans 
retain their homestead exemption. In 1999, during consideration of an 
earlier version of this bill by the House, Representative Bentsen 
successfully authored an amendment allowing states to opt out of the 
federal law placing a cap on the amount of equity protected by state 
homestead laws. The Bentsen amendment allows states to opt out of any 
federal cap. This language was amended in the Senate to create a two-
year residency requirement before one's homestead is exempt from the 
cap. H.R. 333 maintains the Senate language, protecting the vast 
majority of Texas homeowners.
  Mr. Chairman, while this legislation is not perfect, I believe it has 
some important provisions, including expanding the disclosure 
requirements under the Truth and Lending Act with respect to several 
types of credit plans and prohibiting retroactive finance charges with 
respect to open-ended credit card accounts. Therefore, Mr. Chairman, I 
urge passage of H.R. 333.
  Mr. KINGSTON. Mr. Chairman, I have been a strong supporter of this 
bill throughout its formulation. Despite the healthy economy these past 
few years, people are still going bankrupt in record numbers. This 
legislation included some much needed reforms in the area of 
bankruptcies, especially in terms of personal credit.
  I have also been very actively engaged in a section of this bill 
which deals with bankruptcy judges. In 1998, there were over 26,000 
bankruptcy cases filed in the Southern and Middle Judicial Districts of 
Georgia alone, with only one shared judge to manage this tremendous 
volume. I fought hard to ensure that this bill would establish a new 
judgeship in the Southern Judicial District, which is the 7th busiest 
in the United States. The new judgeship would benefit most of the 
state, spanning five congressional districts, covering 3 million 
people.
  Finally, I would like to thank Chairman Gekas for his hard work in 
this area, and for the work of Alan on his personal staff, and Susan on 
the committee staff. Without everyone's team effort in dealing with 
this legislation, we would not have been successful.
  Mr. COSTELLO. Mr. Chairman, I rise today in support of H.R. 333. 
Consumer bankruptcy filings have increased over the past two decades, 
peaking at 1.44 million in 1998. Flaws in the bankruptcy law allow 
individuals to walk away from their debts, regardless of whether they 
are able to pay a portion of them. H.R. 333 offers a fresh start to 
those overwhelmed

[[Page 2559]]

by debt and financial obligations, while also ensuring that debtors 
with financial means to pay a portion of their debt will have to do so.
  I believe this legislation is a good start at consumer protection 
from predatory credit card companies. Credit card companies need to be 
held responsible for continued aggressive credit card marketing. The 
bill includes new safeguards against abusive reaffirmation agreements, 
new credit card disclosure specifications, and requirements that credit 
card companies provide explanatory statements on introductory interest 
rates and minimum payments.
  In addition, I support this bill because it considers domestic 
support obligations, such as alimony and child support, as priority 
debts. These debts are nondischargeable, meaning they must be paid, 
regardless of whether an individual files under Chapter 7 or Chapter 
13. This legislation raised the priority of domestic support 
obligations from seventh to first, thereby granting greater protection 
to child and domestic support.
  Mr. Chairman, it is important to ensure bankruptcy protection is 
available to those who truly need it. This legislation provides such 
protections, places a higher priority on domestic support obligations, 
and offers some consumer protection from credit card companies. For 
these reasons, I support this legislation.
  Mr. SENSENBRENNER. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN pro tempore. All time for general debate has expired.
  Pursuant to the rule, the amendments printed in the bill are adopted 
and the bill, as amended, is considered read for amendment under the 5-
minute rule.
  The text of H.R. 333, as amended, is as follows:

                                H.R. 333

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

     SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Bankruptcy 
     Abuse Prevention and Consumer Protection Act of 2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; references; table of contents.

                    TITLE I--NEEDS-BASED BANKRUPTCY

Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Sense of Congress and study.
Sec. 104. Notice of alternatives.
Sec. 105. Debtor financial management training test program.
Sec. 106. Credit counseling.
Sec. 107. Schedules of reasonable and necessary expenses.

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation practices.

                   Subtitle B--Priority Child Support

Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases 
              involving domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation 
              proceedings.
Sec. 215. Nondischargeability of certain debts for alimony, 
              maintenance, and support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential 
              transfer motions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and 
              loans.

                 Subtitle C--Other Consumer Protections

Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not 
              complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. Residency requirement for homestead exemption.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide 
              required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the 
              plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the 
              Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitation.
Sec. 323. Excluding employee benefit plan participant contributions and 
              other property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy 
              professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

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

            Subtitle B--Small Business Bankruptcy Provisions

Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment 
              of trustee.
Sec. 443. Study of operation of title 11, United States Code, with 
              respect to small businesses.
Sec. 444. Payment of interest.
Sec. 445. Priority for administrative expenses.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

                       TITLE VI--BANKRUPTCY DATA

Sec. 601. Improved bankruptcy statistics.
Sec. 602. Uniform rules for the collection of bankruptcy data.
Sec. 603. Audit procedures.

[[Page 2560]]

Sec. 604. Sense of Congress regarding availability of bankruptcy data.

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

Sec. 701. Treatment of certain liens.
Sec. 702. Treatment of fuel tax claims.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Priority of tax claims.
Sec. 706. Priority property taxes incurred.
Sec. 707. No discharge of fraudulent taxes in chapter 13.
Sec. 708. No discharge of fraudulent taxes in chapter 11.
Sec. 709. Stay of tax proceedings limited to prepetition taxes.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
Sec. 719. Special provisions related to the treatment of State and 
              local taxes.
Sec. 720. Dismissal for failure to timely file tax returns.

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Other amendments to titles 11 and 28, United States Code.

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

Sec. 901. Treatment of certain agreements by conservators or receivers 
              of insured depository institutions.
Sec. 902. Authority of the corporation with respect to failed and 
              failing institutions.
Sec. 903. Amendments relating to transfers of qualified financial 
              contracts.
Sec. 904. Amendments relating to disaffirmance or repudiation of 
              qualified financial contracts.
Sec. 905. Clarifying amendment relating to master agreements.
Sec. 906. Federal Deposit Insurance Corporation Improvement Act of 
              1991.
Sec. 907. Bankruptcy Code amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.
Sec. 912. Asset-backed securitizations.
Sec. 913. Effective date; application of amendments.

                 TITLE X--PROTECTION OF FAMILY FARMERS

Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. 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 and other administrative expenses.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Exclusion from program participation not subject to 
              automatic stay.

                    TITLE XII--TECHNICAL AMENDMENTS

Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare 
              bankruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Effect of conversion.
Sec. 1208. Allowance of administrative expenses.
Sec. 1209. Exceptions to discharge.
Sec. 1210. Effect of discharge.
Sec. 1211. Protection against discriminatory treatment.
Sec. 1212. Property of the estate.
Sec. 1213. Preferences.
Sec. 1214. Postpetition transactions.
Sec. 1215. Disposition of property of the estate.
Sec. 1216. General provisions.
Sec. 1217. Abandonment of railroad line.
Sec. 1218. Contents of plan.
Sec. 1219. Discharge under chapter 12.
Sec. 1220. Bankruptcy cases and proceedings.
Sec. 1221. Knowing disregard of bankruptcy law or rule.
Sec. 1222. Transfers made by nonprofit charitable corporations.
Sec. 1223. Protection of valid purchase money security interests.
Sec. 1224. Bankruptcy judgeships.
Sec. 1225. Compensating trustees.
Sec. 1226. Amendment to section 362 of title 11, United States Code.
Sec. 1227. Judicial education.
Sec. 1228. Reclamation.
Sec. 1229. Providing requested tax documents to the court.
Sec. 1230. Encouraging creditworthiness.
Sec. 1231. Property no longer subject to redemption.
Sec. 1232. Trustees.
Sec. 1233. Bankruptcy forms.
Sec. 1234. Expedited appeals of bankruptcy cases to courts of appeals.
Sec. 1235. Exemptions.

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a 
              dwelling.
Sec. 1303. Disclosures related to ``introductory rates''.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance 
              charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent 
              students.
Sec. 1309. Clarification of clear and conspicuous.
Sec. 1310. Enforcement of certain foreign judgments barred.

      TITLE XIV--GENERAL 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 11 or 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 of'' 
     and inserting ``trustee, bankruptcy administrator, or'';
       (II) by inserting ``, or, with the debtor's consent, 
     convert such a case to a case under chapter 11 or 13 of this 
     title,'' after ``consumer debts''; and
       (III) by striking ``a substantial abuse'' and inserting 
     ``an abuse''; and

       (ii) by striking the next to last sentence; and
       (C) by adding at the end the following:
       ``(2)(A)(i) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter, the court shall presume abuse exists if the 
     debtor's current monthly income reduced by the amounts 
     determined under clauses (ii), (iii), and (iv), and 
     multiplied by 60 is not less than the lesser of--
       ``(I) 25 percent of the debtor's nonpriority unsecured 
     claims in the case, or $6,000, whichever is greater; or
       ``(II) $10,000.
       ``(ii)(I) The debtor's monthly expenses shall be the 
     debtor's applicable monthly expense amounts specified under 
     the National Standards and Local Standards, and the debtor's 
     actual monthly expenses for the categories specified as Other 
     Necessary Expenses issued by the Internal Revenue Service for 
     the area in which the debtor resides, as in effect on the 
     date of the 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. 
     Notwithstanding any other provision of this clause, the 
     monthly expenses of the debtor shall not include any payments 
     for debts. In addition, the debtor's monthly expenses shall 
     include the debtor's reasonably necessary expenses incurred 
     to maintain the safety of the debtor and the family of the 
     debtor from family violence as identified under section 309 
     of the Family Violence Prevention and Services Act (42 U.S.C. 
     10408), or other applicable Federal law. The expenses 
     included in the debtor's monthly expenses described in the 
     preceding sentence shall be kept confidential by the court. 
     In addition, if it is demonstrated that it is reasonable and 
     necessary, the debtor's monthly expenses may also include an 
     additional allowance for food and clothing of up to 5 percent 
     of the food and clothing categories as specified by the 
     National Standards issued by the Internal Revenue Service.
       ``(II) In addition, the debtor's monthly expenses may 
     include, if applicable, the continuation of actual expenses 
     paid by the debtor that are reasonable and necessary for care 
     and support of an elderly, chronically ill, or disabled 
     household member or member of the debtor's immediate family 
     (including parents, grandparents, and siblings of the debtor, 
     the dependents of the debtor, and the spouse of the debtor in 
     a joint case) who is not a dependent and who is unable to pay 
     for such reasonable and necessary expenses.
       ``(III) In addition, for a debtor eligible for chapter 13, 
     the debtor's monthly expenses

[[Page 2561]]

     may include the actual administrative expenses of 
     administering a chapter 13 plan for the district in which the 
     debtor resides, up to an amount of 10 percent of the 
     projected plan payments, as determined under schedules issued 
     by the Executive Office for United States Trustees.
       ``(IV) In addition, the debtor's monthly expenses may 
     include the actual expenses for each dependent child under 
     the age of 18 years up to $1,500 per year per child to attend 
     a private elementary or secondary school, if the debtor 
     provides documentation of such expenses and a detailed 
     explanation of why such expenses are reasonable and 
     necessary.
       ``(iii) The debtor's average monthly payments on account of 
     secured debts shall be calculated as--
       ``(I) the sum of--
       ``(aa) the total of all amounts scheduled as contractually 
     due to secured creditors in each month of the 60 months 
     following the date of the petition; and
       ``(bb) any additional payments to secured creditors 
     necessary for the debtor, in filing a plan under chapter 13 
     of this title, to maintain possession of the debtor's primary 
     residence, motor vehicle, or other property necessary for the 
     support of the debtor and the debtor's dependents, that 
     serves as collateral for secured debts; divided by
       ``(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 only be rebutted by 
     demonstrating special circumstances that justify additional 
     expenses or adjustments of current monthly income for which 
     there is no reasonable alternative.
       ``(ii) In order to establish special circumstances, the 
     debtor shall be required to--
       ``(I) itemize each additional expense or adjustment of 
     income; and
       ``(II) provide--
       ``(aa) documentation for such expense or adjustment to 
     income; and
       ``(bb) a detailed explanation of the special circumstances 
     that make such expenses or adjustment to income necessary and 
     reasonable.
       ``(iii) The debtor shall attest under oath to the accuracy 
     of any information provided to demonstrate that additional 
     expenses or adjustments to income are required.
       ``(iv) The presumption of abuse may only be rebutted if the 
     additional expenses or adjustments to income referred to in 
     clause (i) cause the product of the debtor's current monthly 
     income reduced by the amounts determined under clauses (ii), 
     (iii), and (iv) of subparagraph (A) when multiplied by 60 to 
     be less than the lesser of--
       ``(I) 25 percent of the debtor's nonpriority unsecured 
     claims, or $6,000, whichever is greater; or
       ``(II) $10,000.
       ``(C) As part of the schedule of current income and 
     expenditures required under section 521, the debtor shall 
     include a statement of the debtor's current monthly income, 
     and the calculations that determine whether a presumption 
     arises under subparagraph (A)(i), that shows how each such 
     amount is calculated.
       ``(3) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter in a case in which the presumption in 
     subparagraph (A)(i) of such paragraph does not apply or has 
     been rebutted, the court shall consider--
       ``(A) whether the debtor filed the petition in bad faith; 
     or
       ``(B) the totality of the circumstances (including whether 
     the debtor seeks to reject a personal services contract and 
     the financial need for such rejection as sought by the 
     debtor) of the debtor's financial situation demonstrates 
     abuse.
       ``(4)(A) The court shall order the counsel for the debtor 
     to reimburse the trustee for all reasonable costs in 
     prosecuting a motion brought under section 707(b), including 
     reasonable attorneys' fees, if--
       ``(i) a trustee appointed under section 586(a)(1) of title 
     28 or from a panel of private trustees maintained by the 
     bankruptcy administrator 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 violated rule 9011 of the 
     Federal Rules of Bankruptcy Procedure.
       ``(B) If the court finds that the attorney for the debtor 
     violated rule 9011 of the Federal Rules of Bankruptcy 
     Procedure, 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 trustee, the 
     United States trustee, or the bankruptcy administrator.
       ``(C) In the case of a petition, pleading, or written 
     motion, the signature of an attorney shall constitute a 
     certification that the attorney has--
       ``(i) performed a reasonable investigation into the 
     circumstances that gave rise to the petition, pleading, or 
     written motion; and
       ``(ii) determined that the petition, pleading, or written 
     motion--
       ``(I) is well grounded in fact; and
       ``(II) is warranted by existing law or a good faith 
     argument for the extension, modification, or reversal of 
     existing law and does not constitute an abuse under paragraph 
     (1).
       ``(D) The signature of an attorney on the petition shall 
     constitute a certification that the attorney has no knowledge 
     after an inquiry that the information in the schedules filed 
     with such petition is incorrect.
       ``(5)(A) Except as provided in subparagraph (B) and subject 
     to paragraph (6), the court may award a debtor all reasonable 
     costs (including reasonable attorneys' fees) in contesting a 
     motion brought by a party in interest (other than a trustee, 
     United States trustee, or bankruptcy administrator) under 
     this subsection if--
       ``(i) the court does not grant the motion; and
       ``(ii) the court finds that--
       ``(I) the position of the party that brought the motion 
     violated rule 9011 of the Federal Rules of Bankruptcy 
     Procedure; 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 small business that has a claim of an aggregate 
     amount less than $1,000 shall not be subject to subparagraph 
     (A)(ii)(I).
       ``(C) For purposes of this paragraph--
       ``(i) the term `small business' means an unincorporated 
     business, partnership, corporation, association, or 
     organization that--
       ``(I) has less than 25 full-time employees as determined on 
     the date the motion is filed; and
       ``(II) is engaged in commercial or business activity; and
       ``(ii) the number of employees of a wholly owned subsidiary 
     of a corporation includes the employees of--
       ``(I) a parent corporation; and
       ``(II) any other subsidiary corporation of the parent 
     corporation.
       ``(6) Only the judge, United States trustee, or bankruptcy 
     administrator may bring a motion under section 707(b), if the 
     current monthly income of the debtor, or in a joint case, the 
     debtor and the debtor's spouse, as of the date of the order 
     for relief, when multiplied by 12, is equal to or less than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 earner 
     last reported by the Bureau of the Census;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals last 
     reported by the Bureau of the Census, plus $525 per month for 
     each individual in excess of 4.
       ``(7) No judge, United States trustee, panel trustee, 
     bankruptcy administrator or other party in interest may bring 
     a motion under paragraph (2), if the current monthly income 
     of the debtor and the debtor's spouse combined, as of the 
     date of the order for relief when multiplied by 12, is equal 
     to or less than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 earner 
     last reported by the Bureau of the Census;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals last 
     reported by the Bureau of the Census, plus $525 per month for 
     each individual in excess of 4.''.
       (b) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (10) the 
     following:
       ``(10A) `current monthly income'--
       ``(A) means the average monthly income from all sources 
     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 6-month 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), but excludes 
     benefits received under the Social Security Act and payments 
     to victims of war crimes or crimes against humanity on 
     account of their status as victims of such crimes;''.
       (c) United States Trustee and Bankruptcy Administrator 
     Duties.--Section 704 of title 11, United States Code, is 
     amended--
       (1) by inserting ``(a)'' before ``The trustee shall--''; 
     and
       (2) by adding at the end the following:
       ``(b)(1) With respect to an individual debtor under this 
     chapter--

[[Page 2562]]

       ``(A) the United States trustee or bankruptcy administrator 
     shall review all materials filed by the debtor and, not later 
     than 10 days after the date of the first meeting of 
     creditors, file with the court a statement as to whether the 
     debtor's case would be presumed to be an abuse under section 
     707(b); and
       ``(B) not later than 5 days after receiving a statement 
     under subparagraph (A), the court shall provide a copy of the 
     statement to all creditors.
       ``(2) The United States trustee or bankruptcy administrator 
     shall, not later than 30 days after the date of filing a 
     statement under paragraph (1), either file a motion to 
     dismiss or convert under section 707(b) or file a statement 
     setting forth the reasons the United States trustee or 
     bankruptcy administrator does not believe that such a motion 
     would be appropriate, if 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) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 earner 
     last reported by the Bureau of the Census; or
       ``(B) in the case of a debtor in a household of 2 or more 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census.
       ``(3) In any case in which a motion to dismiss or convert, 
     or a statement is required to be filed by this subsection, 
     the United States trustee or bankruptcy administrator may 
     decline to file a motion to dismiss or convert pursuant to 
     section 704(b)(2) if the product of the debtor's current 
     monthly income multiplied by 12 exceeds 100 percent, but does 
     not exceed 150 percent of--
       ``(A)(i) in the case of a debtor in a household of 1 
     person, the median family income of the applicable State for 
     1 earner last reported by the Bureau of the Census; or
       ``(ii) in the case of a debtor in a household of 2 or more 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census; and
       ``(B) the product of the debtor's current monthly income, 
     reduced by the amounts determined under section 
     707(b)(2)(A)(ii) (except for the amount calculated under the 
     other necessary expenses standard issued by the Internal 
     Revenue Service) and clauses (iii) and (iv) of section 
     707(b)(2)(A), multiplied by 60 is less than the lesser of--
       ``(i) 25 percent of the debtor's nonpriority unsecured 
     claims in the case or $6,000, whichever is greater; or
       ``(ii) $10,000.''.
       (d) Notice.--Section 342 of title 11, United States Code, 
     is amended by adding at the end the following:
       ``(d) In an individual case under chapter 7 in which the 
     presumption of abuse is triggered under section 707(b), the 
     clerk shall give written notice to all creditors not later 
     than 10 days after the date of the filing of the petition 
     that the presumption of abuse has been triggered.''.
       (e) Nonlimitation of Information.--Nothing in this title 
     shall limit the ability of a creditor to provide information 
     to a judge (except for information communicated ex parte, 
     unless otherwise permitted by applicable law), United States 
     trustee, bankruptcy administrator or trustee.
       (f) Dismissal for Certain Crimes.--Section 707 of title 11, 
     United States Code, as amended by this section, is amended by 
     adding at the end the following:
       ``(c)(1) In this subsection--
       ``(A) the term `crime of violence' has the meaning given 
     that term in section 16 of title 18; and
       ``(B) the term `drug trafficking crime' has the meaning 
     given that term in section 924(c)(2) of title 18.
       ``(2) Except as provided in paragraph (3), after notice and 
     a hearing, the court, on a motion by the victim of a crime of 
     violence or a drug trafficking crime, may when it is in the 
     best interest of the victims dismiss a voluntary case filed 
     by an individual debtor under this chapter if that individual 
     was convicted of that crime.
       ``(3) The court may not dismiss a case under paragraph (2) 
     if the debtor establishes by a preponderance of the evidence 
     that the filing of a case under this chapter is necessary to 
     satisfy a claim for a domestic support obligation.''.
       (g) Confirmation of Plan.--Section 1325(a) of title 11, 
     United States Code, is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period and inserting 
     a semicolon; and
       (3) by adding at the end the following:
       ``(7) the action of the debtor in filing the petition was 
     in good faith;''.
       (h) Applicability of Means Test to Chapter 13.--Section 
     1325(b) of title 11, United States Code, is amended--
       (1) in paragraph (1)(B), by inserting ``to unsecured 
     creditors'' after ``to make payments''; and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) For purposes of this subsection, the term `disposable 
     income' means current monthly income received by the debtor 
     (other than child support payments, foster care payments, or 
     disability payments for a dependent child made in accordance 
     with applicable nonbankruptcy law to the extent reasonably 
     necessary to be expended for such child) less amounts 
     reasonably necessary to be expended--
       ``(A) for the maintenance or support of the debtor or a 
     dependent of the debtor or for a domestic support obligation 
     that first becomes payable after the date the petition is 
     filed and for charitable contributions (that meet the 
     definition of `charitable contribution' under section 
     548(d)(3) to a qualified religious or charitable entity or 
     organization (as that term is defined in section 548(d)(4)) 
     in an amount not to exceed 15 percent of gross income of the 
     debtor for the year in which the contributions are made; and
       ``(B) if the debtor is engaged in business, for the payment 
     of expenditures necessary for the continuation, preservation, 
     and operation of such business.
       ``(3) Amounts reasonably necessary to be expended under 
     paragraph (2) shall be determined in accordance with 
     subparagraphs (A) and (B) of section 707(b)(2), if the debtor 
     has current monthly income, when multiplied by 12, greater 
     than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 earner 
     last reported by the Bureau of the Census;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals last 
     reported by the Bureau of the Census, plus $525 per month for 
     each individual in excess of 4.''.
       (i) Clerical Amendment.--The table of sections for chapter 
     7 of title 11, United States Code, is amended by striking the 
     item relating to section 707 and inserting the following:

``707. Dismissal of a case or conversion to a case under chapter 11 or 
              13.''.

     SEC. 103. SENSE OF CONGRESS AND STUDY.

       (a) Sense of Congress.--It is the sense of Congress that 
     the Secretary of the Treasury has the authority to alter the 
     Internal Revenue Service standards established to set 
     guidelines for repayment plans as needed to accommodate their 
     use under section 707(b) of title 11, United States Code.
       (b) Study.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act, the Director of the Executive Office 
     for United States Trustees shall submit a report to the 
     Committee on the Judiciary of the Senate and the Committee on 
     the Judiciary of the House of Representatives containing the 
     findings of the Director regarding the utilization of 
     Internal Revenue Service standards for determining--
       (A) the current monthly expenses of a debtor under section 
     707(b) of title 11, United States Code; and
       (B) the impact that the application of such standards has 
     had on debtors and on the bankruptcy courts.
       (2) Recommendation.--The report under paragraph (1) may 
     include recommendations for amendments to title 11, United 
     States Code, that are consistent with the findings of the 
     Director under paragraph (1).

     SEC. 104. NOTICE OF ALTERNATIVES.

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

     SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

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

[[Page 2563]]

       (b) Test.--
       (1) Selection of districts.--The Director shall select 6 
     judicial districts of the United States in which to test the 
     effectiveness of the financial management training curriculum 
     and materials developed under subsection (a).
       (2) Use.--For an 18-month period beginning not later than 
     270 days after the date of enactment of this Act, such 
     curriculum and materials shall be, for the 6 judicial 
     districts selected under paragraph (1), used as the 
     instructional course concerning personal financial management 
     for purposes of section 111 of title 11, United States Code.
       (c) Evaluation.--
       (1) In general.--During the 18-month period referred to in 
     subsection (b), the Director shall evaluate the effectiveness 
     of--
       (A) the financial management training curriculum and 
     materials developed under subsection (a); and
       (B) a sample of existing consumer education programs such 
     as those described in the Report of the National Bankruptcy 
     Review Commission (October 20, 1997) that are representative 
     of consumer education programs carried out by the credit 
     industry, by trustees serving under chapter 13 of title 11, 
     United States Code, and by consumer counseling groups.
       (2) Report.--Not later than 3 months after concluding such 
     evaluation, the Director shall submit a report to the Speaker 
     of the House of Representatives and the President pro tempore 
     of the Senate, for referral to the appropriate committees of 
     the Congress, containing the findings of the Director 
     regarding the effectiveness of such curriculum, such 
     materials, and such programs and their costs.

     SEC. 106. CREDIT COUNSELING.

       (a) Who May Be a Debtor.--Section 109 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(h)(1) Subject to paragraphs (2) and (3), and 
     notwithstanding any other provision of this section, an 
     individual may not be a debtor under this title unless that 
     individual has, during the 180-day period preceding the date 
     of filing of the petition of that individual, received from 
     an approved nonprofit budget and credit counseling agency 
     described in section 111(a) an individual or group briefing 
     (including a briefing conducted by telephone or on the 
     Internet) that outlined the opportunities for available 
     credit counseling and assisted 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 
     budget and credit counseling agencies for that district are 
     not reasonably able to provide adequate services to the 
     additional individuals who would otherwise seek credit 
     counseling from that agency 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. Notwithstanding 
     the preceding sentence, a nonprofit budget and credit 
     counseling service may be disapproved by the United States 
     trustee or bankruptcy administrator at any time.
       ``(3)(A) Subject to subparagraph (B), the requirements of 
     paragraph (1) shall not apply with respect to a debtor who 
     submits to the court a certification that--
       ``(i) describes exigent circumstances that merit a waiver 
     of the requirements of paragraph (1);
       ``(ii) states that the debtor requested credit counseling 
     services from an approved nonprofit budget and credit 
     counseling agency, but was unable to obtain the services 
     referred to in paragraph (1) during the 5-day period 
     beginning on the date on which the debtor made that request; 
     and
       ``(iii) is satisfactory to the court.
       ``(B) With respect to a debtor, an exemption under 
     subparagraph (A) shall cease to apply to that debtor on the 
     date on which the debtor meets the requirements of paragraph 
     (1), but in no case may the exemption apply to that debtor 
     after the date that is 30 days after the debtor files a 
     petition, except that the court, for cause, may order an 
     additional 15 days.''.
       (b) Chapter 7 Discharge.--Section 727(a) of title 11, 
     United States Code, is amended--
       (1) in paragraph (9), by striking ``or'' at the end;
       (2) in paragraph (10), by striking the period and inserting 
     ``; or''; and
       (3) by adding at the end the following:
       ``(11) after the filing of the petition, the debtor failed 
     to complete an instructional course concerning personal 
     financial management described in section 111.
       ``(12)(A) Paragraph (11) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee or bankruptcy administrator of that district 
     determines that the approved instructional courses are not 
     adequate to service the additional individuals required to 
     complete such instructional courses under this section.
       ``(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.''.
       (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 approved nonprofit budget and 
     credit counseling agency that provided the debtor services 
     under section 109(h) describing the services provided to the 
     debtor; and
       ``(2) a copy of the debt repayment plan, if any, developed 
     under section 109(h) through the approved nonprofit budget 
     and credit counseling agency referred to in paragraph (1).''.
       (e) General Provisions.--
       (1) In general.--Chapter 1 of title 11, United States Code, 
     is amended by adding at the end the following:

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

       ``(a) The clerk of each district shall maintain a publicly 
     available list of--
       ``(1) credit counseling agencies that provide 1 or more 
     programs described in section 109(h) currently approved by 
     the United States trustee or the bankruptcy administrator for 
     the district, as applicable; and
       ``(2) instructional courses concerning personal financial 
     management currently approved by the United States trustee or 
     the bankruptcy administrator for the district, as applicable.
       ``(b) The United States trustee or bankruptcy administrator 
     shall only approve a credit counseling agency or 
     instructional course concerning personal financial management 
     as follows:
       ``(1) The United States trustee or bankruptcy administrator 
     shall have thoroughly reviewed the qualifications of the 
     credit counseling agency or of the provider of the 
     instructional course under the standards set forth in this 
     section, and the programs or instructional courses which will 
     be offered by such agency or provider, and may require an 
     agency or provider of an instructional course which has 
     sought approval to provide information with respect to such 
     review.
       ``(2) The United States trustee or bankruptcy administrator 
     shall have determined that the credit counseling agency or 
     course of instruction fully satisfies the applicable 
     standards set forth in this section.
       ``(3) When an agency or course of instruction is initially 
     approved, such approval shall be for a probationary period 
     not to exceed 6 months. An agency or course of instruction is 
     initially approved if it did not appear on the approved list 
     for the district under subsection (a) immediately prior to 
     approval.
       ``(4) At the conclusion of the probationary period under 
     paragraph (3), the United States trustee or bankruptcy 
     administrator may only approve for an additional 1-year 
     period, and for successive 1-year periods thereafter, any 
     agency or course of instruction which has demonstrated during 
     the probationary or subsequent period that such agency or 
     course of instruction--
       ``(A) has met the standards set forth under this section 
     during such period; and
       ``(B) can satisfy such standards in the future.
       ``(5) Not later than 30 days after any final decision under 
     paragraph (4), that occurs either after the expiration of the 
     initial probationary period, or after any 2-year period 
     thereafter, an interested person may seek judicial review of 
     such decision in the appropriate United States District 
     Court.
       ``(c)(1) The United States trustee or bankruptcy 
     administrator shall only approve a credit counseling agency 
     that demonstrates that it will provide qualified counselors, 
     maintain adequate provision for safekeeping and payment of 
     client funds, provide adequate counseling with respect to 
     client credit problems, and deal responsibly and effectively 
     with other matters as relate to the

[[Page 2564]]

     quality, effectiveness, and financial security of such 
     programs.



       ``(2) To be approved by the United States trustee or 
     bankruptcy administrator, a credit counseling agency shall, 
     at a minimum--
       ``(A) be a nonprofit budget and credit counseling agency, 
     the majority of the board of directors of which--
       ``(i) are not employed by the agency; and
       ``(ii) will not directly or indirectly benefit financially 
     from the outcome of a credit counseling session;
       ``(B) if a fee is charged for counseling services, charge a 
     reasonable fee, and provide services without regard to 
     ability to pay the fee;
       ``(C) provide for safekeeping and payment of client funds, 
     including an annual audit of the trust accounts and 
     appropriate employee bonding;
       ``(D) provide full disclosures to clients, including 
     funding sources, counselor qualifications, possible impact on 
     credit reports, and any costs of such program that will be 
     paid by the debtor and how such costs will be paid;
       ``(E) provide adequate counseling with respect to client 
     credit problems that includes an analysis of their current 
     situation, what brought them to that financial status, and 
     how they can develop a plan to handle the problem without 
     incurring negative amortization of their debts;
       ``(F) provide trained counselors who receive no commissions 
     or bonuses based on the counseling session outcome, and who 
     have adequate experience, and have been adequately trained to 
     provide counseling services to individuals in financial 
     difficulty, including the matters described in subparagraph 
     (E);
       ``(G) demonstrate adequate experience and background in 
     providing credit counseling; and
       ``(H) have adequate financial resources to provide 
     continuing support services for budgeting plans over the life 
     of any repayment plan.
       ``(d) The United States trustee or bankruptcy administrator 
     shall only approve an instructional course concerning 
     personal financial management--
       ``(1) for an initial probationary period under subsection 
     (b)(3) if the course will provide at a minimum--
       ``(A) trained personnel with adequate experience and 
     training in providing effective instruction and services;
       ``(B) learning materials and teaching methodologies 
     designed to assist debtors in understanding personal 
     financial management and that are consistent with stated 
     objectives directly related to the goals of such course of 
     instruction;
       ``(C) adequate facilities situated in reasonably convenient 
     locations at which such course of instruction is offered, 
     except that such facilities may include the provision of such 
     course of instruction or program by telephone or through the 
     Internet, if the course of instruction or program is 
     effective; and
       ``(D) the preparation and retention of reasonable records 
     (which shall include the debtor's bankruptcy case number) to 
     permit evaluation of the effectiveness of such course of 
     instruction or program, including any evaluation of 
     satisfaction of course of instruction or program requirements 
     for each debtor attending such course of instruction or 
     program, which shall be available for inspection and 
     evaluation by the Executive Office for United States 
     Trustees, the United States trustee, bankruptcy 
     administrator, or chief bankruptcy judge for the district in 
     which such course of instruction or program is offered; and
       ``(2) for any 1-year period if the provider thereof has 
     demonstrated that the course meets the standards of paragraph 
     (1) and, in addition--
       ``(A) has been effective in assisting a substantial number 
     of debtors to understand personal financial management; and
       ``(B) is otherwise likely to increase substantially debtor 
     understanding of personal financial management.
       ``(e) The District Court may, at any time, investigate the 
     qualifications of a credit counseling agency referred to in 
     subsection (a), and request production of documents to ensure 
     the integrity and effectiveness of such credit counseling 
     agencies. The District Court may, at any time, remove from 
     the approved list under subsection (a) a credit counseling 
     agency upon finding such agency does not meet the 
     qualifications of subsection (b).
       ``(f) The United States trustee or bankruptcy administrator 
     shall notify the clerk that a credit counseling agency or an 
     instructional course is no longer approved, in which case the 
     clerk shall remove it from the list maintained under 
     subsection (a).
       ``(g)(1) No credit counseling service may provide to a 
     credit reporting agency information concerning whether an 
     individual debtor has received or sought instruction 
     concerning personal financial management from the credit 
     counseling service.
       ``(2) A credit counseling service that willfully or 
     negligently fails to comply with any requirement under this 
     title with respect to a debtor shall be liable for damages in 
     an amount equal to the sum of--
       ``(A) any actual damages sustained by the debtor as a 
     result of the violation; and
       ``(B) any court costs or reasonable attorneys' fees (as 
     determined by the court) incurred in an action to recover 
     those damages.''.
       (2) Clerical amendment.--The table of sections for chapter 
     1 of title 11, United States Code, is amended by adding at 
     the end the following:

``111. 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 is 
     dismissed due to the creation of a debt repayment plan, for 
     purposes of subsection (c)(3), any subsequent case commenced 
     by the debtor under any such chapter shall not be presumed to 
     be filed not in good faith.
       ``(j) On request of a party in interest, the court shall 
     issue an order under subsection (c) confirming that the 
     automatic stay has been terminated.''.

     SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY EXPENSES.

       For purposes of section 707(b) of title 11, United States 
     Code, as amended by this Act, the Director of the Executive 
     Office for United States Trustees shall, not later than 180 
     days after the date of enactment of this Act, issue schedules 
     of reasonable and necessary administrative expenses of 
     administering a chapter 13 plan for each judicial district of 
     the United States.

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

     SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.

       (a) Reduction of Claim.--Section 502 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(k)(1) The court, on the motion of the debtor and after a 
     hearing, may reduce a claim filed under this section based in 
     whole on 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 
     described in section 111 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 
     prior to expiration of the 60-day period specified in 
     paragraph (1)(B)(i).''.
       (b) Limitation on Avoidability.--Section 547 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(h) The trustee may not avoid a transfer if such transfer 
     was made as a part of an alternative repayment 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), unless the plan is dismissed, in default, or the 
     creditor has not received payments required to be made under 
     the plan in the manner required by the plan (including 
     crediting the amounts required under the plan), shall 
     constitute a violation of an injunction under subsection 
     (a)(2) if the act of the creditor to collect and failure to 
     credit payments in the manner required by the plan caused 
     material injury to the debtor.
       ``(j) Subsection (a)(2) does not operate as an injunction 
     against an act by a creditor that is the holder of a secured 
     claim, if--
       ``(1) such creditor retains a security interest in real 
     property that is the principal residence of the debtor;
       ``(2) such act is in the ordinary course of business 
     between the creditor and the debtor; and
       ``(3) such act is limited to seeking or obtaining periodic 
     payments associated with a valid security interest in lieu of 
     pursuit of in rem relief to enforce the lien.''.

     SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION PRACTICES.

       (a) In General.--Section 524 of title 11, United States 
     Code, as amended by this Act, is amended--

[[Page 2565]]

       (1) in subsection (c), by striking paragraph (2) and 
     inserting the following:
       ``(2) the debtor received the disclosures described in 
     subsection (k) at or before the time at which the debtor 
     signed the agreement;'';
       (2) by adding at the end the following:
       ``(k)(1) The disclosures required under subsection (c)(2) 
     shall consist of the disclosure statement described in 
     paragraph (3), completed as required in that paragraph, 
     together with the agreement, statement, declaration, motion 
     and order described, respectively, in paragraphs (4) through 
     (8), and shall be the only disclosures required in connection 
     with the reaffirmation.
       ``(2) Disclosures made under paragraph (1) shall be made 
     clearly and conspicuously and in writing. The terms `Amount 
     Reaffirmed' and `Annual Percentage Rate' shall be disclosed 
     more conspicuously than other terms, data or information 
     provided in connection with this disclosure, except that the 
     phrases `Before agreeing to reaffirm a debt, review these 
     important disclosures' and `Summary of Reaffirmation 
     Agreement' may be equally conspicuous. Disclosures may be 
     made in a different order and may use terminology different 
     from that set forth in paragraphs (2) through (8), except 
     that the terms `Amount Reaffirmed' and `Annual Percentage 
     Rate' must be used where indicated.
       ``(3) The disclosure statement required under this 
     paragraph shall consist of the following:
       ``(A) The statement: `Part A: Before agreeing to reaffirm a 
     debt, review these important disclosures:';
       ``(B) Under the heading `Summary of Reaffirmation 
     Agreement', the statement: `This Summary is made pursuant to 
     the requirements of the Bankruptcy Code';
       ``(C) The `Amount Reaffirmed', using that term, which shall 
     be--
       ``(i) the total amount which the debtor agrees to reaffirm, 
     and
       ``(ii) the total of any other fees or cost accrued as of 
     the date of the disclosure statement.
       ``(D) In conjunction with the disclosure of the `Amount 
     Reaffirmed', the statements--
       ``(i) `The amount of debt you have agreed to reaffirm'; and
       ``(ii) `Your credit agreement may obligate you to pay 
     additional amounts which may come due after the date of this 
     disclosure. Consult your credit agreement.'.
       ``(E) The `Annual Percentage Rate', using that term, which 
     shall be disclosed as--
       ``(i) if, at the time the petition is filed, the debt is 
     open end credit as defined under the Truth in Lending Act (15 
     U.S.C. 1601 et seq.), then--
       ``(I) the annual percentage rate determined under 
     paragraphs (5) and (6) of section 127(b) of the Truth in 
     Lending Act (15 U.S.C. 1637(b)(5) and (6)), as applicable, as 
     disclosed to the debtor in the most recent periodic statement 
     prior to the agreement or, if no such periodic statement has 
     been provided the debtor during the prior 6 months, the 
     annual percentage rate as it would have been so disclosed at 
     the time the disclosure statement is given the debtor, or to 
     the extent this annual percentage rate is not readily 
     available or not applicable, then
       ``(II) the simple interest rate applicable to the amount 
     reaffirmed as of the date the disclosure statement is given 
     to the debtor, or if different simple interest rates apply to 
     different balances, the simple interest rate applicable to 
     each such balance, identifying the amount of each such 
     balance included in the amount reaffirmed, or
       ``(III) if the entity making the disclosure elects, to 
     disclose the annual percentage rate under subclause (I) and 
     the simple interest rate under subclause (II);
       ``(ii) if, at the time the petition is filed, the debt is 
     closed end credit as defined under the Truth in Lending Act 
     (15 U.S.C. 1601 et seq.), then--
       ``(I) the annual percentage rate under section 128(a)(4) of 
     the Truth in Lending Act (15 U.S.C. 1638(a)(4)), as disclosed 
     to the debtor in the most recent disclosure statement given 
     the debtor prior to the reaffirmation agreement with respect 
     to the debt, or, if no such disclosure statement was provided 
     the debtor, the annual percentage rate as it would have been 
     so disclosed at the time the disclosure statement is given 
     the debtor, or to the extent this annual percentage rate is 
     not readily available or not applicable, then
       ``(II) the simple interest rate applicable to the amount 
     reaffirmed as of the date the disclosure statement is given 
     the debtor, or if different simple interest rates apply to 
     different balances, the simple interest rate applicable to 
     each such balance, identifying the amount of such balance 
     included in the amount reaffirmed, or
       ``(III) if the entity making the disclosure elects, to 
     disclose the annual percentage rate under (I) and the simple 
     interest rate under (II).
       ``(F) If the underlying debt transaction was disclosed as a 
     variable rate transaction on the most recent disclosure given 
     under the Truth in Lending Act (15 U.S.C. 1601 et seq.), by 
     stating `The interest rate on your loan may be a variable 
     interest rate which changes from time to time, so that the 
     annual percentage rate disclosed here may be higher or 
     lower.'.
       ``(G) If the debt is secured by a security interest which 
     has not been waived in whole or in part or determined to be 
     void by a final order of the court at the time of the 
     disclosure, by disclosing that a security interest or lien in 
     goods or property is asserted over some or all of the 
     obligations you are reaffirming and listing the items and 
     their original purchase price that are subject to the 
     asserted security interest, or if not a purchase-money 
     security interest then listing by items or types and the 
     original amount of the loan.
       ``(H) At the election of the creditor, a statement of the 
     repayment schedule using 1 or a combination of the 
     following--
       ``(i) by making the statement: `Your first payment in the 
     amount of $___ is due on ___ but the future payment amount 
     may be different. Consult your reaffirmation or credit 
     agreement, as applicable.', and stating the amount of the 
     first payment and the due date of that payment in the places 
     provided;
       ``(ii) by making the statement: `Your payment schedule will 
     be:', and describing the repayment schedule with the number, 
     amount and due dates or period of payments scheduled to repay 
     the obligations reaffirmed to the extent then known by the 
     disclosing party; or
       ``(iii) by describing the debtor's repayment obligations 
     with reasonable specificity to the extent then known by the 
     disclosing party.
       ``(I) The following statement: `Note: When this disclosure 
     refers to what a creditor `may' do, it does not use the word 
     `may' to give the creditor specific permission. The word 
     `may' is used to tell you what might occur if the law permits 
     the creditor to take the action. If you have questions about 
     your reaffirmation or what the law requires, talk to the 
     attorney who helped you negotiate this agreement. If you 
     don't have an attorney helping you, the judge will explain 
     the effect of your reaffirmation when the reaffirmation 
     hearing is held.'.
       ``(J)(i) The following additional statements:
       `` `Reaffirming a debt is a serious financial decision. The 
     law requires you to take certain steps to make sure the 
     decision is in your best interest. If these steps are not 
     completed, the reaffirmation agreement is not effective, even 
     though you have signed it.
       `` `1. Read the disclosures in this Part A carefully. 
     Consider the decision to reaffirm carefully. Then, if you 
     want to reaffirm, sign the reaffirmation agreement in Part B 
     (or you may use a separate agreement you and your creditor 
     agree on).
       `` `2. Complete and sign Part D and be sure you can afford 
     to make the payments you are agreeing to make and have 
     received a copy of the disclosure statement and a completed 
     and signed reaffirmation agreement.
       `` `3. If you were represented by an attorney during the 
     negotiation of the reaffirmation agreement, the attorney must 
     have signed the certification in Part C.
       `` `4. If you were not represented by an attorney during 
     the negotiation of the reaffirmation agreement, you must have 
     completed and signed Part E.
       `` `5. The original of this disclosure must be filed with 
     the court by you or your creditor. If a separate 
     reaffirmation agreement (other than the one in Part B) has 
     been signed, it must be attached.
       `` `6. If you were represented by an attorney during the 
     negotiation of the reaffirmation agreement, your 
     reaffirmation agreement becomes effective upon filing with 
     the court unless the reaffirmation is presumed to be an undue 
     hardship as explained in Part D.
       `` `7. If you were not represented by an attorney during 
     the negotiation of the reaffirmation agreement, it will not 
     be effective unless the court approves it. The court will 
     notify you of the hearing on your reaffirmation agreement. 
     You must attend this hearing in bankruptcy court where the 
     judge will review your agreement. The bankruptcy court must 
     approve the agreement as consistent with your best interests, 
     except that no court approval is required if the agreement is 
     for a consumer debt secured by a mortgage, deed of trust, 
     security deed or other lien on your real property, like your 
     home.
       `` `Your right to rescind a reaffirmation. You may rescind 
     (cancel) your reaffirmation at any time before the bankruptcy 
     court enters a discharge order or within 60 days after the 
     agreement is filed with the court, whichever is longer. To 
     rescind or cancel, you must notify the creditor that the 
     agreement is canceled.
       `` `What are your obligations if you reaffirm the debt? A 
     reaffirmed debt remains your personal legal obligation. It is 
     not discharged in your bankruptcy. That means that if you 
     default on your reaffirmed debt after your bankruptcy is 
     over, your creditor may be able to take your property or your 
     wages. Otherwise, your obligations will be determined by the 
     reaffirmation agreement which may have changed the terms of 
     the original agreement. For example, if you are reaffirming 
     an open end credit agreement, the creditor may be permitted 
     by that agreement or applicable law to change the terms of 
     the agreement in the future under certain conditions.
       `` `Are you required to enter into a reaffirmation 
     agreement by any law? No, you are

[[Page 2566]]

     not required to reaffirm a debt by any law. Only agree to 
     reaffirm a debt if it is in your best interest. Be sure you 
     can afford the payments you agree to make.
       `` `What if your creditor has a security interest or lien? 
     Your bankruptcy discharge does not eliminate any lien on your 
     property. A ``lien'' is often referred to as a security 
     interest, deed of trust, mortgage or security deed. Even if 
     you do not reaffirm and your personal liability on the debt 
     is discharged, because of the lien your creditor may still 
     have the right to take the security property if you do not 
     pay the debt or default on it. If the lien is on an item of 
     personal property that is exempt under your State's law or 
     that the trustee has abandoned, you may be able to redeem the 
     item rather than reaffirm the debt. To redeem, you make a 
     single payment to the creditor equal to the current value of 
     the security property, as agreed by the parties or determined 
     by the court.'.
       ``(ii) In the case of a reaffirmation under subsection 
     (m)(2), numbered paragraph 6 in the disclosures required by 
     clause (i) of this subparagraph shall read as follows:
       `` `6. If you were represented by an attorney during the 
     negotiation of the reaffirmation agreement, your 
     reaffirmation agreement becomes effective upon filing with 
     the court.'.
       ``(4) The form of reaffirmation agreement required under 
     this paragraph shall consist of the following:
       `` `Part B: Reaffirmation Agreement. I/we agree to reaffirm 
     the obligations arising under the credit agreement described 
     below.
       `` `Brief description of credit agreement:
       `` `Description of any changes to the credit agreement made 
     as part of this reaffirmation agreement:
       `` `Signature:          Date:
       `` `Borrower:
       `` `Co-borrower, if also reaffirming:
       `` `Accepted by creditor:
       `` `Date of creditor acceptance:'.
       ``(5)(A) The declaration shall consist of the following:
       `` `Part C: Certification by Debtor's Attorney (If Any).
       `` `I hereby certify that (1) this agreement represents a 
     fully informed and voluntary agreement by the debtor(s); (2) 
     this agreement does not impose an undue hardship on the 
     debtor or any dependent of the debtor; and (3) I have fully 
     advised the debtor of the legal effect and consequences of 
     this agreement and any default under this agreement.
       `` `Signature of Debtor's Attorney:    Date:'.
       ``(B) In the case of reaffirmations in which a presumption 
     of undue hardship has been established, the certification 
     shall state that in the opinion of the attorney, the debtor 
     is able to make the payment.
       ``(C) In the case of a reaffirmation agreement under 
     subsection (m)(2), subparagraph (B) is not applicable.
       ``(6)(A) The statement in support of reaffirmation 
     agreement, which the debtor shall sign and date prior to 
     filing with the court, shall consist of the following:
       `` `Part D: Debtor's Statement in Support of Reaffirmation 
     Agreement.
       `` `1. I believe this agreement will not impose an undue 
     hardship on my dependents or me. I can afford to make the 
     payments on the reaffirmed debt because my monthly income 
     (take home pay plus any other income received) is $___, and 
     my actual current monthly expenses including monthly payments 
     on post-bankruptcy debt and other reaffirmation agreements 
     total $___, leaving $___ to make the required payments on 
     this reaffirmed debt. I understand that if my income less my 
     monthly expenses does not leave enough to make the payments, 
     this reaffirmation agreement is presumed to be an undue 
     hardship on me and must be reviewed by the court. However, 
     this presumption may be overcome if I explain to the 
     satisfaction of the court how I can afford to make the 
     payments here: ___.
       `` `2. I received a copy of the Reaffirmation Disclosure 
     Statement in Part A and a completed and signed reaffirmation 
     agreement.'.
       ``(B) Where the debtor is represented by counsel and is 
     reaffirming a debt owed to a creditor defined in section 
     19(b)(1)(A)(iv) of the Federal Reserve Act (12 U.S.C. 
     461(b)(1)(A)(iv)), the statement of support of the 
     reaffirmation agreement, which the debtor shall sign and date 
     prior to filing with the court, shall consist of the 
     following:
       `` `I believe this agreement is in my financial interest. I 
     can afford to make the payments on the reaffirmed debt. I 
     received a copy of the Reaffirmation Disclosure Statement in 
     Part A and a completed and signed reaffirmation agreement.'
       ``(7) The motion, which may be used if approval of the 
     agreement by the court is required in order for it to be 
     effective and shall be signed and dated by the moving party, 
     shall consist of the following:
       `` `Part E: Motion for Court Approval (To be completed only 
     where debtor is not represented by an attorney.). I (we), the 
     debtor, affirm the following to be true and correct:
       `` `I am not represented by an attorney in connection with 
     this reaffirmation agreement.
       `` `I believe this agreement is in my best interest based 
     on the income and expenses I have disclosed in my Statement 
     in Support of this reaffirmation agreement above, and because 
     (provide any additional relevant reasons the court should 
     consider):
       `` `Therefore, I ask the court for an order approving this 
     reaffirmation agreement.'.
       ``(8) The court order, which may be used to approve a 
     reaffirmation, shall consist of the following:
       `` `Court Order: The court grants the debtor's motion and 
     approves the reaffirmation agreement described above.'.
       ``(9) Subsection (a)(2) does not operate as an injunction 
     against an act by a creditor that is the holder of a secured 
     claim, if--
       ``(A) such creditor retains a security interest in real 
     property that is the debtor's principal residence;
       ``(B) such act is in the ordinary course of business 
     between the creditor and the debtor; and
       ``(C) such act is limited to seeking or obtaining periodic 
     payments associated with a valid security interest in lieu of 
     pursuit of in rem relief to enforce the lien.
       ``(l) Notwithstanding any other provision of this title:
       ``(1) A creditor may accept payments from a debtor before 
     and after the filing of a reaffirmation agreement with the 
     court.
       ``(2) A creditor may accept payments from a debtor under a 
     reaffirmation agreement which the creditor believes in good 
     faith to be effective.
       ``(3) The requirements of subsections (c)(2) and (k) shall 
     be satisfied if disclosures required under those subsections 
     are given in good faith.
       ``(m)(1) Until 60 days after a reaffirmation agreement is 
     filed with the court (or such additional period as the court, 
     after notice and hearing and for cause, orders before the 
     expiration of such period), it shall be presumed that the 
     reaffirmation agreement is an undue hardship on the debtor if 
     the debtor's monthly income less the debtor's monthly 
     expenses as shown on the debtor's completed and signed 
     statement in support of the reaffirmation agreement required 
     under subsection (k)(6)(A) is less than the scheduled 
     payments on the reaffirmed debt. This presumption shall be 
     reviewed by the court. The presumption may be rebutted in 
     writing by the debtor if the statement includes an 
     explanation which identifies additional sources of funds to 
     make the payments as agreed upon under the terms of the 
     reaffirmation agreement. If the presumption is not rebutted 
     to the satisfaction of the court, the court may disapprove 
     the agreement. No agreement shall be disapproved without 
     notice and hearing to the debtor and creditor and such 
     hearing shall be concluded before the entry of the debtor's 
     discharge.
       ``(2) This subsection does not apply to reaffirmation 
     agreements where the creditor is a credit union, as defined 
     in section 19(b)(1)(A)(iv) of the Federal Reserve Act (12 
     U.S.C. 461(b)(1)(A)(iv)).''.
       (b) Law Enforcement.--
       (1) In general.--Chapter 9 of title 18, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 158. Designation of United States attorneys and agents 
       of the Federal Bureau of Investigation to address abusive 
       reaffirmations of debt and materially fraudulent statements 
       in bankruptcy schedules

       ``(a) In General.--The Attorney General of the United 
     States shall designate the individuals described in 
     subsection (b) to have primary responsibility in carrying out 
     enforcement activities in addressing violations of section 
     152 or 157 relating to abusive reaffirmations of debt. In 
     addition to addressing the violations referred to in the 
     preceding sentence, the individuals described under 
     subsection (b) shall address violations of section 152 or 157 
     relating to materially fraudulent statements in bankruptcy 
     schedules that are intentionally false or intentionally 
     misleading.
       ``(b) United States 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, in addition to 
     any other responsibilities, have primary responsibility for 
     carrying out the duties of a United States attorney under 
     section 3057.
       ``(d) Bankruptcy Procedures.--The bankruptcy courts shall 
     establish procedures for referring any case which may contain 
     a materially fraudulent statement in a bankruptcy schedule to 
     the individuals designated under this section.''.
       (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 and materially fraudulent statements in 
              bankruptcy schedules.''.

[[Page 2567]]



                   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, including interest that accrues on that 
     debt as provided under applicable nonbankruptcy law 
     notwithstanding any other provision of this title, that is--
       ``(A) owed to or recoverable by--
       ``(i) a spouse, former spouse, or child of the debtor or 
     such child's parent, legal guardian, or responsible relative; 
     or
       ``(ii) a governmental unit;
       ``(B) in the nature of alimony, maintenance, or support 
     (including assistance provided by a governmental unit) of 
     such spouse, former spouse, or child of the debtor or such 
     child's parent, without regard to whether such debt is 
     expressly so designated;
       ``(C) established or subject to establishment before 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, legal guardian, or responsible 
     relative of the child for the purpose of collecting the 
     debt;''.

     SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT 
                   OBLIGATIONS.

       Section 507(a) of title 11, United States Code, is 
     amended--
       (1) by striking paragraph (7);
       (2) by redesignating paragraphs (1) through (6) as 
     paragraphs (2) through (7), respectively;
       (3) in paragraph (2), as 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--
       (A) by striking ``Third'' and inserting ``Fourth''; and
       (B) by striking the semicolon at the end and inserting a 
     period;
       (6) in paragraph (5), as 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:
       ``(A) Allowed unsecured claims for domestic support 
     obligations that, as of the date of the filing of the 
     petition, are owed to or recoverable by a spouse, former 
     spouse, or child of the debtor, or the parent, legal 
     guardian, or responsible relative of such child, without 
     regard to whether the claim is filed by such person or is 
     filed by a governmental unit on behalf of that person, on the 
     condition that funds received under this paragraph by a 
     governmental unit under this title after the date of filing 
     of the petition shall be applied and distributed in 
     accordance with applicable nonbankruptcy law.
       ``(B) Subject to claims under subparagraph (A), allowed 
     unsecured claims for domestic support obligations that, as of 
     the date the petition was filed are assigned by a spouse, 
     former spouse, child of the debtor, or such child's parent, 
     legal guardian, or responsible relative to a governmental 
     unit (unless such obligation is assigned voluntarily by the 
     spouse, former spouse, child, parent, legal guardian, or 
     responsible relative of the child for the purpose of 
     collecting the debt) or are owed directly to or recoverable 
     by a government unit under applicable nonbankruptcy law, on 
     the condition that funds received under this paragraph by a 
     governmental unit under this title after the date of filing 
     of the petition be applied and distributed in accordance with 
     applicable nonbankruptcy law.''.

     SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE 
                   IN CASES INVOLVING DOMESTIC SUPPORT 
                   OBLIGATIONS.

       Title 11, United States Code, is amended--
       (1) in section 1129(a), by adding at the end the following:
       ``(14) If the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order or statute for such obligation that first become 
     payable after the date on which the petition is filed.'';
       (2) in section 1208(c)--
       (A) in paragraph (8), by striking ``or'' at the end;
       (B) in paragraph (9), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(10) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date on which 
     the petition is filed.'';
       (3) in section 1222(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period, 
     beginning on the date that the first payment is due under the 
     plan, will be applied to make payments under the plan.'';
       (4) in section 1222(b)--
       (A) by redesignating paragraph (11) as paragraph (12); and
       (B) by inserting after paragraph (10) the following:
       ``(11) provide for the payment of interest accruing after 
     the date of the filing of the petition on unsecured claims 
     that are nondischargeable under section 1328(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims;'';
       (5) in section 1225(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) if the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order for such obligation that first become payable 
     after the date on which the petition is filed.'';
       (6) in section 1228(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order to pay a 
     domestic support obligation, after such debtor certifies that 
     all amounts payable under such order or statute that are due 
     on or before the date of the certification (including amounts 
     due before the petition was filed, but only to the extent 
     provided for in the plan) have been paid'' after ``completion 
     by the debtor of all payments under the plan'';
       (7) in section 1307(c)--
       (A) in paragraph (9), by striking ``or'' at the end;
       (B) in paragraph (10), by striking the period at the end 
     and inserting ``; or''; and
       (C) by adding at the end the following:
       ``(11) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date on which 
     the petition is filed.'';
       (8) in section 1322(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding in the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period 
     beginning on the date that the first payment is due under the 
     plan will be applied to make payments under the plan.'';
       (9) in section 1322(b)--
       (A) in paragraph (9), by striking ``; and'' and inserting a 
     semicolon;
       (B) by redesignating paragraph (10) as paragraph (11); and
       (C) inserting after paragraph (9) the following:
       ``(10) provide for the payment of interest accruing after 
     the date of the filing of the petition on unsecured claims 
     that are nondischargeable under section 1328(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims; 
     and'';
       (10) in section 1325(a) (as amended by this Act), by adding 
     at the end the following:
       ``(8) the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order or statute for such obligation that first becomes 
     payable after the date on which the petition is filed; and'';
       (11) in section 1328(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order to pay a 
     domestic support obligation, after such debtor certifies that 
     all amounts payable under such order or statute that are due 
     on or before the date of the certification (including amounts 
     due before the petition was filed, but only to the extent 
     provided for in the plan) have been paid'' after ``completion 
     by the debtor of all payments under the plan''.

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

       Section 362(b) of title 11, United States Code, is amended 
     by striking paragraph (2) and inserting the following:
       ``(2) under subsection (a)--
       ``(A) of the commencement or continuation of a civil action 
     or proceeding--
       ``(i) for the establishment of paternity;
       ``(ii) for the establishment or modification of an order 
     for domestic support obligations;

[[Page 2568]]

       ``(iii) concerning child custody or visitation;
       ``(iv) for the dissolution of a marriage, except to the 
     extent that such proceeding seeks to determine the division 
     of property that is property of the estate; or
       ``(v) regarding domestic violence;
       ``(B) the collection of a domestic support obligation from 
     property that is not property of the estate;
       ``(C) with respect to the withholding of income that is 
     property of the estate or property of the debtor for payment 
     of a domestic support obligation under a judicial or 
     administrative order;
       ``(D) 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));
       ``(E) the reporting of overdue support owed by a parent to 
     any consumer reporting agency as specified in section 
     466(a)(7) of the Social Security Act (42 U.S.C. 666(a)(7));
       ``(F) the interception of tax refunds, as specified in 
     sections 464 and 466(a)(3) of the Social Security Act (42 
     U.S.C. 664 and 666(a)(3)) or under an analogous State law; or
       ``(G) the enforcement of medical obligations as specified 
     under title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.);''.

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

       Section 523 of title 11, United States Code, is amended--
       (1) in subsection (a)--
       (A) by striking paragraph (5) and inserting the following:
       ``(5) for a domestic support obligation;'';
       (B) in paragraph (15)--
       (i) by inserting ``to a spouse, former spouse, or child of 
     the debtor and'' before ``not of the kind'';
       (ii) by inserting ``or'' after ``court of record,''; and
       (iii) by striking ``unless--'' and all that follows through 
     the end of the paragraph and inserting a semicolon; and
       (C) by striking paragraph (18); and
       (2) in subsection (c), by striking ``(6), or (15)'' each 
     place it appears and inserting ``or (6)''.

     SEC. 216. CONTINUED LIABILITY OF PROPERTY.

       Section 522 of title 11, United States Code, is amended--
       (1) in subsection (c), by striking paragraph (1) and 
     inserting the following:
       ``(1) a debt of a kind specified in paragraph (1) or (5) of 
     section 523(a) (in which case, notwithstanding any provision 
     of applicable nonbankruptcy law to the contrary, such 
     property shall be liable for a debt of a kind specified in 
     section 523(a)(5));'';
       (2) in subsection (f)(1)(A), by striking the dash and all 
     that follows through the end of the subparagraph and 
     inserting ``of a kind that is specified in section 523(a)(5); 
     or''; and
       (3) in subsection (g)(2), by striking ``subsection (f)(2)'' 
     and inserting ``subsection (f)(1)(B)''.

     SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST 
                   PREFERENTIAL TRANSFER MOTIONS.

       Section 547(c)(7) of title 11, United States Code, is 
     amended to read as follows:
       ``(7) to the extent such transfer was a bona fide payment 
     of a debt for a domestic support obligation;''.

     SEC. 218. DISPOSABLE INCOME DEFINED.

       (a) Confirmation of Plan Under Chapter 12.--Section 
     1225(b)(2)(A) of title 11, United States Code, is amended by 
     inserting ``or for a domestic support obligation that first 
     becomes payable after the date on which the petition is 
     filed'' 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 domestic support obligation that first 
     becomes payable after the date on which the petition is 
     filed'' 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 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 
     a semicolon; and
       (C) by adding at the end the following:
       ``(10) if, with respect to an individual debtor, there is a 
     claim for a domestic support obligation, provide the 
     applicable notification specified in subsection (c); and''; 
     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. 664, 666) for the 
     State in which the holder resides for assistance in 
     collecting child support during and after the bankruptcy 
     procedures;
       ``(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;
       ``(III) the last recent known name and address of the 
     debtor's employer; and
       ``(IV) 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) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable 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 (a)--
       (A) in paragraph (6), by striking ``and'' at the end;
       (B) in paragraph (7), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(8) if, with respect to an individual debtor, there is a 
     claim for a domestic support obligation, 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)(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, 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;
       ``(III) the last recent known name and address of the 
     debtor's employer; and
       ``(IV) with respect to the debtor's case, the name of each 
     creditor that holds a claim that--
       ``(aa) is not discharged under paragraph (2), (3), or (14) 
     of section 523(a); or
       ``(bb) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable 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 a domestic support obligation, 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, 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

[[Page 2569]]

     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;
       ``(III) the last recent known name and address of the 
     debtor's employer; and
       ``(IV) 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 (14) 
     of section 523(a); or
       ``(bb) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable to the debtor or any other person by 
     reason of making that disclosure.''.
       (d) Duties of Trustee Under Chapter 13.--Section 1302 of 
     title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(6) if, with respect to an individual debtor, there is a 
     claim for a domestic support obligation, provide the 
     applicable notification specified in subsection (d).''; and
       (2) by adding at the end the following:
       ``(d)(1) In any case described in subsection (b)(6), the 
     trustee shall--
       ``(A)(i) notify in writing the holder of the claim of the 
     right of 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, 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 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;
       ``(III) the last recent known name and address of the 
     debtor's employer; and
       ``(IV) 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 (14) 
     of section 523(a); or
       ``(bb) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable to the debtor or any other person by 
     reason of making that disclosure.''.

     SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS 
                   AND LOANS.

       Section 523(a) of title 11, United States Code, is amended 
     by striking paragraph (8) and inserting the following:
       ``(8) unless excepting such debt from discharge under this 
     paragraph would impose an undue hardship on the debtor and 
     the debtor's dependents, for--
       ``(A)(i) an educational benefit overpayment or loan made, 
     insured, or guaranteed by a governmental unit, or made under 
     any program funded in whole or in part by a governmental unit 
     or nonprofit institution; or
       ``(ii) an obligation to repay funds received as an 
     educational benefit, scholarship, or stipend; or
       ``(B) any other educational loan that is a qualified 
     education loan, as that term is defined in section 221(e)(1) 
     of the Internal Revenue Code of 1986, incurred by an 
     individual debtor;''.

                 Subtitle C--Other Consumer Protections

     SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY 
                   FILINGS.

       Section 110 of title 11, United States Code, is amended--
       (1) in subsection (a)(1), by striking ``a person, other 
     than an attorney or an employee of an attorney'' and 
     inserting ``the attorney for the debtor or an employee of 
     such attorney under the direct supervision of such 
     attorney'';
       (2) in subsection (b)--
       (A) in paragraph (1), by adding at the end the following: 
     ``If a bankruptcy petition preparer is not an individual, 
     then an officer, principal, responsible person, or partner of 
     the preparer shall be required to--
       ``(A) sign the document for filing; and
       ``(B) print on the document the name and address of that 
     officer, principal, responsible person or partner.''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2)(A) Before preparing any document for filing or 
     accepting any fees from a debtor, the bankruptcy petition 
     preparer shall provide to the debtor a written notice 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 redesignated, the 
     following:
       ``(1) The Supreme Court may promulgate rules under section 
     2075 of title 28, or the Judicial Conference of the United 
     States may prescribe guidelines, for setting a maximum 
     allowable fee chargeable by a bankruptcy petition preparer. A 
     bankruptcy petition preparer shall notify the debtor of any 
     such maximum amount before preparing any document for filing 
     for a debtor or accepting any fee from the debtor.'';
       (C) in paragraph (2), as redesignated--
       (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, 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

[[Page 2570]]

       ``(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 striking ``or the 
     United States trustee'' and inserting ``the United States 
     trustee, the bankruptcy administrator, or the court, on the 
     initiative of the court,'';
       (9) in subsection (i)(1), by striking the matter preceding 
     subparagraph (A) and inserting the following:
       ``(i)(1) If a bankruptcy petition preparer violates this 
     section or commits any act that the court finds to be 
     fraudulent, unfair, or deceptive, on motion of the debtor, 
     trustee, United States trustee, or bankruptcy administrator, 
     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, the United States trustee, or the bankruptcy 
     administrator.''; 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, the United 
     States trustee, or the bankruptcy administrator may file a 
     motion for an order imposing a fine on the bankruptcy 
     petition preparer for each violation of this section.
       ``(4)(A) Fines imposed under this subsection in judicial 
     districts served by United States trustees shall be paid to 
     the United States trustee, who shall deposit an amount equal 
     to such fines in a special account of the United States 
     Trustee System Fund referred to in section 586(e)(2) of title 
     28. Amounts deposited under this subparagraph shall be 
     available to fund the enforcement of this section on a 
     national basis.
       ``(B) Fines imposed under this subsection in judicial 
     districts served by bankruptcy administrators shall be 
     deposited as offsetting receipts to the fund established 
     under section 1931 of title 28, and shall remain available 
     until expended to reimburse any appropriation for the amount 
     paid out of such appropriation for expenses of the operation 
     and maintenance of the courts of the United States.''.

     SEC. 222. SENSE OF CONGRESS.

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

     SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES 
                   CODE.

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

     SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

       (a) In General.--Section 522 of title 11, United States 
     Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and'';
       (iii) by adding at the end the following:
       ``(C) retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''; and
       (iv) by striking ``(2)(A) any property'' and inserting:
       ``(3) Property listed in this paragraph is--
       ``(A) any property'';
       (B) by striking paragraph (1) and inserting:
       ``(2) Property listed in this paragraph is property that is 
     specified under subsection (d), unless the State law that is 
     applicable to the debtor under paragraph (3)(A) specifically 
     does not so authorize.'';
       (C) by striking ``(b) Notwithstanding'' and inserting 
     ``(b)(1) Notwithstanding'';
       (D) by striking ``paragraph (2)'' each place it appears and 
     inserting ``paragraph (3)'';
       (E) by striking ``paragraph (1)'' each place it appears and 
     inserting ``paragraph (2)'';
       (F) by striking ``Such property is--''; and
       (G) by adding at the end the following:
       ``(4) For purposes of paragraph (3)(C) and subsection 
     (d)(12), the following shall apply:
       ``(A) If the retirement funds are in a retirement fund that 
     has received a favorable determination under section 7805 of 
     the Internal Revenue Code of 1986, and that determination is 
     in effect as of the date of the 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 under such section 
     7805, those funds are exempt from the estate if the debtor 
     demonstrates that--
       ``(i) no prior determination to the contrary has been made 
     by a court or the Internal Revenue Service; and
       ``(ii)(I) the retirement fund is in substantial compliance 
     with the applicable requirements of the Internal Revenue Code 
     of 1986; or
       ``(II) the retirement fund fails to be in substantial 
     compliance with the applicable requirements of the Internal 
     Revenue Code of 1986 and the debtor is not materially 
     responsible for that failure.
       ``(C) A direct transfer of retirement funds from 1 fund or 
     account that is exempt from taxation under section 401, 403, 
     408, 408A, 414, 457, or 501(a) of the Internal Revenue Code 
     of 1986, under section 401(a)(31) of the Internal Revenue 
     Code of 1986, or otherwise, shall not cease to qualify for 
     exemption under paragraph (3)(C) or subsection (d)(12) by 
     reason of 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, is amended--
       (1) in paragraph (17), by striking ``or'' at the end;
       (2) in paragraph (18), by striking the period and inserting 
     a semicolon;
       (3) by inserting after paragraph (18) the following:
       ``(19) under subsection (a), of withholding of income from 
     a debtor's wages and collection of amounts withheld, under 
     the debtor's agreement authorizing that withholding and 
     collection for the benefit of a pension, profit-sharing, 
     stock bonus, or other plan established under section 401, 
     403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue 
     Code of 1986, that is sponsored by the employer of the 
     debtor, or an affiliate, successor, or predecessor of such 
     employer--
       ``(A) to the extent that the amounts withheld and collected 
     are used solely for payments relating to a loan from a plan 
     that satisfies the requirements of section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974 or is subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) in the case of a loan from a thrift savings plan 
     described in subchapter III of chapter 84 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 (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.''.
       (c) Exceptions To Discharge.--Section 523(a) of title 11, 
     United States Code, as amended by this Act, is amended by 
     adding at the end the following:

[[Page 2571]]

       ``(18) owed to a pension, profit-sharing, stock bonus, or 
     other plan established under section 401, 403, 408, 408A, 
     414, 457, or 501(c) of the Internal Revenue Code of 1986, 
     under--
       ``(A) a loan permitted under section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974, or subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) a loan from the thrift savings plan described in 
     subchapter III of chapter 84 of title 5, that satisfies the 
     requirements of section 8433(g) of such title.
     Nothing in paragraph (18) 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)(19) and any amounts required to 
     repay such loan shall not constitute `disposable income' 
     under section 1325.''.
       (e) Asset Limitation.--Section 522 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(n) For assets in individual retirement accounts 
     described in section 408 or 408A of the Internal Revenue Code 
     of 1986, other than a simplified employee pension under 
     section 408(k) of that Code or a simple retirement account 
     under section 408(p) of that Code, the aggregate value of 
     such assets exempted under this section, without regard to 
     amounts attributable to rollover contributions under section 
     402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the 
     Internal Revenue Code of 1986, and earnings thereon, shall 
     not exceed $1,000,000 (which amount shall be adjusted as 
     provided in section 104 of this title) in a case filed by an 
     individual debtor, except that such amount may be increased 
     if the interests of justice so require.''.

     SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.

       (a) Exclusions.--Section 541 of title 11, United States 
     Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (4), by striking ``or'' at the end;
       (B) by redesignating paragraph (5) as paragraph (10); and
       (C) by inserting after paragraph (4) the following:
       ``(5) funds placed in an education individual retirement 
     account (as defined in section 530(b)(1) of the Internal 
     Revenue Code of 1986) not later than 365 days before the date 
     of filing of the petition, but--
       ``(A) only if the designated beneficiary of such account 
     was a son, daughter, stepson, stepdaughter, grandchild, or 
     step-grandchild of the debtor for the taxable year for which 
     funds were placed in such account;
       ``(B) only to the extent that such funds--
       ``(i) are not pledged or promised to any entity in 
     connection with any extension of credit; and
       ``(ii) are not excess contributions (as described in 
     section 4973(e) of the Internal Revenue Code of 1986); and
       ``(C) in the case of funds placed in all such accounts 
     having the same designated beneficiary not earlier than 720 
     days nor later than 365 days before such date, only so much 
     of such funds as does not exceed $5,000;
       ``(6) funds used to purchase a tuition credit or 
     certificate or contributed to an account in accordance with 
     section 529(b)(1)(A) of the Internal Revenue Code of 1986 
     under a qualified State tuition program (as defined in 
     section 529(b)(1) of such Code) not later than 365 days 
     before the date of filing of the petition, but--
       ``(A) only if the designated beneficiary of the amounts 
     paid or contributed to such tuition program was a son, 
     daughter, stepson, stepdaughter, grandchild, or step-
     grandchild of the debtor for the taxable year for which funds 
     were paid or contributed;
       ``(B) with respect to the aggregate amount paid or 
     contributed to such program having the same designated 
     beneficiary, only so much of such amount as does not exceed 
     the total contributions permitted under section 529(b)(7) of 
     such Code with respect to such beneficiary, as adjusted 
     beginning on the date of the filing of the petition by the 
     annual increase or decrease (rounded to the nearest tenth of 
     1 percent) in the education expenditure category of the 
     Consumer Price Index prepared by the Department of Labor; and
       ``(C) in the case of funds paid or contributed to such 
     program having the same designated beneficiary not earlier 
     than 720 days nor later than 365 days before such date, only 
     so much of such funds as does not exceed $5,000;''; and
       (2) by adding at the end the following:
       ``(e) In determining whether any of the relationships 
     specified in paragraph (5)(A) or (6)(A) of subsection (b) 
     exists, a legally adopted child of an individual (and a child 
     who is a member of an individual's household, if placed with 
     such individual by an authorized placement agency for legal 
     adoption by such individual), or a foster child of an 
     individual (if such child has as the child's principal place 
     of abode the home of the debtor and is a member of the 
     debtor's household) shall be treated as a child of such 
     individual by blood.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by this Act, is amended by adding at 
     the end the following:
       ``(c) In addition to meeting the requirements under 
     subsection (a), a debtor shall file with the court a record 
     of any interest that a debtor has in an education individual 
     retirement account (as defined in section 530(b)(1) of the 
     Internal Revenue Code of 1986) or under a qualified State 
     tuition program (as defined in section 529(b)(1) of such 
     Code).''.

     SEC. 226. DEFINITIONS.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (2) the following:
       ``(3) `assisted person' means any person whose debts 
     consist primarily of consumer debts and whose non-exempt 
     assets are less than $150,000;'';
       (2) by inserting after paragraph (4) the following:
       ``(4A) `bankruptcy assistance' means any goods or services 
     sold or otherwise provided to an assisted person with the 
     express or implied purpose of providing information, advice, 
     counsel, document preparation, or filing, or attendance at a 
     creditors' meeting or appearing in a proceeding on behalf of 
     another or providing legal representation with respect to a 
     case or proceeding under this title;''; and
       (3) by inserting after paragraph (12) the following:
       ``(12A) `debt relief agency' means any person who provides 
     any bankruptcy assistance to an assisted person in return for 
     the payment of money or other valuable consideration, or who 
     is a bankruptcy petition preparer under section 110, but does 
     not include--
       ``(A) any person that is an officer, director, employee or 
     agent of that person;
       ``(B) a nonprofit organization which is exempt from 
     taxation under section 501(c)(3) of the Internal Revenue Code 
     of 1986;
       ``(C) a creditor of the person, to the extent that the 
     creditor is assisting the person to restructure any debt owed 
     by the person to the creditor;
       ``(D) a depository institution (as defined in section 3 of 
     the Federal Deposit Insurance Act) or any Federal credit 
     union or State credit union (as those terms are defined in 
     section 101 of the Federal Credit Union Act), or any 
     affiliate or subsidiary of such a depository institution or 
     credit union; or
       ``(E) an author, publisher, distributor, or seller of works 
     subject to copyright protection under title 17, when acting 
     in such capacity.''.
       (b) Conforming Amendment.--Section 104(b)(1) of title 11, 
     United States Code, is amended by inserting ``101(3),'' after 
     ``sections''.

     SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

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

     ``Sec. 526. Restrictions on debt relief agencies

       ``(a) A debt relief agency shall not--
       ``(1) fail to perform any service that such agency informed 
     an assisted person or prospective assisted person it would 
     provide in connection with a case or proceeding under this 
     title;
       ``(2) make any statement, or counsel or advise any assisted 
     person or prospective assisted person to make a statement in 
     a document filed in a case or proceeding under this title, 
     that is untrue and misleading, or that upon the exercise of 
     reasonable care, should have been known by such agency to be 
     untrue or misleading;
       ``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission, with respect to--
       ``(i) the services that such agency will provide to such 
     person; or
       ``(ii) the benefits and risks that may result if such 
     person becomes a debtor in a case under this title; or
       ``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of such person 
     filing a case under this title or to pay an attorney or 
     bankruptcy petition preparer fee or charge for services 
     performed as part of preparing for or representing a debtor 
     in a case under this title.
       ``(b) Any waiver by any assisted person of any protection 
     or right provided under this section shall not be enforceable 
     against the debtor by any Federal or State court or any other 
     person, but may be enforced against a debt relief agency.
       ``(c)(1) Any contract for bankruptcy assistance between a 
     debt relief agency and an assisted person that does not 
     comply with the material requirements of this section, 
     section 527, or section 528 shall be void and may not be 
     enforced by any Federal or State court or by any other 
     person, other than such assisted person.
       ``(2) Any debt relief agency shall be liable to an assisted 
     person in the amount of any fees or charges in connection 
     with providing bankruptcy assistance to such person that such 
     debt relief agency has received, for actual damages, and for 
     reasonable attorneys' fees and costs if such agency is found, 
     after notice and hearing, to have--

[[Page 2572]]

       ``(A) intentionally or negligently failed to comply with 
     any provision of this section, section 527, or section 528 
     with respect to a case or proceeding under this title for 
     such assisted person;
       ``(B) provided bankruptcy assistance to an assisted person 
     in a case or proceeding under this title that is dismissed or 
     converted to a case under another chapter of this title 
     because of such agency's intentional or negligent failure to 
     file any required document including those specified in 
     section 521; or
       ``(C) intentionally or negligently disregarded the material 
     requirements of this title or the Federal Rules of Bankruptcy 
     Procedure applicable to such agency.
       ``(3) In addition to such other remedies as are provided 
     under State law, whenever the chief law enforcement officer 
     of a State, or an official or agency designated by a State, 
     has reason to believe that any person has violated or is 
     violating this section, the State--
       ``(A) may bring an action to enjoin such violation;
       ``(B) may bring an action on behalf of its residents to 
     recover the actual damages of assisted persons arising from 
     such violation, including any liability under paragraph (2); 
     and
       ``(C) in the case of any successful action under 
     subparagraph (A) or (B), shall be awarded the costs of the 
     action and reasonable attorney fees as determined by the 
     court.
       ``(4) The United States District Court for any district 
     located in the State shall have concurrent jurisdiction of 
     any action under subparagraph (A) or (B) of paragraph (3).
       ``(5) Notwithstanding any other provision of Federal law 
     and in addition to any other remedy provided under Federal or 
     State law, if the court, on its own motion or on motion of 
     the United States trustee or the debtor, finds that a person 
     intentionally violated this section, or engaged in a clear 
     and consistent pattern or practice of violating this section, 
     the court may--
       ``(A) enjoin the violation of such section; or
       ``(B) impose an appropriate civil penalty against such 
     person.''.
       ``(d) No provision of this section, section 527, or section 
     528 shall--
       ``(1) annul, alter, affect, or exempt any person subject to 
     such sections from complying with any law of any State except 
     to the extent that such law is inconsistent with those 
     sections, and then only to the extent of the inconsistency; 
     or
       ``(2) be deemed to limit or curtail the authority or 
     ability--
       ``(A) of a State or subdivision or instrumentality thereof, 
     to determine and enforce qualifications for the practice of 
     law under the laws of that State; or
       ``(B) of a Federal court to determine and enforce the 
     qualifications for the practice of law before that court.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, is amended by 
     inserting before the item relating to section 527, the 
     following:

``526. Debt relief enforcement.''.

     SEC. 228. DISCLOSURES.

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

     ``Sec. 527. Disclosures

       ``(a) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide--
       ``(1) the written notice required under section 342(b)(1) 
     of this title; and
       ``(2) to the extent not covered in the written notice 
     described in paragraph (1), and not later than 3 business 
     days after the first date on which a debt relief agency first 
     offers to provide any bankruptcy assistance services to an 
     assisted person, a clear and conspicuous written notice 
     advising assisted persons that--
       ``(A) all information that the assisted person is required 
     to provide with a petition and thereafter during a case under 
     this title is required to be complete, accurate, and 
     truthful;
       ``(B) all assets and all liabilities are required to be 
     completely and accurately disclosed in the documents filed to 
     commence the case, and the replacement value of each asset as 
     defined in section 506 of this title must be stated in those 
     documents where requested after reasonable inquiry to 
     establish such value;
       ``(C) current monthly income, the amounts specified in 
     section 707(b)(2), and, in a case under chapter 13, 
     disposable income (determined in accordance with section 
     707(b)(2)), are required to be stated after reasonable 
     inquiry; and
       ``(D) information that an assisted person provides during 
     their case may be audited pursuant to this title, and that 
     failure to provide such information may result in dismissal 
     of the proceeding under this title or other sanction 
     including, in some instances, criminal sanctions.
       ``(b) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide each assisted person at 
     the same time as the notices required under subsection (a)(1) 
     with the following statement, to the extent applicable, or 
     one substantially similar. The statement shall be clear and 
     conspicuous and shall be in a single document separate from 
     other documents or notices provided to the assisted person:
       `` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE 
     SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.
       `` `If you decide to seek bankruptcy relief, you can 
     represent yourself, you can hire an attorney to represent 
     you, or you can get help in some localities from a bankruptcy 
     petition preparer who is not an attorney. THE LAW REQUIRES AN 
     ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A 
     WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY 
     PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. 
     Ask to see the contract before you hire anyone.
       `` `The following information helps you understand what 
     must be done in a routine bankruptcy case to help you 
     evaluate how much service you need. Although bankruptcy can 
     be complex, many cases are routine.
       `` `Before filing a bankruptcy case, either you or your 
     attorney should analyze your eligibility for different forms 
     of debt relief made available by the Bankruptcy Code and 
     which form of relief is most likely to be beneficial for you. 
     Be sure you understand the relief you can obtain and its 
     limitations. To file a bankruptcy case, documents called a 
     Petition, Schedules and Statement of Financial Affairs, as 
     well as in some cases a Statement of Intention need to be 
     prepared correctly and filed with the bankruptcy court. You 
     will have to pay a filing fee to the bankruptcy court. Once 
     your case starts, you will have to attend the required first 
     meeting of creditors where you may be questioned by a court 
     official called a `trustee' and by creditors.
       `` `If you choose to file a chapter 7 case, you may be 
     asked by a creditor to reaffirm a debt. You may want help 
     deciding whether to do so and a creditor is not permitted to 
     coerce you into reaffirming your debts.
       `` `If you choose to file a chapter 13 case in which you 
     repay your creditors what you can afford over 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 shall be provided in a clear and 
     conspicuous writing) to the assisted person on how to provide 
     all the information the assisted person is required to 
     provide under this title pursuant to section 521, including--
       ``(1) how to value assets at replacement value, determine 
     current monthly income, the amounts specified in section 
     707(b)(2)) and, in a chapter 13 case, how to determine 
     disposable income in accordance with section 707(b)(2) and 
     related calculations;
       ``(2) how to complete the list of creditors, including how 
     to determine what amount is owed and what address for the 
     creditor should be shown; and
       ``(3) how to determine what property is exempt and how to 
     value exempt property at replacement value as defined in 
     section 506 of this title.
       ``(d) A debt relief agency shall maintain a copy of the 
     notices required under subsection (a) of this section for 2 
     years after the date on which the notice is given the 
     assisted person.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, as amended by this 
     Act, is amended by inserting after the item relating to 
     section 526 the following:

``527. Disclosures.''.

     SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.

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

     ``Sec. 528. Requirements for debt relief agencies

       ``(a) A debt relief agency shall--
       ``(1) not later than 5 business days after the first date 
     such agency provides any bankruptcy assistance services to an 
     assisted person, but prior to such assisted person's petition 
     under this title being filed, execute a written contract with 
     such assisted person that explains clearly and 
     conspicuously--
       ``(A) the services such agency will provide to such 
     assisted person; and

[[Page 2573]]

       ``(B) the fees or charges for such services, and the terms 
     of payment;
       ``(2) provide the assisted person with a copy of the fully 
     executed and completed contract;
       ``(3) clearly and conspicuously disclose in any 
     advertisement of bankruptcy assistance services or of the 
     benefits of bankruptcy directed to the general public 
     (whether in general media, seminars or specific mailings, 
     telephonic or electronic messages, or otherwise) that the 
     services or benefits are with respect to bankruptcy relief 
     under this title; and
       ``(4) clearly and conspicuously using the following 
     statement: `We are a debt relief agency. We help people file 
     for bankruptcy relief under the Bankruptcy Code.' or a 
     substantially similar statement.
       ``(b)(1) An advertisement of bankruptcy assistance services 
     or of the benefits of bankruptcy directed to the general 
     public includes--
       ``(A) descriptions of bankruptcy assistance in connection 
     with a chapter 13 plan whether or not chapter 13 is 
     specifically mentioned in such advertisement; and
       ``(B) statements such as `federally supervised repayment 
     plan' or `Federal debt restructuring help' or other similar 
     statements that could lead a reasonable consumer to believe 
     that debt counseling was being offered when in fact the 
     services were directed to providing bankruptcy assistance 
     with a chapter 13 plan or other form of bankruptcy relief 
     under this title.
       ``(2) An advertisement, directed to the general public, 
     indicating that the debt relief agency provides assistance 
     with respect to credit defaults, mortgage foreclosures, 
     eviction proceedings, excessive debt, debt collection 
     pressure, or inability to pay any consumer debt shall--
       ``(A) disclose clearly and conspicuously in such 
     advertisement that the assistance may involve bankruptcy 
     relief under this title; and
       ``(B) include the following statement: `We are a debt 
     relief agency. We help people file for bankruptcy relief 
     under the Bankruptcy Code,' or a substantially similar 
     statement.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, as amended by this 
     Act, is amended by inserting after the item relating to 
     section 527, the following:

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

     SEC. 230. GAO STUDY.

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

                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 shall 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 or any other reason to conclude that the later case 
     will be concluded--

       ``(aa) if a case under chapter 7, with a discharge; or
       ``(bb) if a case under chapter 11 or 13, with a confirmed 
     plan 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

[[Page 2574]]

     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 the date of entry 
     of such order by the court, except that a debtor in a 
     subsequent case may move for relief from such order based 
     upon changed circumstances or for good cause shown, after 
     notice and a hearing. Any Federal, State, or local 
     governmental unit that accepts notices of interests or liens 
     in real property shall accept any certified copy of an order 
     described in this subsection for indexing and recording.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, is amended by inserting after paragraph (19), as 
     added by this Act, the following:
       ``(20) 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;
       ``(21) under subsection (a), of any act to enforce any lien 
     against or security interest in real property--
       ``(A) if the debtor is ineligible under section 109(g) to 
     be a debtor in a bankruptcy case; or
       ``(B) if the bankruptcy case was filed in violation of a 
     bankruptcy court order in a prior bankruptcy case prohibiting 
     the debtor from being a debtor in another bankruptcy case;''.

     SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

       Title 11, United States Code, is amended--
       (1) in section 521(a) (as so designated by this Act)--
       (A) in paragraph (4), by striking ``, and'' at the end and 
     inserting a semicolon;
       (B) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(6) in an individual case under chapter 7 of this title, 
     not retain possession of personal property as to which a 
     creditor has an allowed claim for the purchase price secured 
     in whole or in part by an interest in that personal property 
     unless, in the case of an individual debtor, the debtor, not 
     later than 45 days after the first meeting of creditors under 
     section 341(a), either--
       ``(A) enters into an agreement with the creditor pursuant 
     to section 524(c) of this title with respect to the claim 
     secured by such property; or
       ``(B) redeems such property from the security interest 
     pursuant to section 722 of this title.
     If the debtor fails to so act within the 45-day period 
     referred to in paragraph (6), the stay under section 362(a) 
     of this title is terminated with respect to the personal 
     property of the estate or of the debtor which is affected, 
     such property shall no longer be property of the estate, and 
     the creditor may take whatever action as to such property as 
     is permitted by applicable nonbankruptcy law, unless the 
     court determines on the motion of the trustee brought before 
     the expiration of such 45-day period, and after notice and a 
     hearing, that such property is of consequential value or 
     benefit to the estate, orders appropriate adequate protection 
     of the creditor's interest, and orders the debtor to deliver 
     any collateral in the debtor's possession to the trustee.''; 
     and
       (2) in section 722, by inserting ``in full at the time of 
     redemption'' before the period at the end.

     SEC. 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)'' 
     inserting ``(e), (f), and (h)'';
       (B) by redesignating subsection (h) as subsection (k); and
       (C) by inserting after subsection (g) the following:
       ``(h)(1) In an individual case under chapter 7, 11, or 13, 
     the stay provided by subsection (a) is terminated with 
     respect to personal property of the estate or of the debtor 
     securing in whole or in part a claim, or subject to an 
     unexpired lease, and such personal property shall no longer 
     be property of the estate if the debtor fails within the 
     applicable time set by section 521(a)(2) of this title--
       ``(A) to file timely any statement of intention required 
     under section 521(a)(2) of this title with respect to that 
     property or to indicate in that statement that the debtor 
     will either surrender the property or retain it and, if 
     retaining it, either redeem the property pursuant to section 
     722 of this title, reaffirm the debt it secures pursuant to 
     section 524(c) of this title, or assume the unexpired lease 
     pursuant to section 365(p) of this title if the trustee does 
     not do so, as applicable; and
       ``(B) to take timely the action specified in that statement 
     of intention, as it may be amended before expiration of the 
     period for taking action, unless the statement of intention 
     specifies reaffirmation and the creditor refuses to reaffirm 
     on the original contract terms.
       ``(2) Paragraph (1) does not apply if the court determines, 
     on the motion of the trustee filed before the expiration of 
     the applicable time set by section 521(a)(2), after notice 
     and a hearing, that such property is of consequential value 
     or benefit to the estate, and orders appropriate adequate 
     protection of the creditor's interest, and orders the debtor 
     to deliver any collateral in the debtor's possession to the 
     trustee. If the court does not so determine, the stay 
     provided by subsection (a) shall terminate upon the 
     conclusion of the proceeding on the motion.''; and
       (2) in section 521--
       (A) in subsection (a)(2), as so designated by this Act, by 
     striking ``consumer'';
       (B) in subsection (a)(2)(B), as so designated by this Act--
       (i) by striking ``forty-five days after the filing of a 
     notice of intent under this section'' and inserting ``30 days 
     after the first date set for the meeting of creditors under 
     section 341(a) of this title''; and
       (ii) by striking ``forty-five day'' and inserting ``30-
     day'';
       (C) in subsection (a)(2)(C), as so designated by this Act, 
     by inserting ``, except as provided in section 362(h) of this 
     title'' before the semicolon; and
       (D) by adding at the end the following:
       ``(d) If the debtor fails timely to take the action 
     specified in subsection (a)(6) of this section, or in 
     paragraphs (1) and (2) of section 362(h) of this title, with 
     respect to property which a lessor or bailor owns and has 
     leased, rented, or bailed to the debtor or as to which a 
     creditor holds a security interest not otherwise voidable 
     under section 522(f), 544, 545, 547, 548, or 549 of this 
     title, nothing in this title shall prevent or limit the 
     operation of a provision in the underlying lease or agreement 
     which has the effect of placing the debtor in default under 
     such lease or agreement by reason of the occurrence, 
     pendency, or existence of a proceeding under this title or 
     the insolvency of the debtor. Nothing in this subsection 
     shall be deemed to justify limiting such a provision in any 
     other circumstance.''.

     SEC. 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 creditor has a 
     purchase money security interest securing the debt that is 
     the subject of the claim, the debt 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 1-year period preceding that filing.''.
       (c) Definitions.--Section 101 of title 11, United States 
     Code, as amended by 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, a mobile or manufactured home, or trailer;''; and
       (2) by inserting after paragraph (27), the following:
       ``(27A) `incidental property' means, with respect to a 
     debtor's principal residence--
       ``(A) property commonly conveyed with a principal residence 
     in the area where the real 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. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

       Section 522(b)(3)(A) of title 11, United States Code, as so 
     designated by this Act, is amended--
       (1) by striking ``180 days'' and inserting ``730 days''; 
     and
       (2) by striking ``, or for a longer portion of such 180-day 
     period than in any other place'' and inserting ``or if the 
     debtor's domicile has not been located at a single State for 
     such 730-day period, the place in which the debtor's domicile 
     was located for 180 days immediately preceding the 730-day 
     period or for a

[[Page 2575]]

     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, is amended--
       (1) in subsection (b)(3)(A), as so designated by this Act, 
     by inserting ``subject to subsections (o) and (p),'' before 
     ``any property''; and
       (2) by adding at the end the following:
       ``(o) For purposes of subsection (b)(3)(A), and 
     notwithstanding subsection (a), the value of an interest in--
       ``(1) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(2) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(3) a burial plot for the debtor or a dependent of the 
     debtor;

     shall be reduced to the extent that such value is 
     attributable to any portion of any property that the debtor 
     disposed of in the 7-year period ending on the date of the 
     filing of the petition with the intent to hinder, delay, or 
     defraud a creditor and that the debtor could not exempt, or 
     that portion that the debtor could not exempt, under 
     subsection (b), if on such date the debtor had held the 
     property so disposed of.''.

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

       (a) Stopping Abusive Conversions From Chapter 13.--Section 
     348(f)(1) of title 11, United States Code, is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B)--
       (A) by striking ``in the converted case, with allowed 
     secured claims'' and inserting ``only in a case converted to 
     a case under chapter 11 or 12, but not in a case converted to 
     a case under chapter 7, with allowed secured claims in cases 
     under chapters 11 and 12''; and
       (B) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(C) with respect to cases converted from chapter 13--
       ``(i) the claim of any creditor holding security as of the 
     date of the petition shall continue to be secured by that 
     security unless the full amount of such claim determined 
     under applicable nonbankruptcy law has been paid in full as 
     of the date of conversion, notwithstanding any valuation or 
     determination of the amount of an allowed secured claim made 
     for the purposes of the chapter 13 proceeding; and
       ``(ii) unless a prebankruptcy default has been fully cured 
     under the plan at the time of conversion, in any proceeding 
     under this title or otherwise, the default shall have the 
     effect given under applicable nonbankruptcy law.''.
       (b) Giving Debtors the Ability To Keep Leased Personal 
     Property by Assumption.--Section 365 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(p)(1) If a lease of personal property is rejected or not 
     timely assumed by the trustee under subsection (d), the 
     leased property is no longer property of the estate and the 
     stay under section 362(a) is automatically terminated.
       ``(2)(A) In the case of an individual under chapter 7, the 
     debtor may notify the creditor in writing that the debtor 
     desires to assume the lease. Upon being so notified, the 
     creditor may, at its option, notify the debtor that it is 
     willing to have the lease assumed by the debtor and may 
     condition such assumption on cure of any outstanding default 
     on terms set by the contract.
       ``(B) If, not later than 30 days after notice is provided 
     under subparagraph (A), the debtor notifies the lessor in 
     writing that the lease is assumed, the liability under the 
     lease will be assumed by the debtor and not by the estate.
       ``(C) The stay under section 362 and the injunction under 
     section 524(a)(2) shall not be violated by notification of 
     the debtor and negotiation of cure under this subsection.
       ``(3) In a case under chapter 11 in which the debtor is an 
     individual and in a case under chapter 13, if the debtor is 
     the lessee with respect to personal property and the lease is 
     not assumed in the plan confirmed by the court, the lease is 
     deemed rejected as of the conclusion of the hearing on 
     confirmation. If the lease is rejected, the stay under 
     section 362 and any stay under section 1301 is automatically 
     terminated with respect to the property subject to the 
     lease.''.
       (c) Adequate Protection of Lessors and Purchase Money 
     Secured Creditors.--
       (1) Confirmation of plan.--Section 1325(a)(5)(B) of title 
     11, United States Code, is amended--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii), by striking ``or'' at the end and 
     inserting ``and''; and
       (C) by adding at the end the following:
       ``(iii) if--

       ``(I) property to be distributed pursuant to this 
     subsection is in the form of periodic payments, such payments 
     shall be in equal monthly amounts; and
       ``(II) the holder of the claim is secured by personal 
     property, the amount of such payments shall not be less than 
     an amount sufficient to provide to the holder of such claim 
     adequate protection during the period of the plan; or''.

       (2) Payments.--Section 1326(a) of title 11, United States 
     Code, is amended to read as follows:
       ``(a)(1) Unless the court orders otherwise, the debtor 
     shall commence making payments not later than 30 days after 
     the date of the filing of the plan or the order for relief, 
     whichever is earlier, in the amount--
       ``(A) proposed by the plan to the trustee;
       ``(B) scheduled in a lease of personal property directly to 
     the lessor for that portion of the obligation that becomes 
     due after the order for relief, reducing the payments under 
     subparagraph (A) by the amount so paid and providing the 
     trustee with evidence of such payment, including the amount 
     and date of payment; and
       ``(C) that provides adequate protection directly to a 
     creditor holding an allowed claim secured by personal 
     property to the extent the claim is attributable to the 
     purchase of such property by the debtor for that portion of 
     the obligation that becomes due after the order for relief, 
     reducing the payments under subparagraph (A) by the amount so 
     paid and providing the trustee with evidence of such payment, 
     including the amount and date of payment.
       ``(2) A payment made under paragraph (1)(A) shall be 
     retained by the trustee until confirmation or denial of 
     confirmation. If a plan is confirmed, the trustee shall 
     distribute any such payment in accordance with the plan as 
     soon as is practicable. If a plan is not confirmed, the 
     trustee shall return any such payments not previously paid 
     and not yet due and owing to creditors pursuant to paragraph 
     (3) to the debtor, after deducting any unpaid claim allowed 
     under section 503(b).
       ``(3) Subject to section 363, the court may, upon notice 
     and a hearing, modify, increase, or reduce the payments 
     required under this subsection pending confirmation of a 
     plan.
       ``(4) Not later than 60 days after the date of filing of a 
     case under this chapter, a debtor retaining possession of 
     personal property subject to a lease or securing a claim 
     attributable in whole or in part to the purchase price of 
     such property shall provide the lessor or secured creditor 
     reasonable evidence of the maintenance of any required 
     insurance coverage with respect to the use or ownership of 
     such property and continue to do so for so long as the debtor 
     retains possession of such property.''.

     SEC. 310. LIMITATION ON LUXURY GOODS.

       Section 523(a)(2)(C) of title 11, United States Code, is 
     amended to read as follows:
       ``(C)(i) for purposes of subparagraph (A)--
       ``(I) consumer debts owed to a single creditor and 
     aggregating more than $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, is amended 
     by inserting after paragraph (21), as added by this Act, the 
     following:
       ``(22) 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;
       ``(23) 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;
       ``(24) under subsection (a)(3), of eviction actions based 
     on endangerment to property or person or the use of illegal 
     drugs;
       ``(25) under subsection (a) of any transfer that is not 
     avoidable under section 544 and that is not avoidable under 
     section 549;''.

     SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

       Title 11, United States Code, is amended--
       (1) in section 727(a)(8), by striking ``six'' and inserting 
     ``8''; and
       (2) in section 1328, by inserting after subsection (e) the 
     following:
       ``(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

[[Page 2576]]

     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.

       (a) Definition.--Section 522(f) of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(4)(A) Subject to subparagraph (B), for purposes of 
     paragraph (1)(B), the term `household goods' means--
       ``(i) clothing;
       ``(ii) furniture;
       ``(iii) appliances;
       ``(iv) 1 radio;
       ``(v) 1 television;
       ``(vi) 1 VCR;
       ``(vii) linens;
       ``(viii) china;
       ``(ix) crockery;
       ``(x) kitchenware;
       ``(xi) educational materials and educational equipment 
     primarily for the use of minor dependent children of the 
     debtor, 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 the toys and hobby 
     equipment of minor dependent children and wedding rings) 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.''.
       (b) Study.--Not later than 2 years after the date of 
     enactment of this Act, the Director of the Executive Office 
     for United States Trustees shall submit a report to the 
     Committee on the Judiciary of the Senate and the Committee on 
     the Judiciary of the House of Representatives containing its 
     findings regarding utilization of the definition of household 
     goods, as defined in section 522(f)(4) of title 11, United 
     States Code, as added by this section, with respect to the 
     avoidance of nonpossessory, nonpurchase money security 
     interests in household goods under section 522(f)(1)(B) of 
     title 11, United States Code, and the impact that section 
     522(f)(4) of that title, as added by this section, has had on 
     debtors and on the bankruptcy courts. Such report may include 
     recommendations for amendments to section 522(f)(4) of title 
     11, United States Code, consistent with the Director's 
     findings.

     SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.

       (a) In General.--Section 523(a) of title 11, United States 
     Code, is amended by inserting after paragraph (14) the 
     following:
       ``(14A) incurred to pay a tax to a governmental unit, other 
     than the United States, that would be nondischargeable under 
     paragraph (1);''.
       (b) Discharge Under Chapter 13.--Section 1328(a) of title 
     11, United States Code, is amended by striking paragraphs (1) 
     through (3) and inserting the following:
       ``(1) provided for under section 1322(b)(5);
       ``(2) of the kind specified in paragraph (2), (3), (4), 
     (5), (8), or (9) of section 523(a);
       ``(3) for restitution, or a criminal fine, included in a 
     sentence on the debtor's conviction of a crime; or
       ``(4) for restitution, or damages, awarded in a civil 
     action against the debtor as a result of willful or malicious 
     injury by the debtor that caused personal injury to an 
     individual or the death of an individual.''.

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

       (a) Notice.--Section 342 of title 11, United States Code, 
     as amended by this Act, is amended--
       (1) in subsection (c)--
       (A) by inserting ``(1)'' after ``(c)'';
       (B) by striking ``, but the failure of such notice to 
     contain such information shall not invalidate the legal 
     effect of such notice''; and
       (C) by adding at the end the following:
       ``(2) If, within the 90 days prior to the date of the 
     filing of a petition in a voluntary case, the creditor 
     supplied the debtor in at least 2 communications sent to the 
     debtor with the current account number of the debtor and the 
     address at which the creditor wishes to receive 
     correspondence, then the debtor shall send any notice 
     required under this title to the address provided by the 
     creditor and such notice shall include the account number. In 
     the event the creditor would be in violation of applicable 
     nonbankruptcy law by sending any such communication within 
     such 90-day period and if the creditor supplied the debtor in 
     the last 2 communications with the current account number of 
     the debtor and the address at which the creditor wishes to 
     receive correspondence, then the debtor shall send any notice 
     required under this title to the address provided by the 
     creditor and such notice shall include the account number.''; 
     and
       (2) by adding at the end the following:
       ``(e) 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.
       ``(f) 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 (e) with respect to a particular case.
       ``(g)(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(k) 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 this Act, is amended--
       (1) in subsection (a), as so designated by this Act, 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 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;
       ``(v) a statement of the amount of monthly net income, 
     itemized to show how the amount is calculated; and
       ``(vi) a statement disclosing any reasonably anticipated 
     increase in income or expenditures over the 12-month period 
     following the date of filing;''; and
       (2) by adding at the end the following:
       ``(e)(1) At any time, a creditor, in the case of an 
     individual under chapter 7 or 13, may file with the court 
     notice that the creditor requests the petition, schedules, 
     and a statement of affairs filed by the debtor in the case, 
     and the court shall make those documents available to the 
     creditor who requests those documents.
       ``(2)(A) The debtor shall provide either a tax return or 
     transcript at the election of the debtor, for the latest 
     taxable period prior to filing for which a tax return has 
     been or should have been filed, to the trustee, not later 
     than 7 days before the date first set for the first meeting 
     of creditors, or the case shall be dismissed, unless the 
     debtor demonstrates that the failure to file a return as 
     required is due to circumstances beyond the control of the 
     debtor.
       ``(B) If a creditor has requested a tax return or 
     transcript referred to in subparagraph (A), the debtor shall 
     provide such tax return or transcript to the requesting 
     creditor at the time the debtor provides the tax return or 
     transcript to the trustee, or the case shall be dismissed, 
     unless the debtor demonstrates that the debtor is unable to 
     provide such information due to circumstances beyond the 
     control of the debtor.
       ``(3)(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 request such plan--
       ``(i) at a reasonable cost; and
       ``(ii) not later than 5 days after such request.
       ``(f) An individual debtor in a case under chapter 7, 11, 
     or 13 shall file with the court at the request of any party 
     in interest--
       ``(1) at the time filed with the taxing authority, all tax 
     returns required under applicable law, including any 
     schedules or attachments, with respect to the period from the 
     commencement of the case until such time as the case is 
     closed;

[[Page 2577]]

       ``(2) at the time filed with the taxing authority, all tax 
     returns required under applicable law, including any 
     schedules or attachments, that were not filed with the taxing 
     authority when the schedules under subsection (a)(1) were 
     filed with respect to the period that is 3 years before the 
     order of relief;
       ``(3) any amendments to any of the tax returns, including 
     schedules or attachments, described in paragraph (1) or (2); 
     and
       ``(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.
       ``(g)(1) A statement referred to in subsection (f)(4) shall 
     disclose--
       ``(A) the amount and sources of income of the debtor;
       ``(B) the identity of any 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 subsection (e)(2)(A) and 
     subsection (f) shall be available to the United States 
     trustee, any bankruptcy administrator, any trustee, and any 
     party in interest for inspection and copying, subject to the 
     requirements of subsection (h).
       ``(h)(1) Not later than 180 days after the date of 
     enactment of the Bankruptcy Abuse Prevention and Consumer 
     Protection Act of 2001, 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 and 180 days after the date of 
     enactment of the Bankruptcy Abuse Prevention and Consumer 
     Protection Act of 2001, the Director of the Administrative 
     Office of the United States Courts shall prepare and submit 
     to Congress a report that--
       ``(A) assesses the effectiveness of the procedures under 
     paragraph (1); and
       ``(B) if appropriate, includes proposed legislation to--
       ``(i) further protect the confidentiality of tax 
     information; and
       ``(ii) provide penalties for the improper use by any person 
     of the tax information required to be provided under this 
     section.
       ``(i) 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 
     this Act, is amended by adding at the end the following:
       ``(j)(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.

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

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

       Title 11, United States Code, is amended--
       (1) by amending section 1322(d) to read as follows:
       ``(d)(1) If the current monthly income of the debtor and 
     the debtor's spouse combined, when multiplied by 12, is not 
     less than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 earner 
     last reported by the Bureau of the Census;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals last 
     reported by the Bureau of the Census, plus $525 per month for 
     each individual in excess of 4,

     the plan may not provide for payments over a period that is 
     longer than 5 years.
       ``(2) If the current monthly income of the debtor and the 
     debtor's spouse combined, when multiplied by 12, is less 
     than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 earner 
     last reported by the Bureau of the Census;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals last 
     reported by the Bureau of the Census, plus $525 per month for 
     each individual in excess of 4,

     the plan may not provide for payments over a period that is 
     longer than 3 years, unless the court, for cause, approves a 
     longer period, but the court may not approve a period that is 
     longer than 5 years.'';
       (2) in section 1325(b)(1)(B), by striking ``three-year 
     period'' and inserting ``applicable commitment period''; and
       (3) in section 1325(b), as amended by this Act, by adding 
     at the end the following:
       ``(4) For purposes of this subsection, the `applicable 
     commitment period'--
       ``(A) subject to subparagraph (B), shall be--
       ``(i) 3 years; or
       ``(ii) not less than 5 years, if the current monthly income 
     of the debtor and the debtor's spouse combined, when 
     multiplied by 12, is not less than--
       ``(I) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 earner 
     last reported by the Bureau of the Census;
       ``(II) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals last reported by the Bureau of the Census; or
       ``(III) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals last 
     reported by the Bureau of the Census, plus $525 per month for 
     each individual in excess of 4; and
       ``(B) may be less than 3 or 5 years, whichever is 
     applicable under subparagraph (A), but only if the plan 
     provides for payment in full of all allowed unsecured claims 
     over a shorter period.''; and
       (4) in section 1329(c), by striking ``three years'' and 
     inserting ``the applicable commitment period under section 
     1325(b)(1)(B)''.

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

       It is the sense of Congress that rule 9011 of the Federal 
     Rules of Bankruptcy Procedure (11 U.S.C. App.) should be 
     modified to include a requirement that all documents 
     (including schedules), signed and unsigned, submitted to the 
     court or to a trustee by debtors who represent themselves and 
     debtors who are represented by 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. CHAPTER 11 CASES FILED BY INDIVIDUALS.

       (a) Property of the Estate.--

[[Page 2578]]

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

     ``Sec. 1115. Property of the estate

       ``(a) In a case concerning an individual debtor, property 
     of the estate includes, in addition to the property specified 
     in section 541--
       ``(1) all property of the kind specified in section 541 
     that the debtor acquires after the commencement of the case 
     but before the case is closed, dismissed, or converted to a 
     case under chapter 7, 12, or 13, whichever occurs first; and
       ``(2) earnings from services performed by the debtor after 
     the commencement of the case but before the case is closed, 
     dismissed, or converted to a case under chapter 7, 12, or 13, 
     whichever occurs first.''.
       ``(b) Except as provided in section 1104 or a confirmed 
     plan or order confirming a plan, the debtor shall remain in 
     possession of all property of the estate.''.
       (2) Clerical amendment.--The table of sections for chapter 
     11 of title 11, United States Code, is amended by adding at 
     the end of the matter relating to subchapter I the following:

``1115. Property of the estate.''.
       (b) Contents of Plan.--Section 1123(a) of title 11, United 
     States Code, is amended--
       (1) in paragraph (6), by striking ``and'' at the end;
       (2) in paragraph (7), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(8) in a case concerning an individual, provide for the 
     payment to creditors through the plan of all or such portion 
     of earnings from personal services performed by the debtor 
     after the commencement of the case or other future income of 
     the debtor as is necessary for the execution of the plan.''.
       (c) Confirmation of Plan.--
       (1) Requirements relating to value of property.--Section 
     1129(a) of title 11, United States Code, is amended by adding 
     at the end the following:
       ``(15) In a case concerning an individual in which the 
     holder of an allowed unsecured claim objects to the 
     confirmation of the plan--
       ``(A) the value of the property to be distributed under the 
     plan on account of such claim is, as of the effective date of 
     the plan, not less than the amount of such claim; or
       ``(B) the value of the property to be distributed under the 
     plan is not less than the debtor's projected disposable 
     income (as that term is defined in section 1325(b)(2)) to be 
     received during the 5-year period beginning on the date that 
     the first payment is due under the plan, or during the term 
     of the plan, whichever is longer.''.
       (2) Requirement relating to interests in property.--Section 
     1129(b)(2)(B)(ii) of title 11, United States Code, is amended 
     by inserting before the period at the end the following: ``, 
     except that in a case concerning an individual, the debtor 
     may retain property included in the estate under section 
     1115, subject to the requirements of subsection (a)(14)''.
       (d) Effect of Confirmation--Section 1141(d) of title 11, 
     United States Code, is amended--
       (1) in paragraph (2), by striking ``The confirmation of a 
     plan does not discharge an individual debtor'' and inserting 
     ``A discharge under this chapter does not discharge a 
     debtor''; and
       (2) by adding at the end the following:
       ``(5) In a case concerning an individual--
       ``(A) except as otherwise ordered for cause shown, the 
     discharge is not effective until completion of all payments 
     under the plan; and
       ``(B) at any time after the confirmation of the plan and 
     after notice and a hearing, the court may grant a discharge 
     to a debtor that has not completed payments under the plan 
     only if--
       ``(i) for each allowed unsecured claim, the value, as of 
     the effective date of the plan, of property actually 
     distributed under the plan on account of that claim is not 
     less than the amount that would have been paid on such claim 
     if the estate of the debtor had been liquidated under chapter 
     7 of this title on such date; and
       ``(ii) modification of the plan under 1127 of this title is 
     not practicable.''.
       (e) Modification of Plan.--Section 1127 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(e) In a case concerning an individual, the plan may be 
     modified at any time after confirmation of the plan but 
     before the completion of payments under the plan, whether or 
     not the plan has been substantially consummated, upon request 
     of the debtor, the trustee, the United States trustee, or the 
     holder of an allowed unsecured claim, to--
       ``(1) increase or reduce the amount of payments on claims 
     of a particular class provided for by the plan;
       ``(2) extend or reduce the time period for such payments; 
     or
       ``(3) alter the amount of the distribution to a creditor 
     whose claim is provided for by the plan to the extent 
     necessary to take account of any payment of such claim made 
     other than under the plan.
       ``(f)(1) Sections 1121 through 1128 of this title and the 
     requirements of section 1129 of this title apply to any 
     modification under subsection (a).
       ``(2) The plan, as modified, shall become the plan only 
     after there has been disclosure under section 1125, as the 
     court may direct, notice and a hearing, and such modification 
     is approved.''.

     SEC. 322. LIMITATION.

       (a) Exemptions.--Section 522 of title 11, United States 
     Code, as amended by this Act, is amended by adding at the end 
     the following:
       ``(p)(1) Except as provided in paragraph (2) of this 
     subsection and sections 544 and 548 of this title, as a 
     result of electing under subsection (b)(3)(A) to exempt 
     property under State or local law, a debtor may not exempt 
     any amount of interest that was acquired by the debtor during 
     the 2-year period preceding the filing of the petition which 
     exceeds in the aggregate $100,000 in value in--
       ``(A) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(B) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(C) a burial plot for the debtor or a dependent of the 
     debtor.
       ``(2)(A) The limitation under paragraph (1) shall not apply 
     to an exemption claimed under subsection (b)(3)(A) by a 
     family farmer for the principal residence of that farmer.
       ``(B) For purposes of paragraph (1), any amount of such 
     interest does not include any interest transferred from a 
     debtor's previous principal residence (which was acquired 
     prior to the beginning of the 2-year period) into the 
     debtor's current principal residence, where the debtor's 
     previous and current residences are located in the same 
     State.''.
       (b) Adjustment of Dollar Amounts.--Section 104(b) of title 
     11, United States Code, is amended--
       (1) in paragraph (1), by striking ``522(d),'' and inserting 
     ``522(d), 522(n), 522(p),''; and
       (2) in paragraph (3), by striking ``522(d),'' and inserting 
     ``522(d), 522(n), 522(p),''.

     SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT 
                   CONTRIBUTIONS AND OTHER PROPERTY FROM THE 
                   ESTATE.

       (a) In General.--Section 541(b) of title 11, United States 
     Code, is amended by inserting after paragraph (6), as added 
     by this Act, the following:
       ``(7) any amount--
       ``(A) withheld by an employer from the wages of employees 
     for payment as contributions to--
       ``(i) an employee benefit plan subject to title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1001 et seq.) or under an employee benefit plan which is a 
     governmental plan under section 414(d) of the Internal 
     Revenue Code of 1986, a deferred compensation plan under 
     section 457 of the Internal Revenue Code of 1986, or a tax-
     deferred annuity under section 403(b) of the Internal Revenue 
     Code of 1986, except that amount shall not constitute 
     disposable income, as defined in section 1325(b)(2) of this 
     title; or
       ``(ii) a health insurance plan regulated by State law 
     whether or not subject to such title; or
       ``(B) received by the employer from employees for payment 
     as contributions to--
       ``(i) an employee benefit plan subject to title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1001 et seq.) or under an employee benefit plan which is a 
     governmental plan under section 414(d) of the Internal 
     Revenue Code of 1986, a deferred compensation plan under 
     section 457 of the Internal Revenue Code of 1986, or a tax-
     deferred annuity under section 403(b) of the Internal Revenue 
     Code of 1986, except that amount shall not constitute 
     disposable income, as defined in section 1325(b)(2) of this 
     title; or
       ``(ii) a health insurance plan regulated by State law 
     whether or not subject to such title;''.
       (b) Application of Amendment.--The amendments made by this 
     section shall not apply to cases commenced under title 11, 
     United States Code, before the expiration of the 180-day 
     period beginning on the date of enactment of this Act.

     SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLVING 
                   BANKRUPTCY PROFESSIONALS.

       (a) In General.--Section 1334 of title 28, United States 
     Code, is amended--
       (1) in subsection (b), by striking ``Notwithstanding'' and 
     inserting ``Except as provided in subsection (e)(2), and 
     notwithstanding''; and
       (2) by striking subsection (e) and inserting the following:
       ``(e) The district court in which a case under title 11 is 
     commenced or is pending shall have exclusive jurisdiction--
       ``(1) of all the property, wherever located, of the debtor 
     as of the date of commencement of such case, and of property 
     of the estate; and
       ``(2) over all claims or causes of action that involve 
     construction of section 327 of title 11, United States Code, 
     or rules relating to disclosure requirements under section 
     327.''.
       (b) Applicability.--This section shall only apply to cases 
     filed after the date of enactment of this Act.

     SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE INCREASE.

       (a) Actions Under Chapter 7 or 13 of Title 11, United 
     States Code.--Section

[[Page 2579]]

     1930(a) of title 28, United States Code, is amended by 
     striking paragraph (1) and inserting the following:
       ``(1) For a case commenced--
       ``(A) under chapter 7 of title 11, $160; or
       ``(B) under chapter 13 of title 11, $150.''.
       (b) United States Trustee System Fund.--Section 589a(b) of 
     title 28, United States Code, is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1)(A) 40.63 percent of the fees collected under section 
     1930(a)(1)(A) of this title in cases commenced under chapter 
     7 of title 11; and
       ``(B) 70.00 percent of the fees collected under section 
     1930(a)(1)(B) of this title in cases commenced under chapter 
     13 of title 11;'';
       (2) in paragraph (2), by striking ``one-half'' and 
     inserting ``three-fourths''; and
       (3) in paragraph (4), by striking ``one-half'' and 
     inserting ``100 percent''.
       (c) Collection and Deposit of Miscellaneous Bankruptcy 
     Fees.--Section 406(b) of the Judiciary Appropriations Act, 
     1990 (28 U.S.C. 1931 note) is amended by striking ``pursuant 
     to 28 U.S.C. section 1930(b) and 33.87 per centum of the fees 
     hereafter collected under 28 U.S.C. section 1930(a)(1) and 25 
     percent of the fees hereafter collected under 28 U.S.C. 
     section 1930(a)(3) shall be deposited as offsetting receipts 
     to the fund established under 28 U.S.C. section 1931'' and 
     inserting ``under section 1930(b) of title 28, United States 
     Code, and 31.25 percent of the fees collected under section 
     1930(a)(1)(A) of that title, 30.00 percent of the fees 
     collected under section 1930(a)(1)(B) of that title, and 25 
     percent of the fees collected under section 1930(a)(3) of 
     that title shall be deposited as offsetting receipts to the 
     fund established under section 1931 of that title''.

     SEC. 326. SHARING OF COMPENSATION.

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

     SEC. 327. FAIR VALUATION OF COLLATERAL.

       Section 506(a) of title 11, United States Code, is amended 
     by--
       (1) inserting ``(1)'' after ``(a)''; and
       (2) by adding at the end the following:
       ``(2) In the case of an individual debtor under chapters 7 
     and 13, such value with respect to personal property securing 
     an allowed claim shall be determined based on the replacement 
     value of such property as of the date of filing the petition 
     without deduction for costs of sale or marketing. With 
     respect to property acquired for personal, family, or 
     household purpose, replacement value shall mean the price a 
     retail merchant would charge for property of that kind 
     considering the age and condition of the property at the time 
     value is determined.''.

     SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

       (a) Executory Contracts and Unexpired Leases.--Section 365 
     of title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)(A), by striking the semicolon at the 
     end and inserting the following: ``other than a default that 
     is a breach of a provision relating to the satisfaction of 
     any provision (other than a penalty rate or penalty 
     provision) relating to a default arising from any failure to 
     perform nonmonetary obligations under an unexpired lease of 
     real property, if it is impossible for the trustee to cure 
     such default by performing nonmonetary acts at and after the 
     time of assumption, except that if such default arises from a 
     failure to operate in accordance with a nonresidential real 
     property lease, then such default shall be cured by 
     performance at and after the time of assumption in accordance 
     with such lease, and pecuniary losses resulting from such 
     default shall be compensated in accordance with the 
     provisions of paragraph (b)(l);''; and
       (B) in paragraph (2)(D), by striking ``penalty rate or 
     provision'' and inserting ``penalty rate or penalty 
     provision'';
       (2) in subsection (c)--
       (A) in paragraph (2), by inserting ``or'' at the end;
       (B) in paragraph (3), by striking ``; or'' at the end and 
     inserting a period; and
       (C) by striking paragraph (4);
       (3) in subsection (d)--
       (A) by striking paragraphs (5) through (9); and
       (B) by redesignating paragraph (10) as paragraph (5); and
       (4) in subsection (f)(1) by striking ``; except that'' and 
     all that follows through the end of the paragraph and 
     inserting a period.
       (b) Impairment of Claims or Interests.--Section 1124(2) of 
     title 11, United States Code, is amended--
       (1) in subparagraph (A), by inserting ``or of a kind that 
     section 365(b)(2) of this title expressly does not require to 
     be cured'' before the semicolon at the end;
       (2) in subparagraph (C), by striking ``and'' at the end;
       (3) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (4) by inserting after subparagraph (C) the following:
       ``(D) if such claim or such interest arises from any 
     failure to perform a nonmonetary obligation, other than a 
     default arising from failure to operate a non-residential 
     real property lease subject to section 365(b)(1)(A), 
     compensates the holder of such claim or such interest (other 
     than the debtor or an insider) for any actual pecuniary loss 
     incurred by such holder as a result of such failure; and''.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

     SEC. 401. ADEQUATE PROTECTION FOR INVESTORS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, as amended by 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, is amended by inserting after paragraph (25), as 
     added by this Act, 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. 402. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.

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

     SEC. 403. PROTECTION OF REFINANCE OF SECURITY INTEREST.

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

     SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

       (a) In General.--Section 365(d)(4) of title 11, United 
     States Code, is amended to read as follows:
       ``(4)(A) Subject to subparagraph (B), 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)(i) The court may extend the period determined under 
     subparagraph (A), prior to the expiration of the 120-day 
     period, for 90 days upon motion of the trustee or lessor for 
     cause.
       ``(ii) If the court grants an extension under clause (i), 
     the court may grant a subsequent extension only upon prior 
     written consent of the lessor in each instance.''.
       (b) Exception.--Section 365(f)(1) of title 11, United 
     States Code, is amended by striking ``subsection'' the first 
     place it appears and inserting ``subsections (b) and''.

     SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

       (a) Appointment.--Section 1102(a) of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(4) On request of a party in interest and after notice 
     and a hearing, the court may order the United States trustee 
     to change the membership of a committee appointed under this 
     subsection, if the court determines that the change is 
     necessary to ensure adequate representation of creditors or 
     equity security holders. The court may order the United 
     States trustee to increase the number of members of a 
     committee to include a creditor that is a small business 
     concern (as described in section 3(a)(1) of the Small 
     Business Act (15 U.S.C. 632(a)(1))), if the court determines 
     that the creditor holds claims (of the kind represented by 
     the committee) the aggregate amount of which, in comparison 
     to the annual gross revenue of that creditor, is 
     disproportionately large.''.
       (b) Information.--Section 1102(b) of title 11, United 
     States Code, is amended by adding at the end the following:

[[Page 2580]]

       ``(3) A committee appointed under subsection (a) shall--
       ``(A) provide access to information for creditors who--
       ``(i) hold claims of the kind represented by that 
     committee; and
       ``(ii) are not appointed to the committee;
       ``(B) solicit and receive comments from the creditors 
     described in subparagraph (A); and
       ``(C) be subject to a court order that compels any 
     additional report or disclosure to be made to the creditors 
     described in subparagraph (A).''.

     SEC. 406. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES 
                   CODE.

       Section 546 of title 11, United States Code, is amended--
       (1) by redesignating the second subsection 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 paragraphs (2) and (3) of section 
     545, the trustee may not avoid a warehouseman's lien for 
     storage, transportation, or other costs incidental to the 
     storage and handling of goods.
       ``(2) The prohibition under paragraph (1) shall be applied 
     in a manner consistent with any applicable State statute that 
     is similar to section 7-209 of the Uniform Commercial Code, 
     as in effect on the date of enactment of the Bankruptcy Abuse 
     Prevention and Consumer Protection Act of 2001, or any 
     successor thereto.''.

     SEC. 407. AMENDMENTS TO SECTION 330(A) OF TITLE 11, UNITED 
                   STATES CODE.

       Section 330(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (3)--
       (A) by striking ``(A) In'' and inserting ``In''; and
       (B) by inserting ``to an examiner, trustee under chapter 
     11, or professional person'' after ``awarded''; and
       (2) by adding at the end the following:
       ``(7) In determining the amount of reasonable compensation 
     to be awarded to a trustee, the court shall treat such 
     compensation as a commission, based on section 326 of this 
     title.''.

     SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION.

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

     SEC. 409. PREFERENCES.

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

     SEC. 410. VENUE OF CERTAIN PROCEEDINGS.

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

     SEC. 411. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

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

     SEC. 412. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

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

     SEC. 413. CREDITOR REPRESENTATION AT FIRST MEETING OF 
                   CREDITORS.

       Section 341(c) of title 11, United States Code, is amended 
     by inserting at the end the following: ``Notwithstanding any 
     local court rule, provision of a State constitution, any 
     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. 414. DEFINITION OF DISINTERESTED PERSON.

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

     SEC. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.

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

     SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.

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

     SEC. 417. UTILITY SERVICE.

       Section 366 of title 11, United States Code, is amended--
       (1) in subsection (a), by striking ``subsection (b)'' and 
     inserting ``subsections (b) and (c)''; and
       (2) by adding at the end the following:
       ``(c)(1)(A) For purposes of this subsection, the term 
     `assurance of payment' means--
       ``(i) a cash deposit;
       ``(ii) a letter of credit;
       ``(iii) a certificate of deposit;
       ``(iv) a surety bond;
       ``(v) a prepayment of utility consumption; or
       ``(vi) another form of security that is mutually agreed on 
     between the utility and the debtor or the trustee.
       ``(B) For purposes of this subsection an administrative 
     expense priority shall not constitute an assurance of 
     payment.
       ``(2) Subject to paragraphs (3) 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 30-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.''.

     SEC. 418. BANKRUPTCY FEES.

       Section 1930 of title 28, United States Code, is amended--
       (1) in subsection (a), by striking ``Notwithstanding 
     section 1915 of this title, the'' and inserting ``The''; and

[[Page 2581]]

       (2) by adding at the end the following:
       ``(f)(1) Under the procedures prescribed by the Judicial 
     Conference of the United States, the district court or the 
     bankruptcy court may waive the filing fee in a case under 
     chapter 7 of title 11 for an individual if the court 
     determines that such debtor has income less than 150 percent 
     of the income official poverty line (as defined by the Office 
     of Management and Budget, and revised annually in accordance 
     with section 673(2) of the Omnibus Budget Reconciliation Act 
     of 1981) applicable to a family of the size involved and is 
     unable to pay that fee in installments. For purposes of this 
     paragraph, the term ``filing fee'' means the filing required 
     by subsection (a), or any other fee prescribed by the 
     Judicial Conference under subsections (b) and (c) that is 
     payable to the clerk upon the commencement of a case under 
     chapter 7.
       ``(2) The district court or the bankruptcy court may waive 
     for such debtors other fees prescribed under subsections (b) 
     and (c).
       ``(3) This subsection does not restrict the district court 
     or the bankruptcy court from waiving, in accordance with 
     Judicial Conference policy, fees prescribed under this 
     section for other debtors and creditors.''.

     SEC. 419. MORE COMPLETE INFORMATION REGARDING ASSETS OF THE 
                   ESTATE.

       (a) In General.--
       (1) Disclosure.--The Advisory Committee on Bankruptcy Rules 
     of the Judicial Conference of the United States, after 
     consideration of the views of the Director of the Executive 
     Office for United States Trustees, shall propose for adoption 
     amended Federal Rules of Bankruptcy Procedure and Official 
     Bankruptcy Forms directing debtors under chapter 11 of title 
     11, United States Code, to disclose the information described 
     in paragraph (2) by filing and serving periodic financial and 
     other reports designed to provide such information.
       (2) Information.--The information referred to in paragraph 
     (1) is the value, operations, and profitability of any 
     closely held corporation, partnership, or of any other entity 
     in which the debtor holds a substantial or controlling 
     interest.
       (b) Purpose.--The purpose of the rules and reports under 
     subsection (a) shall be to assist parties in interest taking 
     steps to ensure that the debtor's interest in any entity 
     referred to in subsection (a)(2) is used for the payment of 
     allowed claims against debtor.

            Subtitle B--Small Business Bankruptcy Provisions

     SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.

       Section 1125 of title 11, United States Code, is amended--
       (1) in subsection (a)(1), by inserting before the semicolon 
     ``and in determining whether a disclosure statement provides 
     adequate information, the court shall consider the complexity 
     of the case, the benefit of additional information to 
     creditors and other parties in interest, and the cost of 
     providing additional information''; and
       (2) by striking subsection (f), and inserting the 
     following:
       ``(f) Notwithstanding subsection (b), in a small business 
     case--
       ``(1) the court may determine that the plan itself provides 
     adequate information and that a separate disclosure statement 
     is not necessary;
       ``(2) the court may approve a disclosure statement 
     submitted on standard forms approved by the court or adopted 
     under section 2075 of title 28; and
       ``(3)(A) the court may conditionally approve a disclosure 
     statement subject to final approval after notice and a 
     hearing;
       ``(B) acceptances and rejections of a plan may be solicited 
     based on a conditionally approved disclosure statement if the 
     debtor provides adequate information to each holder of a 
     claim or interest that is solicited, but a conditionally 
     approved disclosure statement shall be mailed not later than 
     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. 432. DEFINITIONS.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, as amended by 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 engaged 
     in commercial or business activities (including any affiliate 
     of such person that is also a debtor under this title and 
     excluding a person whose primary activity is the business of 
     owning or operating real property or activities incidental 
     thereto) that has aggregate noncontingent, liquidated secured 
     and unsecured debts as of the date of the petition or the 
     order for relief in an amount not more than $3,000,000 
     (excluding debts owed to 1 or more affiliates or insiders) 
     for a case in which the United States trustee has not 
     appointed under section 1102(a)(1) a committee of unsecured 
     creditors or where the court has determined that the 
     committee of unsecured creditors is not sufficiently active 
     and representative to provide effective oversight of the 
     debtor; and
       ``(B) does not include any member of a group of affiliated 
     debtors that has aggregate noncontingent liquidated secured 
     and unsecured debts in an amount greater than $3,000,000 
     (excluding debt owed to 1 or more affiliates or insiders);''.
       (b) Conforming Amendment.--Section 1102(a)(3) of title 11, 
     United States Code, is amended by inserting ``debtor'' after 
     ``small business''.

     SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

       Within a reasonable period of time after the date of 
     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. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.

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

     ``Sec. 308. Debtor reporting requirements

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

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

     SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR SMALL 
                   BUSINESS CASES.

       (a) Proposal of Rules and Forms.--The 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. 436. DUTIES IN SMALL BUSINESS CASES.

       (a) Duties in Chapter 11 Cases.--Subchapter I of title 11, 
     United States Code, as amended by this Act, is amended by 
     adding at the end the following:

     ``Sec. 1116. Duties of trustee or debtor in possession in 
       small business cases

       ``In a small business case, a trustee or the debtor in 
     possession, in addition to the duties provided in this title 
     and as otherwise required by law, shall--

[[Page 2582]]

       ``(1) append to the voluntary petition or, in an 
     involuntary case, file not later than 7 days after the date 
     of the order for relief--
       ``(A) its most recent balance sheet, statement of 
     operations, cash-flow statement, 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 and other required 
     government filings; and
       ``(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
       ``(7) allow the United States trustee, or a designated 
     representative of the United States trustee, to inspect the 
     debtor's business premises, books, and records at reasonable 
     times, after reasonable prior written notice, unless notice 
     is waived by the debtor.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     11 of title 11, United States Code, is amended by adding at 
     the end of the matter relating to subchapter I the following:

``1116. Duties of trustee or debtor in possession in small business 
              cases.''.

     SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

       Section 1121 of title 11, United States Code, is amended by 
     striking subsection (e) and inserting the following:
       ``(e) In a small business case--
       ``(1) only the debtor may file a plan until after 180 days 
     after the date of the order for relief, unless that period 
     is--
       ``(A) extended as provided by this subsection, after notice 
     and hearing; or
       ``(B) the court, for cause, orders otherwise;
       ``(2) the plan, and any necessary disclosure statement, 
     shall be filed not later than 300 days after the date of the 
     order for relief; and
       ``(3) the time periods specified in paragraphs (1) and (2), 
     and the time fixed in section 1129(e), within which the plan 
     shall be confirmed, may be extended only if--
       ``(A) the debtor, after providing notice to parties in 
     interest (including the United States trustee), demonstrates 
     by a preponderance of the evidence that it is more likely 
     than not that the court will confirm a plan within a 
     reasonable period of time;
       ``(B) a new deadline is imposed at the time the extension 
     is granted; and
       ``(C) the order extending time is signed before the 
     existing deadline has expired.''.

     SEC. 438. PLAN CONFIRMATION DEADLINE.

       Section 1129 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) In a small business case, the plan shall be confirmed 
     not later than 175 days after the date of the order for 
     relief, unless such 175-day period is extended as provided in 
     section 1121(e)(3).''.

     SEC. 439. DUTIES OF THE UNITED STATES 
                   TRUSTEE.

       Section 586(a) of title 28, United States Code, is 
     amended--
       (1) in paragraph (3)--
       (A) in subparagraph (G), by striking ``and'' at the end;
       (B) by redesignating subparagraph (H) as subparagraph (I); 
     and
       (C) by inserting after subparagraph (G) the following:
       ``(H) in small business cases (as defined in section 101 of 
     title 11), performing the additional duties specified in 
     title 11 pertaining to such cases; and'';
       (2) in paragraph (5), by striking ``and'' at the end;
       (3) in paragraph (6), by striking the period at the end and 
     inserting a semicolon; and
       (4) by adding at the end the following:
       ``(7) in each of such small business cases--
       ``(A) conduct an initial debtor interview as soon as 
     practicable after the 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. 440. SCHEDULING CONFERENCES.

       Section 105(d) of title 11, United States Code, is 
     amended--
       (1) in the matter preceding paragraph (1), by striking ``, 
     may''; and
       (2) by striking paragraph (1) and inserting the following:
       ``(1) shall hold such status conferences as are necessary 
     to further the expeditious and economical resolution of the 
     case; and''.

     SEC. 441. SERIAL FILER PROVISIONS.

       Section 362 of title 11, United States Code, as amended by 
     this Act is amended--
       (1) in subsection (k), as redesignated by 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) of this 
     subsection against such entity shall be limited to actual 
     damages.''; and
       (2) by adding at the end the following:
       ``(l)(1) Except as provided in paragraph (2) of this 
     subsection, the provisions of subsection (a) do not apply in 
     a case in which the debtor--
       ``(A) is a debtor in a small business case pending at the 
     time the petition is filed;
       ``(B) was a debtor in a small business case that was 
     dismissed for any reason by an order that became final in the 
     2-year period ending on the date of the order for relief 
     entered with respect to the petition;
       ``(C) was a debtor in a small business case in which a plan 
     was confirmed in the 2-year period ending on the date of the 
     order for relief entered with respect to the petition; or
       ``(D) is an entity that has succeeded to substantially all 
     of the assets or business of a small business debtor 
     described in subparagraph (A), (B), or (C).
       ``(2) This subsection does not apply--
       ``(A) to an involuntary case involving no collusion by the 
     debtor with creditors; or
       ``(B) to the filing of a petition if--
       ``(i) the debtor proves by a preponderance of the evidence 
     that the filing of that petition resulted from circumstances 
     beyond the control of the debtor not foreseeable at the time 
     the case then pending was filed; and
       ``(ii) it is more likely than not that the court will 
     confirm a feasible plan, but not a liquidating plan, within a 
     reasonable period of time.''.

     SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND 
                   APPOINTMENT OF TRUSTEE.

       (a) Expanded Grounds for Dismissal or Conversion.--Section 
     1112 of title 11, United States Code, is amended by striking 
     subsection (b) and inserting the following:
       ``(b)(1) Except as provided in paragraph (2) of this 
     subsection, subsection (c) of this section, and section 
     1104(a)(3), on request of a party in interest, and after 
     notice and a hearing, 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) a plan with a reasonable possibility of being 
     confirmed will be filed within a reasonable period of time; 
     and
       ``(B) the grounds include an act or omission of the 
     debtor--
       ``(i) for which there exists a reasonable justification for 
     the act or omission; and
       ``(ii) that will be cured within a reasonable period of 
     time fixed by the court.
       ``(3) The court shall commence the hearing on any motion 
     under this subsection not later than 30 days after filing of 
     the motion, and shall decide the motion not later than 15 
     days after commencement of 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, the term `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 that poses 
     a risk to the estate or to the public;
       ``(D) unauthorized use of cash collateral harmful to 1 or 
     more creditors;
       ``(E) failure to comply with an order of the court;

[[Page 2583]]

       ``(F) repeated 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 or 
     the bankruptcy administrator;
       ``(I) failure timely to pay taxes due after the date of the 
     order for relief or to file tax returns due after the order 
     for relief;
       ``(J) failure to file a disclosure statement, or to file or 
     confirm a plan, within the time fixed by this title or by 
     order of the court;
       ``(K) failure to pay any fees or charges required under 
     chapter 123 of title 28;
       ``(L) revocation of an order of confirmation under section 
     1144;
       ``(M) inability to effectuate substantial consummation of a 
     confirmed plan;
       ``(N) material default by the debtor with respect to a 
     confirmed plan;
       ``(O) termination of a confirmed plan by reason of the 
     occurrence of a condition specified in the plan; and
       ``(P) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date on which 
     the petition is filed.
       ``(5) The court shall commence the hearing on any motion 
     under this subsection not later than 30 days after filing of 
     the motion, and shall decide the motion not later than 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 or an examiner is in the best interests of 
     creditors and the estate.''.

     SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED STATES CODE, 
                   WITH RESPECT TO SMALL BUSINESSES.

       Not later than 2 years after the date of enactment of this 
     Act, the Administrator of the Small Business Administration, 
     in consultation with the Attorney General, the Director of 
     the 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. 444. PAYMENT OF INTEREST.

       Section 362(d)(3) of title 11, United States Code, is 
     amended--
       (1) by inserting ``or 30 days after the court determines 
     that the debtor is subject to this paragraph, whichever is 
     later'' after ``90-day period)''; and
       (2) by striking subparagraph (B) and inserting the 
     following:
       ``(B) the debtor has commenced monthly payments that--
       ``(i) may, in the debtor's sole discretion, notwithstanding 
     section 363(c)(2), be made from rents or other income 
     generated before 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''.

     SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES.

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

     SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

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

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

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

                       TITLE VI--BANKRUPTCY DATA

     SEC. 601. IMPROVED BANKRUPTCY STATISTICS.

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

     ``Sec. 159. Bankruptcy statistics

       ``(a) The clerk of each district shall collect statistics 
     regarding individual debtors with primarily consumer debts 
     seeking relief under chapters 7, 11, and 13 of title 11. 
     Those statistics shall be on a standardized form prescribed 
     by the Director of the Administrative Office of the United 
     States Courts (referred to in this section as the 
     `Director').
       ``(b) The Director shall--
       ``(1) compile the statistics referred to in subsection (a);
       ``(2) make the statistics available to the public; and
       ``(3) not later than October 31, 2002, and annually 
     thereafter, prepare, and submit to Congress a report 
     concerning the information collected under subsection (a) 
     that contains an analysis of the information.
       ``(c) The compilation required under subsection (b) shall--
       ``(1) be itemized, by chapter, with respect to title 11;
       ``(2) be presented in the aggregate and for each district; 
     and
       ``(3) include information concerning--
       ``(A) the total assets and total liabilities of the debtors 
     described in subsection (a), and in each category of assets 
     and liabilities, as reported in the schedules prescribed 
     pursuant to section 2075 of this title and filed by those 
     debtors;
       ``(B) the current monthly income, average income, and 
     average expenses of those debtors as reported on the 
     schedules and statements that each such debtor files under 
     sections 521 and 1322 of title 11;
       ``(C) the aggregate amount of debt discharged in the 
     reporting period, determined as the difference between the 
     total amount of debt and obligations of a debtor reported on 
     the schedules and the amount of such debt reported in 
     categories which are predominantly nondischargeable;
       ``(D) the average period of time between the filing of the 
     petition and the closing of the case;
       ``(E) for the reporting period--
       ``(i) the number of cases in which a reaffirmation was 
     filed; and
       ``(ii)(I) the total number of reaffirmations filed;
       ``(II) of those cases in which a reaffirmation was filed, 
     the number of cases in which the debtor was not represented 
     by an attorney; and
       ``(III) of those cases in which a reaffirmation was filed, 
     the number of cases in which the reaffirmation was approved 
     by the court;
       ``(F) with respect to cases filed under chapter 13 of title 
     11, for the reporting period--
       ``(i)(I) the number of cases in which a final order was 
     entered determining the value of property securing a claim in 
     an amount less than the amount of the claim; and
       ``(II) the number of final orders determining the value of 
     property securing a claim issued;
       ``(ii) the number of cases dismissed, the number of cases 
     dismissed for failure to make payments under the plan, the 
     number of cases refiled after dismissal, and the number of 
     cases in which the plan was completed, separately itemized 
     with respect to the number of modifications made before 
     completion of the plan, if any; and
       ``(iii) the number of cases in which the debtor filed 
     another case during the 6-year period preceding the filing;
       ``(G) the number of cases in which creditors were fined for 
     misconduct and any amount of punitive damages awarded by the 
     court for creditor misconduct; and
       ``(H) the number of cases in which sanctions under rule 
     9011 of the Federal Rules of Bankruptcy Procedure were 
     imposed against debtor's counsel or damages awarded under 
     such Rule.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     6 of title 28, United

[[Page 2584]]

     States Code, is amended by adding at the end the following:

``159. Bankruptcy statistics.''.

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

     SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY 
                   DATA.

       (a) Amendment.--Chapter 39 of title 28, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 589b. Bankruptcy data

       ``(a) Rules.--The Attorney General shall, within a 
     reasonable time after the effective date of this section, 
     issue rules requiring uniform forms for (and from time to 
     time thereafter to appropriately modify and approve)--
       ``(1) final reports by trustees in cases under chapters 7, 
     12, and 13 of title 11; and
       ``(2) periodic reports by debtors in possession or 
     trustees, as the case may be, in cases under chapter 11 of 
     title 11.
       ``(b) Reports.--Each report referred to in subsection (a) 
     shall be designed (and the requirements as to place and 
     manner of filing shall be established) so as to facilitate 
     compilation of data and maximum possible access of the 
     public, both by physical inspection at one or more central 
     filing locations, and by electronic access through the 
     Internet or other appropriate media.
       ``(c) Required Information.--The information required to be 
     filed in the reports referred to in subsection (b) shall be 
     that which is in the best interests of debtors and creditors, 
     and in the public interest in reasonable and adequate 
     information to evaluate the efficiency and practicality of 
     the Federal bankruptcy system. In issuing rules proposing the 
     forms referred to in subsection (a), the Attorney General 
     shall strike the best achievable practical balance between--
       ``(1) the reasonable needs of the public for information 
     about the operational results of the Federal bankruptcy 
     system;
       ``(2) economy, simplicity, and lack of undue burden on 
     persons with a duty to file reports; and
       ``(3) appropriate privacy concerns and safeguards.
       ``(d) Final Reports.--Final reports proposed for adoption 
     by trustees under chapters 7, 12, and 13 of title 11 shall, 
     in addition to such other matters as are required by law or 
     as the Attorney General in the discretion of the Attorney 
     General, shall propose, include with respect to a case under 
     such title--
       ``(1) information about the length of time the case was 
     pending;
       ``(2) assets abandoned;
       ``(3) assets exempted;
       ``(4) receipts and disbursements of the estate;
       ``(5) expenses of administration, including for use under 
     section 707(b), actual costs of administering cases under 
     chapter 13 of title 11;
       ``(6) claims asserted;
       ``(7) claims allowed; and
       ``(8) distributions to claimants and claims discharged 
     without payment

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

``589b. Bankruptcy data.''.

     SEC. 603. AUDIT PROCEDURES.

       (a) In General.--
       (1) Establishment of procedures.--The Attorney General (in 
     judicial districts served by United States trustees) and the 
     Judicial Conference of the United States (in judicial 
     districts served by bankruptcy administrators) shall 
     establish procedures to determine the accuracy, veracity, and 
     completeness of petitions, schedules, and other information 
     which the debtor is required to provide under sections 521 
     and 1322 of title 11, and, if applicable, section 111 of 
     title 11, in individual cases filed under chapter 7 or 13 of 
     such title. Such audits shall be in accordance with generally 
     accepted auditing standards and performed by independent 
     certified public accountants or independent licensed public 
     accountants, provided that the Attorney General and the 
     Judicial Conference, as appropriate, may develop alternative 
     auditing standards not later than 2 years after the date of 
     enactment of this Act.
       (2) Procedures.--Those procedures required by paragraph (1) 
     shall--
       (A) establish a method of selecting appropriate qualified 
     persons to contract to perform those audits;
       (B) establish a method of randomly selecting cases to be 
     audited, except that not less than 1 out of every 250 cases 
     in each Federal judicial district shall be selected for 
     audit;
       (C) require audits 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 district in 
     which the schedules were filed; and
       (D) establish procedures for providing, not less frequently 
     than annually, public information concerning the aggregate 
     results of such audits including the percentage of cases, by 
     district, in which a material misstatement of income or 
     expenditures is reported.
       (b) Amendments.--Section 586 of title 28, United States 
     Code, is amended--
       (1) in subsection (a), by striking paragraph (6) and 
     inserting the following:
       ``(6) make such reports as the Attorney General directs, 
     including the results of audits performed under section 
     603(a) of the Bankruptcy Abuse Prevention and Consumer 
     Protection Act of 2001; and''; and
       (2) by adding at the end the following:
       ``(f)(1) The United States trustee for each district is 
     authorized to contract with auditors to perform audits in 
     cases designated by the United States trustee, in accordance 
     with the procedures established under section 603(a) of the 
     Bankruptcy Abuse Prevention and Consumer Protection Act of 
     2001.
       ``(2)(A) The report of each audit referred to in paragraph 
     (1) shall be filed with the court and transmitted to the 
     United States trustee. Each report shall clearly and 
     conspicuously specify any material misstatement of income or 
     expenditures or of assets identified by the person performing 
     the audit. In any case in which a material misstatement of 
     income or expenditures or of assets has been reported, the 
     clerk of the bankruptcy court shall give notice of the 
     misstatement to the creditors in the case.
       ``(B) If a material misstatement of income or expenditures 
     or of assets is reported, the United States trustee shall--
       ``(i) report the material misstatement, if appropriate, to 
     the United States Attorney pursuant to section 3057 of title 
     18; and
       ``(ii) if advisable, take appropriate action, including but 
     not limited to commencing an adversary proceeding to revoke 
     the debtor's discharge pursuant to section 727(d) of title 
     11.''.
       (c) Amendments to Section 521 of Title 11, U.S.C.--Section 
     521(a) of title 11, United States Code, as so designated by 
     this Act, is amended in each of paragraphs (3) and (4) by 
     inserting ``or an auditor appointed under section 586(f) of 
     title 28'' after ``serving in the case''.
       (d) Amendments to Section 727 of Title 11, U.S.C.--Section 
     727(d) of title 11, United States Code, is amended--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(4) the debtor has failed to explain satisfactorily--
       ``(A) a material misstatement in an audit referred to in 
     section 586(f) of title 28; or
       ``(B) a failure to make available for inspection all 
     necessary accounts, papers, documents, financial records, 
     files, and all other papers, things, or property belonging to 
     the debtor that are requested for an audit referred to in 
     section 586(f) of title 28.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect 18 months after the date of enactment of 
     this Act.

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

       It is the sense of Congress that--
       (1) the national policy of the United States should be that 
     all data held by bankruptcy clerks in electronic form, to the 
     extent such data reflects only public records (as defined in 
     section 107 of title 11, United States Code), should be 
     released in a usable electronic form in bulk to the public, 
     subject to such appropriate privacy concerns and safeguards

[[Page 2585]]

     as Congress and the Judicial Conference of the United States 
     may determine; and
       (2) there should be established a bankruptcy data system in 
     which--
       (A) a single set of data definitions and forms are used to 
     collect data nationwide; and
       (B) data for any particular bankruptcy case are aggregated 
     in the same electronic record.

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

     SEC. 701. TREATMENT OF CERTAIN LIENS.

       (a) Treatment of Certain Liens.--Section 724 of title 11, 
     United States Code, is amended--
       (1) in subsection (b), in the matter preceding paragraph 
     (1), by inserting ``(other than to the extent that there is a 
     properly perfected unavoidable tax lien arising in connection 
     with an ad valorem tax on real or personal property of the 
     estate)'' after ``under this title'';
       (2) in subsection (b)(2), by inserting ``(except that such 
     expenses, other than claims for wages, salaries, or 
     commissions 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)(4).
       ``(2) Claims for contributions to an employee benefit plan 
     entitled to priority under section 507(a)(5).''.
       (b) Determination of Tax Liability.--Section 505(a)(2) of 
     title 11, United States Code, is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the amount or legality of any amount arising in 
     connection with an ad valorem tax on real or personal 
     property of the estate, if the applicable period for 
     contesting or redetermining that amount under any law (other 
     than a bankruptcy law) has expired.''.

     SEC. 702. TREATMENT OF FUEL TAX CLAIMS.

       Section 501 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) A claim arising from the liability of a debtor for 
     fuel use tax assessed consistent with the requirements of 
     section 31705 of title 49 may be filed by the base 
     jurisdiction designated pursuant to the International Fuel 
     Tax Agreement and, if so filed, shall be allowed as a single 
     claim.''.

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

       Section 505(b) of title 11, United States Code, is 
     amended--
       (1) in the first sentence, by inserting ``at the address 
     and in the manner designated in paragraph (1)'' after 
     ``determination of such tax'';
       (2) by striking ``(1) upon payment'' and inserting ``(A) 
     upon payment'';
       (3) by striking ``(A) such governmental unit'' and 
     inserting ``(i) such governmental unit'';
       (4) by striking ``(B) such governmental unit'' and 
     inserting ``(ii) such governmental unit'';
       (5) by striking ``(2) upon payment'' and inserting ``(B) 
     upon payment'';
       (6) by striking ``(3) upon payment'' and inserting ``(C) 
     upon payment'';
       (7) by striking ``(b)'' and inserting ``(2)''; and
       (8) by inserting before paragraph (2), as so designated, 
     the following:
       ``(b)(1)(A) The clerk of each district shall maintain a 
     listing under which a Federal, State, or local governmental 
     unit responsible for the collection of taxes within the 
     district may--
       ``(i) designate an address for service of requests under 
     this subsection; and
       ``(ii) describe where further information concerning 
     additional requirements for filing such requests may be 
     found.
       ``(B) If a governmental unit referred to in subparagraph 
     (A) does not designate an address and provide that address to 
     the clerk under that subparagraph, any request made under 
     this subsection may be served at the address for the filing 
     of a tax return or protest with the appropriate taxing 
     authority of that governmental unit.''.

     SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

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

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

       ``(a) If any provision of this title requires the payment 
     of interest on a tax claim or on an administrative expense 
     tax, or the payment of interest to enable a creditor to 
     receive the present value of the allowed amount of a tax 
     claim, the rate of interest shall be the rate determined 
     under applicable nonbankruptcy law.
       ``(b) In the case of taxes paid under a confirmed plan 
     under this title, the rate of interest shall be determined as 
     of the calendar month in which the plan is confirmed.''.
       (b) Clerical Amendment.--The table of sections for 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. PRIORITY OF TAX CLAIMS.

       Section 507(a)(8) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A)--
       (A) in the matter preceding clause (i), by inserting ``for 
     a taxable year ending on or before the date of filing of the 
     petition'' after ``gross receipts'';
       (B) in clause (i), by striking ``for a taxable year ending 
     on or before the date of filing of the petition''; and
       (C) by striking clause (ii) and inserting the following:
       ``(ii) assessed within 240 days before the date of the 
     filing of the petition, exclusive of--

       ``(I) any time during which an offer in compromise with 
     respect to that tax was pending or in effect during that 240-
     day period, plus 30 days; and
       ``(II) any time during which a stay of proceedings against 
     collections was in effect in a prior case under this title 
     during that 240-day period; plus 90 days.''; and

       (2) by adding at the end the following:
     ``An otherwise applicable time period specified in this 
     paragraph shall be suspended for (i) any period during which 
     a governmental unit is prohibited under applicable 
     nonbankruptcy law from collecting a tax as a result of a 
     request by the debtor for a hearing and an appeal of any 
     collection action taken or proposed against the debtor, plus 
     90 days; plus (ii) any time during which the stay of 
     proceedings was in effect in a prior case under this title or 
     during which collection was precluded by the existence of 1 
     or more confirmed plans under this title, plus 90 days.''.

     SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

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

     SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 13.

       Section 1328(a)(2) of title 11, United States Code, as 
     amended by section 314 of this Act, is amended by striking 
     ``paragraph'' and inserting ``section 507(a)(8)(C) or in 
     paragraph (1)(B), (1)(C),''.

     SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 11.

       Section 1141(d) of title 11, United States Code, as amended 
     by this Act, is amended by adding at the end the following:
       ``(6) Notwithstanding paragraph (1), the confirmation of a 
     plan does not discharge a debtor that is a corporation from 
     any debt described in section 523(a)(2) or 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 LIMITED TO PREPETITION 
                   TAXES.

       Section 362(a)(8) of title 11, United States Code, is 
     amended by striking ``the debtor'' and inserting ``a 
     corporate debtor's tax liability for a taxable period the 
     bankruptcy court may determine or concerning an individual 
     debtor's tax liability for a taxable period ending before the 
     order for relief under this title''.

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

       Section 1129(a)(9) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (B), by striking ``and'' at the end;
       (2) in subparagraph (C), by striking ``deferred cash 
     payments,'' and all that follows through the end of the 
     subparagraph, and inserting ``regular installment payments in 
     cash--
       ``(i) of a total value, as of the effective date of the 
     plan, equal to the allowed amount of such claim;
       ``(ii) over a period ending not later than 5 years after 
     the date of the entry of the order for relief under section 
     301, 302, or 303; and
       ``(iii) in a manner not less favorable than the most 
     favored nonpriority unsecured claim provided for in the plan 
     (other than cash payments made to a class of creditors under 
     section 1122(b)); and''; and
       (3) by adding at the end the following:
       ``(D) with respect to a secured claim which would otherwise 
     meet the description of an unsecured claim of a governmental 
     unit under section 507(a)(8), but for the secured status of 
     that claim, the holder of that claim will receive on account 
     of that claim, cash payments, in the same manner and over the 
     same period, as prescribed in subparagraph (C).''.

[[Page 2586]]



     SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

       Section 545(2) of title 11, United States Code, is amended 
     by inserting before the semicolon at the end the following: 
     ``, except in any case in which a purchaser is a purchaser 
     described in section 6323 of the Internal Revenue Code of 
     1986, or in any other similar provision of State or local 
     law''.

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

       (a) Payment of Taxes Required.--Section 960 of title 28, 
     United States Code, is amended--
       (1) by inserting ``(a)'' before ``Any''; and
       (2) by adding at the end the following:
       ``(b) A tax under subsection (a) shall be paid on or before 
     the due date of the tax under applicable nonbankruptcy law, 
     unless--
       ``(1) the tax is a property tax secured by a lien against 
     property that is abandoned 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, an order of the court 
     makes a finding of probable insufficiency of funds of the 
     estate to pay in full the administrative expenses allowed 
     under section 503(b) of title 11 that have the same priority 
     in distribution under section 726(b) of title 11 as the 
     priority of that tax.''.
       (b) Payment of Ad Valorem Taxes Required.--Section 
     503(b)(1)(B)(i) of title 11, United States Code, is amended 
     by inserting ``whether secured or unsecured, including 
     property taxes for which liability is in rem, in personam, or 
     both,'' before ``except''.
       (c) Request for Payment of Administrative Expense Taxes 
     Eliminated.--Section 503(b)(1) of title 11, United States 
     Code, is amended--
       (1) in subparagraph (B), by striking ``and'' at the end;
       (2) in subparagraph (C), by adding ``and'' at the end; and
       (3) by adding at the end the following:
       ``(D) notwithstanding the requirements of subsection (a), a 
     governmental unit shall not be required to file a request for 
     the payment of an expense described in subparagraph (B) or 
     (C), as a condition of its being an allowed administrative 
     expense;''.
       (d) Payment of Taxes and Fees as Secured Claims.--Section 
     506 of title 11, United States Code, is amended--
       (1) in subsection (b), by inserting ``or State statute'' 
     after ``agreement''; and
       (2) in subsection (c), by inserting ``, including the 
     payment of all ad valorem property taxes with respect to the 
     property'' before the period at the end.

     SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.

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

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

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

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

       Section 505(b)(2) of title 11, United States Code, as 
     amended by 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 this Act, is amended by adding at the end 
     the following:
       ``(9) the debtor has filed all applicable Federal, State, 
     and local tax returns as required by section 1308.''.
       (b) Additional Time Permitted for Filing Tax Returns.--
       (1) In general.--Subchapter I of chapter 13 of title 11, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 1308. Filing of prepetition tax returns

       ``(a) Not later than the day before the date on which the 
     meeting of the creditors is first scheduled to be held under 
     section 341(a), if the debtor was required to file a tax 
     return under applicable nonbankruptcy law, the debtor shall 
     file with appropriate tax authorities all tax returns for all 
     taxable periods ending during the 4-year period ending on the 
     date of the filing of the petition.
       ``(b)(1) Subject to paragraph (2), if the tax returns 
     required by subsection (a) have not been filed by the date on 
     which the meeting of creditors is first scheduled to be held 
     under section 341(a), the trustee may hold open that meeting 
     for a reasonable period of time to allow the debtor an 
     additional period of time to file any unfiled returns, but 
     such additional period of time shall not extend beyond--
       ``(A) for any return that is past due as of the date of the 
     filing of the petition, the date that is 120 days after the 
     date of that meeting; or
       ``(B) for any return that is not past due as of the date of 
     the filing of the petition, the later of--
       ``(i) the date that is 120 days after the date of that 
     meeting; or
       ``(ii) the date on which the return is due under the last 
     automatic extension of time for filing that return to which 
     the debtor is entitled, and for which request is timely made, 
     in accordance with applicable nonbankruptcy law.
       ``(2) Upon notice and hearing, and order entered before the 
     tolling of any applicable filing period determined under this 
     subsection, if the debtor demonstrates by a preponderance of 
     the evidence that the failure to file a return as required 
     under this subsection is attributable to circumstances beyond 
     the control of the debtor, the court may extend the filing 
     period established by the trustee under this subsection for--
       ``(A) a period of not more than 30 days for returns 
     described in paragraph (1); and
       ``(B) a period not to extend after the applicable extended 
     due date for a return described in paragraph (2).
       ``(c) For purposes of this section, the term `return' 
     includes a return prepared pursuant to subsection (a) or (b) 
     of section 6020 of the Internal Revenue Code of 1986, or a 
     similar State or local law, or a written stipulation to a 
     judgment or a final order entered by a nonbankruptcy 
     tribunal.''.
       (2) Conforming amendment.--The table of sections at the 
     beginning of chapter 13 of title 11, United States Code, is 
     amended by inserting after the item relating to section 1307 
     the following:

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

     SEC. 717. STANDARDS FOR TAX DISCLOSURE.

       Section 1125(a)(1) of title 11, United States Code, is 
     amended--

[[Page 2587]]

       (1) by inserting ``including a discussion of the potential 
     material Federal tax consequences of the plan to the debtor, 
     any successor to the debtor, and a hypothetical investor 
     typical of the holders of claims or interests in the case,'' 
     after ``records''; and
       (2) by striking ``a hypothetical reasonable investor 
     typical of holders of claims or interests'' and inserting 
     ``such a hypothetical investor''.

     SEC. 718. SETOFF OF TAX REFUNDS.

       Section 362(b) of title 11, United States Code, is amended 
     by inserting after paragraph (26), as added by this Act, the 
     following:
       ``(27) under subsection (a), of the setoff under applicable 
     nonbankruptcy law of an income tax refund, by a governmental 
     unit, with respect to a taxable period that ended before the 
     order for relief against an income tax liability for a 
     taxable period that also ended before the order for relief, 
     except that in any case in which the setoff of an income tax 
     refund is not permitted under applicable nonbankruptcy law 
     because of a pending action to determine the amount or 
     legality of a tax liability, the governmental unit may hold 
     the refund pending the resolution of the action, unless the 
     court, upon motion of the trustee and after notice and 
     hearing, grants the taxing authority adequate protection 
     (within the meaning of section 361) for the secured claim of 
     that authority in the setoff under section 506(a);''.

     SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF 
                   STATE AND LOCAL TAXES.

       (a) In General.--Section 346 of title 11, United States 
     Code, is amended to read as follows:

     ``Sec. 346. Special provisions related to the treatment of 
       state and local taxes

       ``(a) Whenever the Internal Revenue Code of 1986 provides 
     that a separate taxable estate or entity is created in a case 
     concerning a debtor under this title, and the income, gain, 
     loss, deductions, and credits of such estate shall be taxed 
     to or claimed by the estate, a separate taxable estate is 
     also created for purposes of any State and local law imposing 
     a tax on or measured by income and such income, gain, loss, 
     deductions, and credits shall be taxed to or claimed by the 
     estate and may not be taxed to or claimed by the debtor. The 
     preceding sentence shall not apply if the case is dismissed. 
     The trustee shall make tax returns of income required under 
     any such State or local law.
       ``(b) Whenever the Internal Revenue Code of 1986 provides 
     that no separate taxable estate shall be created in a case 
     concerning a debtor under this title, and the income, gain, 
     loss, deductions, and credits of an estate shall be taxed to 
     or claimed by the debtor, such income, gain, loss, 
     deductions, and credits shall be taxed to or claimed by the 
     debtor under a State or local law imposing a tax on or 
     measured by income and may not be taxed to or claimed by the 
     estate. The trustee shall make such tax returns of income of 
     corporations and of partnerships as are required under any 
     State or local law, but with respect to partnerships, shall 
     make said returns only to the extent such returns are also 
     required to be made under such Code. The estate shall be 
     liable for any tax imposed on such corporation or 
     partnership, but not for any tax imposed on partners or 
     members.
       ``(c) With respect to a partnership or any entity treated 
     as a partnership under a State or local law imposing a tax on 
     or measured by income that is a debtor in a case under this 
     title, any gain or loss resulting from a distribution of 
     property from such partnership, or any distributive share of 
     any income, gain, loss, deduction, or credit of a partner or 
     member that is distributed, or considered distributed, from 
     such partnership, after the commencement of the case, is 
     gain, loss, income, deduction, or credit, as the case may be, 
     of the partner or member, and if such partner or member is a 
     debtor in a case under this title, shall be subject to tax in 
     accordance with subsection (a) or (b).
       ``(d) For purposes of any State or local law imposing a tax 
     on or measured by income, the taxable period of a debtor in a 
     case under this title shall terminate only if and to the 
     extent that the taxable period of such debtor terminates 
     under the Internal Revenue Code of 1986.
       ``(e) The estate in any case described in subsection (a) 
     shall use the same accounting method as the debtor used 
     immediately before the commencement of the case, if such 
     method of accounting complies with applicable nonbankruptcy 
     tax law.
       ``(f) For purposes of any State or local law imposing a tax 
     on or measured by income, a transfer of property from the 
     debtor to the estate or from the estate to the debtor shall 
     not be treated as a disposition for purposes of any provision 
     assigning tax consequences to a disposition, except to the 
     extent that such transfer is treated as a disposition under 
     the Internal Revenue Code of 1986.
       ``(g) Whenever a tax is imposed pursuant to a State or 
     local law imposing a tax on or measured by income pursuant to 
     subsection (a) or (b), such tax shall be imposed at rates 
     generally applicable to the same types of entities under such 
     State or local law.
       ``(h) The trustee shall withhold from any payment of claims 
     for wages, salaries, commissions, dividends, interest, or 
     other payments, or collect, any amount required to be 
     withheld or collected under applicable State or local tax 
     law, and shall pay such withheld or collected amount to the 
     appropriate governmental unit at the time and in the manner 
     required by such tax law, and with the same priority as the 
     claim from which such amount was withheld or collected was 
     paid.
       ``(i)(1) To the extent that any State or local law imposing 
     a tax on or measured by income provides for the carryover of 
     any tax attribute from one taxable period to a subsequent 
     taxable period, the estate shall succeed to such tax 
     attribute in any case in which such estate is subject to tax 
     under subsection (a).
       ``(2) After such a case is closed or dismissed, the debtor 
     shall succeed to any tax attribute to which the estate 
     succeeded under paragraph (1) to the extent consistent with 
     the Internal Revenue Code of 1986.
       ``(3) The estate may carry back any loss or tax attribute 
     to a taxable period of the debtor that ended before the order 
     for relief under this title to the extent that--
       ``(A) applicable State or local tax law provides for a 
     carryback in the case of the debtor; and
       ``(B) the same or a similar tax attribute may be carried 
     back by the estate to such a taxable period of the debtor 
     under the Internal Revenue Code of 1986.
       ``(j)(1) For purposes of any State or local law imposing a 
     tax on or measured by income, income is not realized by the 
     estate, the debtor, or a successor to the debtor by reason of 
     discharge of indebtedness in a case under this title, except 
     to the extent, if any, that such income is subject to tax 
     under the Internal Revenue Code of 1986.
       ``(2) Whenever the Internal Revenue Code of 1986 provides 
     that the amount excluded from gross income in respect of the 
     discharge of indebtedness in a case under this title shall be 
     applied to reduce the tax attributes of the debtor or the 
     estate, a similar reduction shall be made under any State or 
     local law imposing a tax on or measured by income to the 
     extent such State or local law recognizes such attributes. 
     Such State or local law may also provide for the reduction of 
     other attributes to the extent that the full amount of income 
     from the discharge of indebtedness has not been applied.
       ``(k)(1) Except as provided in this section and section 
     505, the time and manner of filing tax returns and the items 
     of income, gain, loss, deduction, and credit of any taxpayer 
     shall be determined under applicable nonbankruptcy law.
       ``(2) For Federal tax purposes, the provisions of this 
     section are subject to the Internal Revenue Code of 1986 and 
     other applicable Federal nonbankruptcy law.''.
       (b) Conforming Amendments.--
       (1) Section 728 of title 11, United States Code, is 
     repealed.
       (2) Section 1146 of title 11, United States Code, is 
     amended--
       (A) by striking subsections (a) and (b); and
       (B) by redesignating subsections (c) and (d) as subsections 
     (a) and (b), respectively.
       (3) Section 1231 of title 11, United States Code, is 
     amended--
       (A) by striking subsections (a) and (b); and
       (B) by redesignating subsections (c) and (d) as subsections 
     (a) and (b), respectively.

     SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RETURNS.

       Section 521 of title 11, United States Code, as amended by 
     this Act, is amended by adding at the end the following:
       ``(k)(1) Notwithstanding any other provision of this title, 
     if the debtor fails to file a tax return that becomes due 
     after the commencement of the case or to properly obtain an 
     extension of the due date for filing such return, the taxing 
     authority may request that the court enter an order 
     converting or dismissing the case.
       ``(2) If the debtor does not file the required return or 
     obtain the extension referred to in paragraph (1) within 90 
     days after a request is filed by the taxing authority under 
     that paragraph, the court shall convert or dismiss the case, 
     whichever is in the best interests of creditors and the 
     estate.''.

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

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

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

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

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

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

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

``1509. Right of direct access.
``1510. Limited jurisdiction.
``1511. Commencement of case under section 301 or 303.

[[Page 2588]]

``1512. Participation of a foreign representative in a case under this 
              title.
``1513. Access of foreign creditors to a case under this title.
``1514. Notification to foreign creditors concerning a case under this 
              title.

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

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

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

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

     ``Sec. 1501. Purpose and scope of application

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

     ``Sec. 1502. Definitions

       ``For the purposes of this chapter, the term--
       ``(1) `debtor' means an entity that is the subject of a 
     foreign proceeding;
       ``(2) `establishment' means any place of operations where 
     the debtor carries out a nontransitory economic activity;
       ``(3) `foreign court' means a judicial or other authority 
     competent to control or supervise a foreign proceeding;
       ``(4) `foreign main proceeding' means a foreign proceeding 
     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;


       ``(7) `recognition' means the entry of an order granting 
     recognition of a foreign main proceeding or foreign nonmain 
     proceeding under this chapter; and
       ``(8) `within the territorial jurisdiction of the United 
     States', when used with reference to property of a debtor, 
     refers to tangible property located within the territory of 
     the United States and intangible property deemed under 
     applicable nonbankruptcy law to be located within that 
     territory, including any property subject to attachment or 
     garnishment that may properly be seized or garnished by an 
     action in a Federal or State court in the United States.

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

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

     ``Sec. 1504. Commencement of ancillary case

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

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

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

     ``Sec. 1506. Public policy exception

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

     ``Sec. 1507. Additional assistance

       ``(a) Subject to the specific limitations stated elsewhere 
     in this chapter the court, if recognition is granted, may 
     provide additional assistance to a foreign representative 
     under this title or under other laws of the United States.
       ``(b) In determining whether to provide additional 
     assistance under this title or under other laws of the United 
     States, the court shall consider whether such additional 
     assistance, consistent with the principles of comity, will 
     reasonably assure--
       ``(1) just treatment of all holders of claims against or 
     interests in the debtor's property;
       ``(2) protection of claim holders in the United States 
     against prejudice and inconvenience in the processing of 
     claims in such foreign proceeding;
       ``(3) prevention of preferential or fraudulent dispositions 
     of property of the debtor;
       ``(4) distribution of proceeds of the debtor's property 
     substantially in accordance with the order prescribed by this 
     title; and
       ``(5) if appropriate, the provision of an opportunity for a 
     fresh start for the individual that such foreign proceeding 
     concerns.

     ``Sec. 1508. Interpretation

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

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

     ``Sec. 1509. Right of direct access

       ``(a) A foreign representative may commence a case under 
     section 1504 by filing directly with the court a petition for 
     recognition of a foreign proceeding under section 1515.
       ``(b) If the court grants recognition under section 1515, 
     and subject to any limitations that the court may impose 
     consistent with the policy of this chapter--
       ``(1) the foreign representative has the capacity to sue 
     and be sued in a court in the United States;
       ``(2) the foreign representative may apply directly to a 
     court in the United States for appropriate relief in that 
     court; and
       ``(3) a court in the United States shall grant comity or 
     cooperation to the foreign representative.
       ``(c) A request for comity or cooperation by a foreign 
     representative in a court in the United States other than the 
     court which granted recognition shall be accompanied by a 
     certified copy of an order granting recognition under section 
     1517.
       ``(d) If the court denies recognition under this chapter, 
     the court may issue any appropriate order necessary to 
     prevent the foreign representative from obtaining comity or 
     cooperation from courts in the United States.

[[Page 2589]]

       ``(e) Whether or not the court grants recognition, and 
     subject to sections 306 and 1510, a foreign representative is 
     subject to applicable nonbankruptcy law.
       ``(f) Notwithstanding any other provision of this section, 
     the failure of a foreign representative to commence a case or 
     to obtain recognition under this chapter does not affect any 
     right the foreign representative may have to sue in a court 
     in the United States to collect or recover a claim which is 
     the property of the debtor.

     ``Sec. 1510. Limited jurisdiction

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

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

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

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

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

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

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

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

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

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

     ``Sec. 1515. Application for recognition

       ``(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) shall be translated into English. The court 
     may require a translation into English of additional 
     documents.

     ``Sec. 1516. Presumptions concerning recognition

       ``(a) If the decision or certificate referred to in section 
     1515(b) indicates that the foreign proceeding is a foreign 
     proceeding (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 granting recognition

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

     ``Sec. 1518. Subsequent information

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

     ``Sec. 1519. Relief that may be granted upon filing petition 
       for recognition

       ``(a) From the time of filing a petition for recognition 
     until the court rules on the petition, the court may, at the 
     request of the foreign representative, where relief is 
     urgently needed to protect the assets of the debtor or the 
     interests of the creditors, grant relief of a provisional 
     nature, including--
       ``(1) staying execution against the debtor's assets;
       ``(2) entrusting the administration or realization of all 
     or part of the debtor's assets located in the United States 
     to the foreign representative or another person authorized by 
     the court, including an examiner, in order to protect and 
     preserve the value of assets that, by their nature or because 
     of other circumstances, are perishable, susceptible to 
     devaluation or otherwise in jeopardy; and
       ``(3) any relief referred to in paragraph (3), (4), or (7) 
     of section 1521(a).
       ``(b) Unless extended under section 1521(a)(6), the relief 
     granted under this section terminates when the petition for 
     recognition is granted.
       ``(c) It is a ground for denial of relief under this 
     section that such relief would interfere with the 
     administration of a foreign main proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under this section.
       ``(f) The exercise of rights not subject to the stay 
     arising under section 362(a) pursuant to paragraph (6), (7), 
     (17), or (28) of section 362(b) or pursuant to section 362(l) 
     shall not be stayed by any order of a court or administrative 
     agency in any proceeding under this chapter.

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

       ``(a) Upon recognition of a foreign proceeding that is a 
     foreign main proceeding--

[[Page 2590]]

       ``(1) sections 361 and 362 apply with respect to the debtor 
     and that property of the debtor that is within the 
     territorial jurisdiction of the United States;
       ``(2) sections 363, 549, and 552 of this title apply to a 
     transfer of an interest of the debtor in property that is 
     within the territorial jurisdiction of the United States to 
     the same extent that the sections would apply to property of 
     an estate;
       ``(3) unless the court orders otherwise, the foreign 
     representative may operate the debtor's business and may 
     exercise the rights and powers of a trustee under and to the 
     extent provided by sections 363 and 552; and
       ``(4) section 552 applies to property of the debtor that is 
     within the territorial jurisdiction of the United States.
       ``(b) Subsection (a) does not affect the right to commence 
     an individual action or proceeding in a foreign country to 
     the extent necessary to preserve a claim against the debtor.
       ``(c) Subsection (a) does not affect the right of a foreign 
     representative or an entity to file a petition commencing a 
     case under this title or the right of any party to file 
     claims or take other proper actions in such a case.

     ``Sec. 1521. Relief that may be granted upon recognition

       ``(a) Upon recognition of a foreign proceeding, whether 
     main or nonmain, where necessary to effectuate the purpose of 
     this chapter and to protect the assets of the debtor or the 
     interests of the creditors, the court may, at the request 
     of the foreign representative, grant any appropriate 
     relief, including--
       ``(1) staying the commencement or continuation of an 
     individual action or proceeding concerning the debtor's 
     assets, rights, obligations or liabilities to the extent they 
     have not been stayed under section 1520(a);
       ``(2) staying execution against the debtor's assets to the 
     extent it has not been stayed under section 1520(a);
       ``(3) suspending the right to transfer, encumber or 
     otherwise dispose of any assets of the debtor to the extent 
     this right has not been suspended under section 1520(a);
       ``(4) providing for the examination of witnesses, the 
     taking of evidence or the delivery of information concerning 
     the debtor's assets, affairs, rights, obligations or 
     liabilities;
       ``(5) entrusting the administration or realization of all 
     or part of the debtor's assets within the territorial 
     jurisdiction of the United States to the foreign 
     representative or another person, including an examiner, 
     authorized by the court;
       ``(6) extending relief granted under section 1519(a); and
       ``(7) granting any additional relief that may be available 
     to a trustee, except for relief available under sections 522, 
     544, 545, 547, 548, 550, and 724(a).
       ``(b) Upon recognition of a foreign proceeding, whether 
     main or nonmain, the court may, at the request of the foreign 
     representative, entrust the distribution of all or part of 
     the debtor's assets located in the United States to the 
     foreign representative or another person, including an 
     examiner, authorized by the court, provided that the court is 
     satisfied that the interests of creditors in the United 
     States are sufficiently protected.
       ``(c) In granting relief under this section to a 
     representative of a foreign nonmain proceeding, the court 
     must be satisfied that the relief relates to assets that, 
     under the law of the United States, should be administered in 
     the foreign nonmain proceeding or concerns information 
     required in that proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under paragraphs (1), 
     (2), (3), and (6) of subsection (a).
       ``(f) The exercise of rights not subject to the stay 
     arising under section 362(a) pursuant to paragraph (6), (7), 
     (17), or (28) of section 362(b) or pursuant to section 362(l) 
     shall not be stayed by any order of a court or administrative 
     agency in any proceeding under this chapter.

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

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

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

       ``(a) Upon recognition of a foreign proceeding, the foreign 
     representative has standing in a case concerning the debtor 
     pending under another chapter of this title to initiate 
     actions under sections 522, 544, 545, 547, 548, 550, 553, and 
     724(a).
       ``(b) When the foreign proceeding is a foreign nonmain 
     proceeding, the court must be satisfied that an action under 
     subsection (a) relates to assets that, under United States 
     law, should be administered in the foreign nonmain 
     proceeding.

     ``Sec. 1524. Intervention by a foreign representative

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

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

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

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

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

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

     ``Sec. 1527. Forms of cooperation

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

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

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

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

[[Page 2591]]

     be administered in the foreign nonmain proceeding or concerns 
     information required in that proceeding.
       ``(4) In achieving cooperation and coordination under 
     sections 1528 and 1529, the court may grant any of the relief 
     authorized under section 305.

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

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

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

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

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

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

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

     SEC. 802. OTHER AMENDMENTS TO TITLES 11 AND 28, UNITED STATES 
                   CODE.

       (a) Applicability of Chapters.--Section 103 of title 11, 
     United States Code, is amended--
       (1) in subsection (a), by inserting before the period the 
     following: ``, and this chapter, sections 307, 362(l), 555 
     through 557, and 559 through 562 apply in a case under 
     chapter 15''; and
       (2) by adding at the end the following:
       ``(j) Chapter 15 applies only in a case under such chapter, 
     except that--
       ``(1) sections 1505, 1513, and 1514 apply in all cases 
     under this title; and
       ``(2) section 1509 applies whether or not a case under this 
     title is pending.''.
       (b) Definitions.--Section 101 of title 11, United States 
     Code, is amended by striking paragraphs (23) and (24) and 
     inserting the following:
       ``(23) `foreign proceeding' means a collective judicial or 
     administrative proceeding in a foreign country, including an 
     interim proceeding, under a law relating to insolvency or 
     adjustment of debt in which proceeding the assets and affairs 
     of the debtor are subject to control or supervision by a 
     foreign court, for the purpose of reorganization or 
     liquidation;
       ``(24) `foreign representative' means a person or body, 
     including a person or body appointed on an interim basis, 
     authorized in a foreign proceeding to administer the 
     reorganization or the liquidation of the debtor's assets or 
     affairs or to act as a representative of the foreign 
     proceeding;''.
       (c) Amendments to Title 28, United States Code.--
       (1) Procedures.--Section 157(b)(2) of title 28, United 
     States Code, is amended--
       (A) in subparagraph (N), by striking ``and'' at the end;
       (B) in subparagraph (O), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(P) recognition of foreign proceedings and other matters 
     under chapter 15 of title 11.''.
       (2) Bankruptcy cases and proceedings.--Section 1334(c) of 
     title 28, United States Code, is amended by striking 
     ``Nothing in'' and inserting ``Except with respect to a case 
     under chapter 15 of title 11, nothing in''.
       (3) Duties of trustees.--Section 586(a)(3) of title 28, 
     United States Code, is amended by striking ``or 13'' and 
     inserting ``13, or 15,''.
       (4) Venue of cases ancillary to foreign proceedings.--
     Section 1410 of title 28, United States Code, is amended to 
     read as follows:

     ``Sec. 1410. Venue of cases ancillary to foreign proceedings

       ``A case under chapter 15 of title 11 may be commenced in 
     the district court for the district--
       ``(1) in which the debtor has its principal place of 
     business or principal assets in the United States;
       ``(2) if the debtor does not have a place of business or 
     assets in the United States, in which there is pending 
     against the debtor an action or proceeding in a Federal or 
     State court; or
       ``(3) in a case other than those specified in paragraph (1) 
     or (2), in which venue will be consistent with the interests 
     of justice and the convenience of the parties, having regard 
     to the relief sought by the foreign representative.''.
       (d) Other Sections of Title 11.--
       (1) Section 109(b)(3) of title 11, United States Code, is 
     amended to read as follows:
       ``(3)(A) a foreign insurance company, engaged in such 
     business in the United States; or
       ``(B) a foreign bank, savings bank, cooperative bank, 
     savings and loan association, building and loan association, 
     or credit union, that has a branch or agency (as defined in 
     section 1(b) of the International Banking Act of 1978 (12 
     U.S.C. 3101) in the United States.''.
       (2) Section 303(k) of title 11, United States Code, is 
     repealed.
       (3)(A) Section 304 of title 11, United States Code, is 
     repealed.
       (B) The table of sections at the beginning of chapter 3 of 
     title 11, United States Code, is amended by striking the item 
     relating to section 304.
       (C) Section 306 of title 11, United States Code, is amended 
     by striking ``, 304,'' each place it appears.
       (4) Section 305(a)(2) of title 11, United States Code, is 
     amended to read as follows:
       ``(2)(A) a petition under section 1515 of this title for 
     recognition of a foreign proceeding has been granted; and
       ``(B) the purposes of chapter 15 of this title would be 
     best served by such dismissal or suspension.''.
       (5) Section 508 of title 11, United States Code, is 
     amended--
       (A) by striking subsection (a); and
       (B) in subsection (b), by striking ``(b)''.

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

     SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR 
                   RECEIVERS OF INSURED DEPOSITORY INSTITUTIONS.

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

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, loan, interest, group or index, or option;
       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan unless the Corporation determines by regulation, 
     resolution, or order to include any such agreement within the 
     meaning of such term;
       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, certificates of deposit, or mortgage loans or 
     interests therein (including any interest therein or based on 
     the value thereof) or option on any of the foregoing, 
     including any option to purchase or sell any such security, 
     certificate of deposit, loan, interest, group or index or 
     option;
       ``(V) means any margin loan;
       ``(VI) means any other agreement or transaction that is 
     similar to any agreement or transaction referred to in this 
     clause;
       ``(VII) means any combination of the agreements or 
     transactions referred to in this clause;
       ``(VIII) means any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     (IV), (V), (VI), (VII), or (VIII), together with all 
     supplements to any such master agreement, without regard to 
     whether the master agreement provides for an agreement or 
     transaction that is not a securities contract under this 
     clause, except that the master agreement shall be considered 
     to be a securities contract under this clause only with 
     respect to each agreement or transaction under the master 
     agreement that is referred to in subclause (I), (III), (IV), 
     (V), (VI), (VII), or (VIII); and

[[Page 2592]]

       ``(X) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this clause.''.

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

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

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

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date the contract 
     is entered into, including, a repurchase transaction, reverse 
     repurchase transaction, consignment, lease, swap, hedge 
     transaction, deposit, loan, option, allocated transaction, 
     unallocated transaction, or any other similar agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);
       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or
       ``(V) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV).''.

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

       ``(I) means an agreement, including related terms, which 
     provides for the transfer of one or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in the Securities Exchange Act of 1934), mortgage loans, 
     interests in mortgage-related securities or mortgage loans, 
     eligible bankers' acceptances, qualified foreign government 
     securities or securities that are direct obligations of, or 
     that are fully guaranteed by, the United States or any agency 
     of the United States against the transfer of funds by the 
     transferee of such certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests with a 
     simultaneous agreement by such transferee to transfer to the 
     transferor thereof certificates of deposit, eligible bankers' 
     acceptances, securities, loans, or interests as described 
     above, at a date certain not later than 1 year after such 
     transfers or on demand, against the transfer of funds, or any 
     other similar agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan unless the 
     Corporation determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;

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

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

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a credit spread or credit swap, option, 
     future, or forward agreement; a commodity index or commodity 
     swap, option, future, or forward agreement; or a weather 
     swap, weather derivative, or weather option;
       ``(II) any agreement or transaction similar to any other 
     agreement or transaction referred to in this clause that is 
     presently, or in the future becomes, regularly entered into 
     in the swap market (including terms and conditions 
     incorporated by reference in such agreement) and that is a 
     forward, swap, future, or option on one or more rates, 
     currencies, commodities, equity securities or other equity 
     instruments, debt securities or other debt instruments, or 
     economic indices or measures of economic risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and

       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in subparagraph (I), (II), (III), (IV), or (V).

     Such term is applicable for purposes of this title only and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     and the regulations promulgated by the Securities and 
     Exchange Commission or the Commodity Futures Trading 
     Commission.''.
       (g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of 
     the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)(D)(viii)) is amended to read as follows:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property

[[Page 2593]]

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

     SEC. 902. AUTHORITY OF THE CORPORATION WITH RESPECT TO FAILED 
                   AND FAILING INSTITUTIONS.

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

     SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED 
                   FINANCIAL CONTRACTS.

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

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

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

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

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

       ``(I) immediately upon the organization of the institution; 
     or

[[Page 2594]]

       ``(II) at the time of a purchase and assumption transaction 
     between the depository institution and the Corporation as 
     receiver for a depository institution in default.''.

     SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION 
                   OF QUALIFIED FINANCIAL CONTRACTS.

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

     SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.

       Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as 
     follows:
       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.''.

     SEC. 906. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT 
                   ACT OF 1991.

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

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

       ``(a) In General.--Notwithstanding any other provision of 
     law, paragraphs (8), (9), (10), and (11) of section 11(e) of 
     the Federal Deposit Insurance Act shall apply to an uninsured 
     national bank or uninsured Federal branch or Federal agency, 
     except that for such purpose--
       ``(1) any reference to the `Corporation as receiver' or 
     `the receiver or the Corporation' shall refer to the receiver 
     of an uninsured national bank or uninsured Federal branch or 
     Federal agency appointed by the Comptroller of the Currency;
       ``(2) any reference to the `Corporation' (other than in 
     section 11(e)(8)(D) of such Act), the `Corporation, whether 
     acting as such or as conservator or receiver', a `receiver', 
     or a `conservator' shall refer to the receiver or conservator 
     of an uninsured national bank or uninsured Federal branch or 
     Federal agency appointed by the Comptroller of the Currency; 
     and
       ``(3) any reference to an `insured depository institution' 
     or `depository institution' shall refer to an uninsured 
     national bank or an uninsured Federal branch or Federal 
     agency.
       ``(b) Liability.--The liability of a receiver or 
     conservator of an uninsured national bank or uninsured 
     Federal branch or agency shall be determined in the same 
     manner and subject to the same limitations that apply to 
     receivers and conservators of insured depository institutions 
     under section 11(e) of the Federal Deposit Insurance Act.
       ``(c) Regulatory Authority.--
       ``(1) In general.--The Comptroller of the Currency, in 
     consultation with the Federal Deposit Insurance Corporation, 
     may promulgate regulations to implement this section.
       ``(2) Specific requirement.--In promulgating regulations to 
     implement this section, the Comptroller of the Currency shall 
     ensure that the regulations generally are consistent with the 
     regulations and policies of the Federal Deposit Insurance 
     Corporation adopted pursuant to the Federal Deposit Insurance 
     Act.
       ``(d) Definitions.--For purposes of this section, the terms 
     `Federal branch', `Federal agency', and `foreign bank' have 
     the same meanings as in section 1(b) of the International 
     Banking Act of 1978.''.

[[Page 2595]]



     SEC. 907. BANKRUPTCY CODE AMENDMENTS.

       (a) Definitions of Forward Contract, Repurchase Agreement, 
     Securities Clearing Agency, Swap Agreement, Commodity 
     Contract, and Securities Contract.--Title 11, United States 
     Code, is amended--
       (1) in section 101--
       (A) in paragraph (25)--
       (i) by striking ``means a contract'' and inserting 
     ``means--
       ``(A) a contract'';
       (ii) by striking ``, or any combination thereof or option 
     thereon;'' and inserting ``, or any other similar 
     agreement;''; and
       (iii) by adding at the end the following:
       ``(B) any combination of agreements or transactions 
     referred to in subparagraphs (A) and (C);
       ``(C) any option to enter into an agreement or transaction 
     referred to in subparagraph (A) or (B);
       ``(D) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), or (C), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this paragraph, except that such master agreement shall 
     be considered to be a forward contract under this paragraph 
     only with respect to each agreement or transaction under such 
     master agreement that is referred to in subparagraph (A), 
     (B), or (C); or
       ``(E) any security agreement or arrangement, or other 
     credit enhancement related to any agreement or transaction 
     referred to in subparagraph (A), (B), (C), or (D), but not to 
     exceed the actual value of such contract on the date of the 
     filing of the petition;'';
       (B) in paragraph (46), by striking ``on any day during the 
     period beginning 90 days before the date of'' and inserting 
     ``at any time before'';
       (C) by amending paragraph (47) to read as follows:
       ``(47) `repurchase agreement' (which definition also 
     applies to a reverse repurchase agreement)--
       ``(A) means--
       ``(i) an agreement, including related terms, which provides 
     for the transfer of one or more certificates of deposit, 
     mortgage related securities (as defined in section 3 of the 
     Securities Exchange Act of 1934), mortgage loans, interests 
     in mortgage related securities or mortgage loans, eligible 
     bankers' acceptances, qualified foreign government securities 
     (defined as a security that is a direct obligation of, or 
     that is fully guaranteed by, the central government of a 
     member of the Organization for Economic Cooperation and 
     Development), or securities that are direct obligations of, 
     or that are fully guaranteed by, the United States or any 
     agency of the United States against the transfer of funds by 
     the transferee of such certificates of deposit, eligible 
     bankers' acceptances, securities, loans, or interests, with a 
     simultaneous agreement by such transferee to transfer to the 
     transferor thereof certificates of deposit, eligible bankers' 
     acceptance, securities, loans, or interests of the kind 
     described in this clause, at a date certain not later than 1 
     year after such transfer or on demand, against the transfer 
     of funds;
       ``(ii) any combination of agreements or transactions 
     referred to in clauses (i) and (iii);
       ``(iii) an option to enter into an agreement or transaction 
     referred to in clause (i) or (ii);
       ``(iv) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), or (iii), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a repurchase 
     agreement under this paragraph, except that such master 
     agreement shall be considered to be a repurchase agreement 
     under this paragraph only with respect to each agreement or 
     transaction under the master agreement that is referred to in 
     clause (i), (ii), or (iii); or
       ``(v) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in clause (i), (ii), (iii), or (iv), but not to exceed the 
     actual value of such contract on the date of the filing of 
     the petition; and
       ``(B) does not include a repurchase obligation under a 
     participation in a commercial mortgage loan;'';
       (D) in paragraph (48), by inserting ``, or exempt from such 
     registration under such section pursuant to an order of the 
     Securities and Exchange Commission,'' after ``1934''; and
       (E) by amending paragraph (53B) to read as follows:
       ``(53B) `swap agreement'--
       ``(A) means--
       ``(i) any agreement, including the terms and conditions 
     incorporated by reference in such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including--

       ``(I) 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;
       ``(VII) a commodity index or a commodity swap, option, 
     future, or forward agreement; or
       ``(VIII) a weather swap, weather derivative, or weather 
     option;

       ``(ii) any agreement or transaction similar to any other 
     agreement or transaction referred to in this paragraph that--

       ``(I) is presently, or in the future becomes, regularly 
     entered into in the swap market (including terms and 
     conditions incorporated by reference therein); and
       ``(II) is a forward, swap, future, or option on one or more 
     rates, currencies, commodities, equity securities, or other 
     equity instruments, debt securities or other debt 
     instruments, or economic indices or measures of economic risk 
     or value;

       ``(iii) any combination of agreements or transactions 
     referred to in this subparagraph;
       ``(iv) any option to enter into an agreement or transaction 
     referred to in this subparagraph;
       ``(v) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), (iii), or (iv), 
     together with all supplements to any such master agreement, 
     and without regard to whether the master agreement contains 
     an agreement or transaction that is not a swap agreement 
     under this paragraph, except that the master agreement shall 
     be considered to be a swap agreement under this paragraph 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in clause (i), (ii), 
     (iii), or (iv); or
       ``(vi) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in clause (i) through (v), but not to exceed the 
     actual value of such contract on the date of the filing of 
     the petition; and
       ``(B) is applicable for purposes of this title only, and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     and the regulations prescribed by the Securities and Exchange 
     Commission or the Commodity Futures Trading Commission.'';
       (2) in section 741(7), by striking paragraph (7) and 
     inserting the following:
       ``(7) `securities contract'--
       ``(A) means--
       ``(i) a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including an interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security, certificate of 
     deposit, loan, interest, group or index, or option;
       ``(ii) any option entered into on a national securities 
     exchange relating to foreign currencies;
       ``(iii) the guarantee by or to any securities clearing 
     agency of a settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, or mortgage loans or interests therein 
     (including any interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security, certificate of 
     deposit, loan, interest, group or index, or option;
       ``(iv) any margin loan;
       ``(v) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this subparagraph;
       ``(vi) any combination of the agreements or transactions 
     referred to in this subparagraph;
       ``(vii) any option to enter into any agreement or 
     transaction referred to in this subparagraph;
       ``(viii) a master agreement that provides for an agreement 
     or transaction referred to in clause (i), (ii), (iii), (iv), 
     (v), (vi), or (vii), together with all supplements to any 
     such master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a securities contract under this subparagraph, except 
     that such master agreement shall be considered to be a 
     securities contract under this subparagraph only with respect 
     to each agreement or transaction under such master agreement 
     that is referred to in clause (i), (ii), (iii), (iv), (v), 
     (vi), or (vii); or
       ``(ix) any security agreement or arrangement or other 
     credit enhancement, related to any agreement or transaction 
     referred to in this subparagraph, but not to exceed the 
     actual value of such contract on the date of the filing of 
     the petition; and
       ``(B) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan.''; and

[[Page 2596]]

       (3) in section 761(4)--
       (A) by striking ``or'' at the end of subparagraph (D); and
       (B) by adding at the end the following:
       ``(F) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(G) any combination of the agreements or transactions 
     referred to in this paragraph;
       ``(H) any option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(I) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), (C), (D), 
     (E), (F), (G), or (H), together with all supplements to such 
     master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a commodity contract under this paragraph, except that 
     the master agreement shall be considered to be a commodity 
     contract under this paragraph only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subparagraph (A), (B), (C), (D), (E), (F), 
     (G), or (H); or
       ``(J) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this paragraph, but not to exceed the actual value of 
     such contract on the date of the filing of the petition;''.
       (b) Definitions of Financial Institution, Financial 
     Participant, and Forward Contract Merchant.--Section 101 of 
     title 11, United States Code, is amended--
       (1) by inserting after paragraph (22) the following:
       ``(22A) `financial participant' means an entity that, at 
     the time it enters into a securities contract, commodity 
     contract, or forward contract, or at the time of the filing 
     of the petition, has one or more agreements or transactions 
     described in paragraph (1), (2), (3), (4), (5), or (6) of 
     section 561(a) with the debtor or any other entity (other 
     than an affiliate) of a total gross dollar value of not less 
     than $1,000,000,000 in notional or actual principal amount 
     outstanding on any day during the previous 15-month period, 
     or has gross mark-to-market positions of not less than 
     $100,000,000 (aggregated across counterparties) in one or 
     more such agreements or transactions with the debtor or any 
     other entity (other than an affiliate) on any day during the 
     previous 15-month period;''; and
       (2) by striking paragraph (26) and inserting the following:
       ``(26) `forward contract merchant' means a Federal reserve 
     bank, or an entity, the business of which consists in whole 
     or in part of entering into forward contracts as or with 
     merchants or in a commodity, as defined or in section 761 or 
     any similar good, article, service, right, or interest which 
     is presently or in the future becomes the subject of dealing 
     in the forward contract trade;''.
       (c) Definition of Master Netting Agreement and Master 
     Netting Agreement Participant.--Section 101 of title 11, 
     United States Code, is amended by inserting after paragraph 
     (38) the following new paragraphs:
       ``(38A) `master netting agreement'--
       ``(A) means an agreement providing for the exercise of 
     rights, including rights of netting, setoff, liquidation, 
     termination, acceleration, or closeout, under or in 
     connection with one or more contracts that are described in 
     any one or more of paragraphs (1) through (5) of section 
     561(a), or any security agreement or arrangement or other 
     credit enhancement related to one or more of the foregoing; 
     and
       ``(B) if the agreement contains provisions relating to 
     agreements or transactions that are not contracts described 
     in paragraphs (1) through (5) of section 561(a), shall be 
     deemed to be a master netting agreement only with respect to 
     those agreements or transactions that are described in any 
     one or more of paragraphs (1) through (5) of section 561(a);
       ``(38B) `master netting agreement participant' means an 
     entity that, at any time before the 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 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 one or more swap agreements that constitutes the setoff 
     of a claim against the debtor for any payment or other 
     transfer of property due from the debtor under or in 
     connection with any swap agreement against any payment due to 
     the debtor from the swap participant under or in connection 
     with any swap agreement or against cash, securities, or other 
     property held by, pledged to, and under the control of, or 
     due from such swap participant to margin, guarantee, secure, 
     or settle any swap agreement;''; and
       (D) by inserting after paragraph (27), as added by this 
     Act, the following new paragraph:
       ``(28) under subsection (a), of the setoff by a master 
     netting agreement participant of a mutual debt and claim 
     under or in connection with one or more master netting 
     agreements or any contract or agreement subject to such 
     agreements that constitutes the setoff of a claim against the 
     debtor for any payment or other transfer of property due from 
     the debtor under or in connection with such agreements or any 
     contract or agreement subject to such agreements against any 
     payment due to the debtor from such master netting agreement 
     participant under or in connection with such agreements or 
     any contract or agreement subject to such agreements or 
     against cash, securities, or other property held by, pledged 
     to, 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 that such participant is eligible 
     to exercise such offset rights under paragraph (6), (7), or 
     (17) for each individual contract covered by the master 
     netting agreement in issue; or''.
       (2) Limitation.--Section 362 of title 11, United States 
     Code, as amended by 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), (17), or (28) of subsection (b) shall not be stayed 
     by any order of a court or administrative agency in any 
     proceeding under this title.''.
       (e) Limitation of Avoidance Powers Under Master Netting 
     Agreement.--Section 546 of title 11, United States Code, as 
     amended by this Act, is amended--
       (1) in subsection (g) (as added by section 103 of Public 
     Law 101-311)--
       (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 adding at the end the following:
       ``(k) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), 
     and 548(b) the trustee may not avoid a transfer made by or to 
     a master netting agreement participant under or in connection 
     with any master netting agreement or any individual contract 
     covered thereby that is made before the commencement of the 
     case, except under section 548(a)(1)(A) and except to the 
     extent that the trustee could otherwise avoid such a transfer 
     made under an individual contract covered by such master 
     netting agreement.''.
       (f) Fraudulent Transfers of Master Netting Agreements.--
     Section 548(d)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (C), by striking ``and'' at the end;
       (2) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) a master netting agreement participant that receives 
     a transfer in connection with a master netting agreement or 
     any individual contract covered thereby takes for value to 
     the extent of such transfer, except that, with respect to a 
     transfer under any individual contract covered thereby, to 
     the extent that such master netting agreement participant 
     otherwise did not take (or is otherwise not deemed to have 
     taken) such transfer for value.''.
       (g) Termination or Acceleration of Securities Contracts.--
     Section 555 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

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

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

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

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

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

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

[[Page 2597]]



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

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

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

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

     shall not be stayed, avoided, or otherwise limited by 
     operation of any provision of this title or by any order of a 
     court or administrative agency in any proceeding under this 
     title.
       ``(b) Exception.--
       ``(1) In general.--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) Commodity brokers.--If a debtor is a commodity broker 
     subject to subchapter IV of chapter 7--
       ``(A) a party may not net or offset an obligation to the 
     debtor arising under, or in connection with, a commodity 
     contract against any claim arising under, or in connection 
     with, other instruments, contracts, or agreements listed in 
     subsection (a) except to the extent that the party has 
     positive net equity in the commodity accounts at the debtor, 
     as calculated under that subchapter IV; and
       ``(B) another commodity broker may not net or offset an 
     obligation to the debtor arising under, or in connection 
     with, a commodity contract entered into or held on behalf of 
     a customer of the debtor against any claim arising under, or 
     in connection with, other instruments, contracts, or 
     agreements listed in subsection (a).
       ``(3) Construction.--No provision of subparagraph (A) or 
     (B) of paragraph (2) shall prohibit the offset of claims and 
     obligations that arise under--
       ``(A) a cross-margining agreement that has been approved by 
     the Commodity Futures Trading Commission or submitted to the 
     Commodity Futures Trading Commission under section 
     5(a)(12)(A) of the Commodity Exchange Act and has been 
     approved; or
       ``(B) any other netting agreement between a clearing 
     organization, as defined in section 761, and another entity 
     that has been approved by the Commodity Futures Trading 
     Commission.
       ``(c) Definition.--As used in this section, the term 
     `contractual right' includes a right set forth in a rule or 
     bylaw of a national securities exchange, a national 
     securities association, or a securities clearing agency, a 
     right set forth in a bylaw of a clearing organization or 
     contract market or in a resolution of the governing board 
     thereof, and a right, whether or not evidenced in writing, 
     arising under common law, under law merchant, or by reason of 
     normal business practice.
       ``(d) Cases Ancillary to Foreign Proceedings.--Any 
     provisions of this title relating to securities contracts, 
     commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, or master netting agreements 
     shall apply in a case under chapter 15 of this title, so that 
     enforcement of contractual provisions of such contracts and 
     agreements in accordance with their terms will not be stayed 
     or otherwise limited by operation of any provision of this 
     title or by order of a court in any case under this title, 
     and to limit avoidance powers to the same extent as in a 
     proceeding under chapter 7 or 11 of this title (such 
     enforcement not to be limited based on the presence or 
     absence of assets of the debtor in the United States).''.
       (2) Conforming amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, is amended by 
     inserting after the item relating to section 560 the 
     following:

``561. Contractual right to terminate, liquidate, accelerate, or offset 
              under a master netting agreement and across contracts.''.
       (l) Commodity Broker Liquidations.--Title 11, United States 
     Code, is amended by inserting after section 766 the 
     following:

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

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

     ``Sec. 753. Stockbroker liquidation and forward contract 
       merchants, commodity brokers, stockbrokers, financial 
       institutions, 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.''.
       (n) Setoff.--Section 553 of title 11, United States Code, 
     is amended--
       (1) in subsection (a)(3)(C), by inserting before the period 
     the following: ``(except for a setoff of a kind described in 
     section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(28), 555, 
     556, 559, 560, or 561 of this title)''; and
       (2) in subsection (b)(1), by striking ``362(b)(14),'' and 
     inserting ``362(b)(17), 362(b)(28), 555, 556, 559, 560, 
     561''.
       (o) Securities Contracts, Commodity Contracts, and Forward 
     Contracts.--Title 11, United States Code, is amended--
       (1) in section 362(b)(6), by striking ``financial 
     institutions,'' each place such term appears and inserting 
     ``financial institution, financial participant,'';
       (2) in section 546(e), by inserting ``financial 
     participant,'' after ``financial institution,'';
       (3) in section 548(d)(2)(B), by inserting ``financial 
     participant,'' after ``financial institution,'';
       (4) in section 555--
       (A) by inserting ``financial participant,'' after 
     ``financial institution,''; and
       (B) by inserting before the period at the end ``, a right 
     set forth in a bylaw of a clearing organization or contract 
     market or in a resolution of the governing board thereof, and 
     a right, whether or not in writing, arising under common law, 
     under law merchant, or by reason of normal business 
     practice''; and
       (5) in section 556, by inserting ``, financial 
     participant,'' after ``commodity broker''.
       (p) Conforming Amendments.--Title 11, United States Code, 
     is amended--
       (1) in the table of sections for chapter 5--
       (A) by amending the items relating to sections 555 and 556 
     to read as follows:

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

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

``767. Commodity broker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              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. 908. RECORDKEEPING REQUIREMENTS.

       Section 11(e)(8) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)) is amended by adding at the end the 
     following new subparagraph:
       ``(H) Recordkeeping requirements.--The Corporation, in 
     consultation with the appropriate Federal banking agencies, 
     may prescribe regulations requiring more detailed

[[Page 2598]]

     recordkeeping with respect to qualified financial contracts 
     (including market valuations) by insured depository 
     institutions.''.

     SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION 
                   REQUIREMENT.

       Section 13(e)(2) of the Federal Deposit Insurance Act (12 
     U.S.C. 1823(e)(2)) is amended to read as follows:
       ``(2) Exemptions from contemporaneous execution 
     requirement.--An agreement to provide for the lawful 
     collateralization of--
       ``(A) deposits of, or other credit extension by, a Federal, 
     State, or local governmental entity, or of any depositor 
     referred to in section 11(a)(2), including an agreement to 
     provide collateral in lieu of a surety bond;
       ``(B) bankruptcy estate funds pursuant to section 345(b)(2) 
     of title 11, United States Code;
       ``(C) extensions of credit, including any overdraft, from a 
     Federal reserve bank or Federal home loan bank; or
       ``(D) one or more qualified financial contracts, as defined 
     in section 11(e)(8)(D),

     shall not be deemed invalid pursuant to paragraph (1)(B) 
     solely because such agreement was not executed 
     contemporaneously with the acquisition of the collateral or 
     because of pledges, delivery, or substitution of the 
     collateral made in accordance with such agreement.''.

     SEC. 910. DAMAGE MEASURE.

       (a) In General.--Title 11, United States Code, is amended--
       (1) by inserting after section 561, as added by this Act, 
     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 pursuant to section 
     365(a), or if a forward contract merchant, stockbroker, 
     financial institution, securities clearing agency, repo 
     participant, financial participant, master netting agreement 
     participant, or swap participant liquidates, terminates, or 
     accelerates such contract or agreement, damages shall be 
     measured as of the earlier of--
       ``(1) the date of such rejection; or
       ``(2) the date 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 (as added by this Act) 
     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 562 of this title shall be allowed under subsection 
     (a), (b), or (c), or disallowed under subsection (d) or (e), 
     as if such claim had arisen before the date of the filing of 
     the petition.''.

     SEC. 911. SIPC STAY.

       Section 5(b)(2) of the Securities Investor Protection Act 
     of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Exception from stay.--
       ``(i) Notwithstanding section 362 of title 11, United 
     States Code, neither the filing of an application under 
     subsection (a)(3) nor any order or decree obtained by SIPC 
     from the court shall operate as a stay of any contractual 
     rights of a creditor to liquidate, terminate, or accelerate a 
     securities contract, commodity contract, forward contract, 
     repurchase agreement, swap agreement, or master netting 
     agreement, as those terms are defined in sections 101 and 741 
     of title 11, United States Code, to offset or net termination 
     values, payment amounts, or other transfer obligations 
     arising under or in connection with one or more of such 
     contracts or agreements, or to foreclose on any cash 
     collateral pledged by the debtor, whether or not with respect 
     to one or more of such contracts or agreements.
       ``(ii) Notwithstanding clause (i), such application, order, 
     or decree may operate as a stay of the foreclosure on, or 
     disposition of, securities collateral pledged by the debtor, 
     whether or not with respect to one or more of such contracts 
     or agreements, securities sold by the debtor under a 
     repurchase agreement, or securities lent under a securities 
     lending agreement.
       ``(iii) As used in this subparagraph, the term `contractual 
     right' includes a right set forth in a rule or bylaw of a 
     national securities exchange, a national securities 
     association, or a securities clearing agency, a right set 
     forth in a bylaw of a clearing organization or contract 
     market or in a resolution of the governing board thereof, and 
     a right, whether or not in writing, arising under common law, 
     under law merchant, or by reason of normal business 
     practice.''.

     SEC. 912. ASSET-BACKED SECURITIZATIONS.

       Section 541 of title 11, United States Code, is amended--
       (1) in subsection (b), by inserting after paragraph (7), as 
     added by this Act, the following:
       ``(8) any eligible asset (or proceeds thereof), to the 
     extent that such eligible asset was transferred by the 
     debtor, before the date of commencement of the case, to an 
     eligible entity in connection with an asset-backed 
     securitization, except to the extent such asset (or proceeds 
     or value thereof) may be recovered by the trustee under 
     section 550 by virtue of avoidance under section 548(a);''; 
     and
       (2) by adding at the end the following new subsection:
       ``(f) For purposes of this section--
       ``(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, including, without limitation, all securities 
     issued by governmental units, at least one class or tranche 
     of which was rated investment grade by one or more nationally 
     recognized securities rating organizations, when the 
     securities were initially issued by an issuer;
       ``(2) the term `eligible asset' means--
       ``(A) financial assets (including interests therein and 
     proceeds thereof), either fixed or revolving, whether or not 
     the same are in existence as of the date of the transfer, 
     including residential and commercial mortgage loans, consumer 
     receivables, trade receivables, assets of governmental units, 
     including payment obligations relating to taxes, receipts, 
     fines, tickets, and other sources of revenue, and lease 
     receivables, that, by their terms, convert into cash within a 
     finite time period, plus any residual interest in property 
     subject to receivables included in such financial assets plus 
     any rights or other assets designed to assure the servicing 
     or timely distribution of proceeds to security holders;
       ``(B) cash; and
       ``(C) securities, including without limitation, all 
     securities issued by governmental units;
       ``(3) the term `eligible entity' means--
       ``(A) an issuer; or
       ``(B) a trust, corporation, partnership, governmental unit, 
     limited liability company (including a single member limited 
     liability company), or other entity engaged exclusively in 
     the business of acquiring and transferring eligible assets 
     directly or indirectly to an issuer and taking actions 
     ancillary thereto;
       ``(4) the term `issuer' means a trust, corporation, 
     partnership, or other entity engaged exclusively in the 
     business of acquiring and holding eligible assets, issuing 
     securities backed by eligible assets, and taking actions 
     ancillary thereto; and
       ``(5) the term `transferred' means the debtor, 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)(8) (whether or not reference is 
     made to this title or any section hereof), irrespective and 
     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. 913. 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. PERMANENT REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--
       (1) In general.--Chapter 12 of title 11, United States 
     Code, as reenacted by section 149 of division C of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999 (Public Law 105-277), is hereby 
     reenacted, and as here reenacted is amended by this Act.
       (2) Effective date.--Subsection (a) shall take effect on 
     July 1, 2000.
       (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, 2004.''.

[[Page 2599]]



     SEC. 1003. 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;''.
       (b) Special Notice Provisions.--Section 1231(b) of title 
     11, United States Code, as so designated by this Act, 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, is amended--
       (1) by redesignating paragraph (27A), as added by this Act, 
     as paragraph (27B); and
       (2) by inserting after paragraph (27) the following:
       ``(27A) `health care business'--
       ``(A) means any public or private entity (without regard to 
     whether that entity is organized for profit or not for 
     profit) that is primarily engaged in offering to the general 
     public facilities and services for--
       ``(i) the diagnosis or treatment of injury, deformity, or 
     disease; and
       ``(ii) surgical, drug treatment, psychiatric, or obstetric 
     care; and
       ``(B) includes--
       ``(i) any--

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

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

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

       (b) Patient and Patient Records Defined.--Section 101 of 
     title 11, United States Code, is amended by inserting after 
     paragraph (40) the following:
       ``(40A) `patient' means any person who obtains or receives 
     services from a health care business;
       ``(40B) `patient records' means any written document 
     relating to a patient or a record recorded in a magnetic, 
     optical, or other form of electronic medium;''.
       (c) Rule of Construction.--The amendments made by 
     subsection (a) of this section shall not affect the 
     interpretation of section 109(b) of title 11, United States 
     Code.

     SEC. 1102. DISPOSAL OF PATIENT RECORDS.

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

     ``Sec. 351. Disposal of patient records

       ``If a health care business commences a case under chapter 
     7, 9, or 11, and the trustee does not have a sufficient 
     amount of funds to pay for the storage of patient records in 
     the manner required under applicable Federal or State law, 
     the following requirements shall apply:
       ``(1) The trustee shall--
       ``(A) promptly publish notice, in 1 or more appropriate 
     newspapers, that if patient records are not claimed by the 
     patient or an insurance provider (if applicable law permits 
     the insurance provider to make that claim) by the date that 
     is 365 days after the date of that notification, the trustee 
     will destroy the patient records; and
       ``(B) during the first 180 days of the 365-day period 
     described in subparagraph (A), promptly attempt to notify 
     directly each patient that is the subject of the patient 
     records and appropriate insurance carrier concerning the 
     patient records by mailing to the last known address of that 
     patient, or a family member or contact person for that 
     patient, and to the appropriate insurance carrier an 
     appropriate notice regarding the claiming or disposing of 
     patient records.
       ``(2) If, after providing the notification under paragraph 
     (1), patient records are not claimed during the 365-day 
     period described under that paragraph, the trustee shall 
     mail, by certified mail, at the end of such 365-day period a 
     written request to each appropriate Federal agency to request 
     permission from that agency to deposit the patient records 
     with that agency, except that no Federal agency is required 
     to accept patient records under this paragraph.
       ``(3) If, following the 365-day period described in 
     paragraph (2) and after providing the notification under 
     paragraph (1), patient records are not claimed by a patient 
     or insurance provider, or request is not granted by a Federal 
     agency to deposit such records with that agency, the trustee 
     shall destroy those records by--
       ``(A) if the records are written, shredding or burning the 
     records; or
       ``(B) if the records are magnetic, optical, or other 
     electronic records, by otherwise destroying those records so 
     that those records cannot be retrieved.''.
       (b) Clerical Amendment.--The table of sections for 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 AND OTHER ADMINISTRATIVE 
                   EXPENSES.

       Section 503(b) of title 11, United States Code, as amended 
     by this Act, is amended by adding at the end the following:
       ``(8) the actual, necessary costs and expenses of closing a 
     health care business incurred by a trustee or by a Federal 
     agency (as that term is defined in section 551(1) of title 5) 
     or a department or agency of a State or political subdivision 
     thereof, including any cost or expense incurred--
       ``(A) in disposing of patient records in accordance with 
     section 351; or
       ``(B) in connection with transferring patients from the 
     health care business that is in the process of being closed 
     to another health care business;
       ``(9) with respect to a nonresidential real property lease 
     previously assumed under section 365, and subsequently 
     rejected, a sum equal to all monetary obligations due, 
     excluding those arising from or related to a failure to 
     operate or penalty provisions, for the period of 2 years 
     following the later of the rejection date or date of actual 
     turnover of the premises, without reduction or setoff for any 
     reason whatsoever except for sums actually received or to be 
     received from a nondebtor, and the claim for remaining sums 
     due for the balance of the term of the lease shall be a claim 
     under section 502(b)(6); and''.

     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) In General.--
       ``(1) Authority to appoint.--Not later than 30 days after a 
     case is commenced by a health care business under chapter 7, 
     9, or 11, the court shall order the appointment of an 
     ombudsman to monitor the quality of patient care to represent 
     the interests of the patients of the health care business, 
     unless the court finds that the appointment of the ombudsman 
     is not necessary for the protection of patients under the 
     specific facts of the case.
       ``(2) Qualifications.--If the court orders the appointment 
     of an ombudsman, the United States trustee shall appoint 1 
     disinterested person, other than the United States trustee, 
     to serve as an ombudsman, including a person who is serving 
     as a State Long-Term Care Ombudsman appointed under title III 
     or VII of the Older Americans Act of 1965 (42 U.S.C. 3021 et 
     seq., 3058 et seq.).
       ``(b) Duties.--An ombudsman appointed under subsection (a) 
     shall--
       ``(1) monitor the quality of patient care, to the extent 
     necessary under the circumstances, including interviewing 
     patients and physicians;
       ``(2) not later than 60 days after the date of appointment, 
     and not less frequently than 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) Confidentiality.--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. The ombudsman 
     may not review confidential patient records, unless the court 
     provides prior approval, with restrictions on the ombudsman 
     to protect the confidentiality of patient records.''.
       (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 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

[[Page 2600]]

       (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 this Act, is amended 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 ``sections 704(2), 
     704(5), 704(7), 704(8), and 704(9)'' and inserting 
     ``paragraphs (2), (5), (7), (8), (9), and (11) of section 
     704(a)''.

     SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION NOT SUBJECT 
                   TO AUTOMATIC STAY.

       Section 362(b) of title 11, United States Code, is amended 
     by inserting after paragraph (28), as added by this Act, the 
     following:
       ``(29) under subsection (a), of the exclusion by the 
     Secretary of Health and Human Services of the debtor from 
     participation in the medicare program or any other Federal 
     health care program (as defined in section 1128B(f) of the 
     Social Security Act (42 U.S.C. 1320a-7b(f)) pursuant to title 
     XI of such Act (42 U.S.C. 1301 et seq.) or title XVIII of 
     such Act (42 U.S.C. 1395 et seq.).''.

                    TITLE XII--TECHNICAL AMENDMENTS

     SEC. 1201. DEFINITIONS.

       Section 101 of title 11, United States Code, as amended by 
     this Act, is amended--
       (1) by striking ``In this title--'' and inserting ``In this 
     title the following definitions shall apply:'';
       (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), (38), and (54A), by 
     striking ``; and'' at the end and inserting a period;
       (5) in paragraph (51B)--
       (A) by inserting ``who is not a family farmer'' after 
     ``debtor'' the first place it appears; and
       (B) by striking ``thereto having aggregate'' and all that 
     follows through the end of the paragraph;
       (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.''; and
       (7) in each of paragraphs (1) through (35), in each of 
     paragraphs (36) and (37), and in each of paragraphs (40) 
     through (55), by striking the semicolon at the end and 
     inserting a period.

     SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

       Section 104 of title 11, United States Code, as amended by 
     section 322 of this Act, is amended by inserting 
     ``522(f)(3),'' after ``522(d),'' each place it appears.

     SEC. 1203. EXTENSION OF TIME.

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

     SEC. 1204. TECHNICAL AMENDMENTS.

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

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

       Section 110(j)(4) of title 11, United States Code, as so 
     designated by this Act, is amended by striking ``attorney's'' 
     and inserting ``attorneys' ''.

     SEC. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL 
                   PERSONS.

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

     SEC. 1207. EFFECT OF CONVERSION.

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

     SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

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

     SEC. 1209. EXCEPTIONS TO DISCHARGE.

       Section 523 of title 11, United States Code, as amended by 
     this Act, is amended--
       (1) by transferring paragraph (15), as added by section 
     304(e) of Public Law 103-394 (108 Stat. 4133), so as to 
     insert such paragraph after subsection (a)(14);
       (2) in subsection (a)(9), by striking ``motor vehicle'' and 
     inserting ``motor vehicle, vessel, or aircraft''; and
       (3) in subsection (e), by striking ``a insured'' and 
     inserting ``an insured''.

     SEC. 1210. EFFECT OF DISCHARGE.

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

     SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

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

     SEC. 1212. PROPERTY OF THE ESTATE.

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

     SEC. 1213. PREFERENCES.

       (a) In General.--Section 547 of title 11, United States 
     Code, as amended by 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 transfer 
     made between 90 days and 1 year before the date of the filing 
     of the petition, by the debtor to an entity that is not an 
     insider for the benefit of a creditor that is an insider, 
     such transfer shall be considered to be avoided under this 
     section only with respect to the creditor that is an 
     insider.''.
       (b) Applicability.--The amendments made by this section 
     shall apply to any case that is pending or commenced on or 
     after the date of enactment of this Act.

     SEC. 1214. POSTPETITION TRANSACTIONS.

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

     SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.

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

     SEC. 1216. GENERAL PROVISIONS.

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

     SEC. 1217. ABANDONMENT OF RAILROAD LINE.

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

     SEC. 1218. CONTENTS OF PLAN.

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

     SEC. 1219. 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. 1220. 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. 1221. 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. 1222. 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 this 
     Act, is amended by adding at the end the following:
       ``(16) All transfers of property of the plan shall be made 
     in accordance with any applicable provisions of nonbankruptcy 
     law that govern the transfer of property by a corporation or 
     trust that is not a moneyed, business, or commercial 
     corporation or trust.''.

[[Page 2601]]

       (c) Transfer of Property.--Section 541 of title 11, United 
     States Code, as amended by this Act, is amended by adding at 
     the end the following:
       ``(g) Notwithstanding any other provision of this title, 
     property that is held by a debtor that is a corporation 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986 and exempt from tax under section 501(a) of such Code 
     may be transferred to an entity that is not such a 
     corporation, but only under the same conditions as would 
     apply if the debtor had not filed a case under this title.''.
       (d) Applicability.--The amendments made by this section 
     shall apply to a case pending under title 11, United States 
     Code, on the date of enactment of this Act, or filed under 
     that title on or after that date of enactment, except that 
     the court shall not confirm a plan under chapter 11 of title 
     11, United States Code, without considering whether this 
     section would substantially affect the rights of a party in 
     interest who first acquired rights with respect to the debtor 
     after the date of the petition. The parties who may appear 
     and be heard in a proceeding under this section include the 
     attorney general of the State in which the debtor is 
     incorporated, was formed, or does business.
       (e) Rule of Construction.--Nothing in this section shall be 
     construed to require the court in which a case under chapter 
     11 of title 11, United States Code, is pending to remand or 
     refer any proceeding, issue, or controversy to any other 
     court or to require the approval of any other court for the 
     transfer of property.

     SEC. 1223. 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. 1224. BANKRUPTCY JUDGESHIPS.

       (a) Short Title.--This section may be cited as the 
     ``Bankruptcy Judgeship Act of 2001''.
       (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 district of 
     Delaware.
       (D) Two additional bankruptcy judgeships for the southern 
     district of Florida.
       (E) One additional bankruptcy judgeship for the southern 
     district of Georgia.
       (F) Two additional bankruptcy judgeships for the district 
     of Maryland.
       (G) One additional bankruptcy judgeship for the eastern 
     district of Michigan.
       (H) One additional bankruptcy judgeship for the southern 
     district of Mississippi.
       (I) One additional bankruptcy judgeship for the district of 
     New Jersey.
       (J) One additional bankruptcy judgeship for the eastern 
     district of New York.
       (K) One additional bankruptcy judgeship for the northern 
     district of New York.
       (L) One additional bankruptcy judgeship for the southern 
     district of New York.
       (M) One additional bankruptcy judgeship for the eastern 
     district of North Carolina.
       (N) One additional bankruptcy judgeship for the eastern 
     district of Pennsylvania.
       (O) One additional bankruptcy judgeship for the middle 
     district of Pennsylvania.
       (P) One additional bankruptcy judgeship for the district of 
     Puerto Rico.
       (Q) One additional bankruptcy judgeship for the western 
     district of Tennessee.
       (R) 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) shall not be filled if the vacancy--
       (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).
       (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 paragraphs (1), (3), (7), (8), and (9) of 
     section 3(a) of the Bankruptcy Judgeship Act of 1992 (28 
     U.S.C. 152 note) are extended until the first vacancy 
     occurring in the office of a bankruptcy judge in the 
     applicable district resulting from the death, retirement, 
     resignation, or removal of a bankruptcy judge and occurring--
       (A) 8 years or more after November 8, 1993, with respect to 
     the northern district of Alabama;
       (B) 10 years or more after October 28, 1993, with respect 
     to the district of Delaware;
       (C) 8 years or more after August 29, 1994, with respect to 
     the district of Puerto Rico;
       (D) 8 years or more after June 27, 1994, with respect to 
     the district of South Carolina; and
       (E) 8 years or more after November 23, 1993, with respect 
     to the eastern district of Tennessee.
       (2) Applicability of other provisions.--All other 
     provisions of section 3 of the Bankruptcy Judgeship Act of 
     1992 (28 U.S.C. 152 note) remain applicable to temporary 
     judgeship positions referred to in this subsection.
       (d) Technical Amendments.--Section 152(a) of title 28, 
     United States Code, is amended--
       (1) in paragraph (1), by striking the first sentence and 
     inserting the following: ``Each bankruptcy judge to be 
     appointed for a judicial district, as provided in paragraph 
     (2), shall be appointed by the United States court of appeals 
     for the circuit in which such district is located.''; and
       (2) in paragraph (2)--
       (A) in the item relating to the middle district of Georgia, 
     by striking ``2'' and inserting ``3''; and
       (B) in the collective item relating to the middle and 
     southern districts of Georgia, by striking ``Middle and 
     Southern . . . . . . 1''.
       (e) Effective Dates.--(1) Except as provided in paragraph 
     (2), this section and the amendments made by this section 
     shall take effect on the date of the enactment of this Act.
       (2) With respect to the temporary bankruptcy judgeship 
     authorized for the district of South Carolina under paragraph 
     (8) of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 
     note), subsection (c)(1) as it applies to the extension 
     specified in subparagraph (D) of such subsection shall take 
     effect immediately before December 31, 2000.

     SEC. 1225. COMPENSATING TRUSTEES.

       Section 1326 of title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), by striking ``and'';
       (B) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(3) if a chapter 7 trustee has been allowed compensation 
     due to the conversion or dismissal of the debtor's prior case 
     pursuant to section 707(b), and some portion of that 
     compensation remains unpaid in a case converted to this 
     chapter or in the case dismissed under section 707(b) and 
     refiled under this chapter, the amount of any such unpaid 
     compensation, which shall be paid monthly--
       ``(A) by prorating such amount over the remaining duration 
     of the plan; and
       ``(B) by monthly payments not to exceed the greater of--
       ``(i) $25; or
       ``(ii) the amount payable to unsecured nonpriority 
     creditors, as provided by the plan, multiplied by 5 percent, 
     and the result divided by the number of months in the 
     plan.''; and
       (2) by adding at the end the following:
       ``(d) Notwithstanding any other provision of this title--
       ``(1) compensation referred to in subsection (b)(3) is 
     payable and may be collected by the trustee under that 
     paragraph, even if such amount has been discharged in a prior 
     proceeding under this title; and
       ``(2) such compensation is payable in a case under this 
     chapter only to the extent permitted by subsection (b)(3).''.

     SEC. 1226. AMENDMENT TO SECTION 362 OF TITLE 11, UNITED 
                   STATES CODE.

       Section 362(b)(18) of title 11, United States Code, is 
     amended to read as follows:
       ``(18) under subsection (a) of the creation or perfection 
     of a statutory lien for an ad valorem property tax, or a 
     special tax or special assessment on real property whether or 
     not ad valorem, imposed by a governmental unit, if such tax 
     or assessment comes due after the filing of the petition;''.

     SEC. 1227. JUDICIAL EDUCATION.

       The Director of the Federal Judicial Center, in 
     consultation with the Director of the Executive Office for 
     United States Trustees, shall develop materials and conduct 
     such training as may be useful to courts in implementing this 
     Act and the amendments made by this Act, including the 
     requirements relating to the means test and reaffirmations 
     under section 707(b) of title 11, United States Code, as 
     amended by this Act.

     SEC. 1228. RECLAMATION.

       (a) Rights and Powers of the Trustee.--Section 546(c) of 
     title 11, United States Code, is amended to read as follows:
       ``(c)(1) Except as provided in subsection (d) of this 
     section and subsection (c) of section 507, and subject to the 
     prior rights of holders of security interests in such goods 
     or the proceeds thereof, the rights and powers of the trustee 
     under sections 544(a), 545, 547, and 549 are subject to the 
     right of a seller of goods that has sold goods to the debtor, 
     in the ordinary course of such seller's business, to reclaim 
     such goods if the debtor has received such goods while 
     insolvent, not later than 45 days after the date of the 
     commencement of a case under this title, but such seller may 
     not reclaim such goods unless such seller demands in writing 
     reclamation of such goods--
       ``(A) not later than 45 days after the date of receipt of 
     such goods by the debtor; or
       ``(B) not later than 20 days after the date of commencement 
     of the case, if the 45-day period expires after the 
     commencement of the case.
       ``(2) If a seller of goods fails to provide notice in the 
     manner described in paragraph (1), the seller still may 
     assert the rights contained in section 503(b)(7).''.
       (b) Administrative Expenses.--Section 503(b) of title 11, 
     United States Code, as

[[Page 2602]]

     amended by this Act, is amended by adding at the end the 
     following:
       ``(10) the value of any goods received by the debtor not 
     later than 20 days after the date of commencement of a case 
     under this title in which the goods have been sold to the 
     debtor in the ordinary course of such debtor's business.''.

     SEC. 1229. PROVIDING REQUESTED TAX DOCUMENTS TO THE COURT.

       (a) Chapter 7 Cases.--The court shall not grant a discharge 
     in the case of an individual seeking bankruptcy under chapter 
     7 of title 11, United States Code, unless requested tax 
     documents have been provided to the court.
       (b) Chapter 11 and Chapter 13 Cases.--The court shall not 
     confirm a plan of reorganization in the case of an individual 
     under chapter 11 or 13 of title 11, United States Code, 
     unless requested tax documents have been filed with the 
     court.
       (c) Document Retention.--The court shall destroy documents 
     submitted in support of a bankruptcy claim not sooner than 3 
     years after the date of the conclusion of a bankruptcy case 
     filed by an individual under chapter 7, 11, or 13 of title 
     11, United States Code. In the event of a pending audit or 
     enforcement action, the court may extend the time for 
     destruction of such requested tax documents.

     SEC. 1230. ENCOURAGING CREDITWORTHINESS.

       (a) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) certain lenders may sometimes offer credit to consumers 
     indiscriminately, without taking steps to ensure that 
     consumers are capable of repaying the resulting debt, and in 
     a manner which may encourage certain consumers to accumulate 
     additional debt; and
       (2) resulting consumer debt may increasingly be a major 
     contributing factor to consumer insolvency.
       (b) Study Required.--The Board of Governors of the Federal 
     Reserve System (hereafter in this section referred to as the 
     ``Board'') shall conduct a study of--
       (1) consumer credit industry practices of soliciting and 
     extending credit--
       (A) indiscriminately;
       (B) without taking steps to ensure that consumers are 
     capable of repaying the resulting debt; and
       (C) in a manner that encourages consumers to accumulate 
     additional debt; and
       (2) the effects of such practices on consumer debt and 
     insolvency.
       (c) Report and Regulations.--Not later than 12 months after 
     the date of enactment of this Act, the Board--
       (1) shall make public a report on its findings with respect 
     to the indiscriminate solicitation and extension of credit by 
     the credit industry;
       (2) may issue regulations that would require additional 
     disclosures to consumers; and
       (3) may take any other actions, consistent with its 
     existing statutory authority, that the Board finds necessary 
     to ensure responsible industrywide practices and to prevent 
     resulting consumer debt and insolvency.

     SEC. 1231. PROPERTY NO LONGER SUBJECT TO REDEMPTION.

       Section 541(b) of title 11, United States Code, is amended 
     by inserting after paragraph (8), as added by this Act, the 
     following:
       ``(9) subject to subchapter III of chapter 5, any interest 
     of the debtor in property where the debtor pledged or sold 
     tangible personal property (other than securities or written 
     or printed evidences of indebtedness or title) as collateral 
     for a loan or advance of money given by a person licensed 
     under law to make such loans or advances, where--
       ``(A) the tangible personal property is in the possession 
     of the pledgee or transferee;
       ``(B) the debtor has no obligation to repay the money, 
     redeem the collateral, or buy back the property at a 
     stipulated price; and
       ``(C) neither the debtor nor the trustee have exercised any 
     right to redeem provided under the contract or State law, in 
     a timely manner as provided under State law and section 
     108(b) of this title; or''.

     SEC. 1232. TRUSTEES.

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

     SEC. 1233. BANKRUPTCY FORMS.

       Section 2075 of title 28, United States Code, is amended by 
     adding at the end the following:

     ``The bankruptcy rules promulgated under this section shall 
     prescribe a form for the statement required under section 
     707(b)(2)(C) of title 11 and may provide general rules on the 
     content of such statement.''.

     SEC. 1234. EXPEDITED APPEALS OF BANKRUPTCY CASES TO COURTS OF 
                   APPEALS.

       (a) In General.--Section 158 of title 28, United States 
     Code, is amended--
       (1) by striking subsection (d) and inserting the following:
       ``(d)(1) In a case in which the appeal is heard by the 
     district court, the judgment, decision, order, or decree of 
     the bankruptcy judge shall be deemed a judgment, decision, 
     order, or decree of the district court entered 31 days after 
     such appeal is filed with the district court, unless not 
     later than 30 days after such appeal is filed with the 
     district court--
       ``(A) the district court--
       ``(i) files a decision on the appeal from the judgment, 
     decision, order, or decree of the bankruptcy judge; or
       ``(ii) enters an order extending such 30-day period for 
     cause upon motion of a party or upon the court's own motion; 
     or
       ``(B) all parties to the appeal file written consent that 
     the district court may retain such appeal until it enters a 
     decision.
       ``(2) For the purpose of this subsection, an appeal shall 
     be considered filed with the district court on the date on 
     which the notice of appeal is filed, except that in a case in 
     which the appeal is heard by the district court because a 
     party has made an election under subsection (c)(1)(B), the 
     appeal shall be considered filed with the district court on 
     the date on which such election is made.
       ``(e) The courts of appeals shall have jurisdiction of 
     appeals from--
       ``(1) all final judgments, decisions, orders, and decrees 
     of district courts entered under subsection (a);
       ``(2) all final judgments, decisions, orders, and decrees 
     of bankruptcy appellate panels entered under subsection (b); 
     and
       ``(3) all judgments, decisions, orders, and decrees of 
     district courts entered under subsection (d) to the extent 
     that such judgments, decisions, orders, and decrees would be 
     reviewable by a district court under subsection (a).
       ``(f) In accordance with rules prescribed by the Supreme 
     Court of the United States under sections 2072 through 2077, 
     the court of appeals may, in its discretion, exercise 
     jurisdiction over an appeal from an interlocutory judgment, 
     decision, order, or decree under subsection (e)(3).''.
       (b) Technical and Conforming Amendments.--
       (1) Section 305(c) of title 11, United States Code, is 
     amended by striking ``section 158(d)'' and inserting 
     ``subsection (e) or (f) of section 158''.
       (2) Section 1334(d) of title 28, United States Code, is 
     amended by striking ``section 158(d)'' and inserting 
     ``subsection (e) or (f) of section 158''.
       (3) Section 1452(b) of title 28, United States Code, is 
     amended by striking ``section 158(d)'' and inserting 
     ``subsection (e) or (f) of section 158''.

     SEC. 1235. EXEMPTIONS.

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

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

     SEC. 1301. ENHANCED DISCLOSURES UNDER AN OPEN END CREDIT 
                   PLAN.

       (a) Minimum Payment Disclosures.--Section 127(b) of the 
     Truth in Lending Act (15 U.S.C. 1637(b)) is amended by adding 
     at the end the following:
       ``(11)(A) In the case of an open end credit plan that 
     requires a minimum monthly payment of not more than 4 percent 
     of the balance on which finance charges are accruing, the 
     following statement, located on the front of the billing 
     statement, disclosed clearly and conspicuously: `Minimum 
     Payment Warning: Making only the minimum payment will 
     increase the interest you pay and the time it takes to repay 
     your balance. For example, making only the typical 2% minimum 
     monthly payment on a balance of $1,000 at an interest rate of 
     17% would take 88 months to repay the balance in full. For

[[Page 2603]]

     an estimate of the time it would take to repay your balance, 
     making only minimum payments, call this toll-free number: 
     ______.' (the blank space to be filled in by the creditor).
       ``(B) In the case of an open end credit plan that requires 
     a minimum monthly payment of more than 4 percent of the 
     balance on which finance charges are accruing, the following 
     statement, in a prominent location on the front of the 
     billing statement, disclosed clearly and conspicuously: 
     `Minimum Payment Warning: Making only the required minimum 
     payment will increase the interest you pay and the time it 
     takes to repay your balance. Making a typical 5% minimum 
     monthly payment on a balance of $300 at an interest rate of 
     17% would take 24 months to repay the balance in full. For an 
     estimate of the time it would take to repay your balance, 
     making only minimum monthly payments, call this toll-free 
     number: ______.' (the blank space to be filled in by the 
     creditor).
       ``(C) Notwithstanding subparagraphs (A) and (B), in the 
     case of a creditor with respect to which compliance with this 
     title is enforced by the Federal Trade Commission, the 
     following statement, in a prominent location on the front of 
     the billing statement, disclosed clearly and conspicuously: 
     `Minimum Payment Warning: Making only the required minimum 
     payment will increase the interest you pay and the time it 
     takes to repay your balance. For example, making only the 
     typical 5% minimum monthly payment on a balance of $300 at an 
     interest rate of 17% would take 24 months to repay the 
     balance in full. For an estimate of the time it would take to 
     repay your balance, making only minimum monthly payments, 
     call the Federal Trade Commission at this toll-free number: 
     ______.' (the blank space to be filled in by the creditor). A 
     creditor who is subject to this subparagraph shall not be 
     subject to subparagraph (A) or (B).
       ``(D) Notwithstanding subparagraph (A), (B), or (C), in 
     complying with any such subparagraph, a creditor may 
     substitute an example based on an interest rate that is 
     greater than 17 percent. Any creditor that is subject to 
     subparagraph (B) may elect to provide the disclosure required 
     under subparagraph (A) in lieu of the disclosure required 
     under subparagraph (B).
       ``(E) The Board shall, by rule, periodically recalculate, 
     as necessary, the interest rate and repayment period under 
     subparagraphs (A), (B), and (C).
       ``(F)(i) The toll-free telephone number disclosed by a 
     creditor or the Federal Trade Commission under subparagraph 
     (A), (B), or (G), as appropriate, may be a toll-free 
     telephone number established and maintained by the creditor 
     or the Federal Trade Commission, as appropriate, or may be a 
     toll-free telephone number established and maintained by a 
     third party for use by the creditor or multiple creditors or 
     the Federal Trade Commission, as appropriate. The toll-free 
     telephone number may connect consumers to an automated device 
     through which consumers may obtain information described in 
     subparagraph (A), (B), or (C), by inputting information using 
     a touch-tone telephone or similar device, if consumers whose 
     telephones are not equipped to use such automated device are 
     provided the opportunity to be connected to an individual 
     from whom the information described in subparagraph (A), (B), 
     or (C), as applicable, may be obtained. A person that 
     receives a request for information described in subparagraph 
     (A), (B), or (C) from an obligor through the toll-free 
     telephone number disclosed under subparagraph (A), (B), or 
     (C), as applicable, shall disclose in response to such 
     request only the information set forth in the table 
     promulgated by the Board under subparagraph (H)(i).
       ``(ii)(I) The Board shall establish and maintain for a 
     period not to exceed 24 months following the effective date 
     of the Bankruptcy Abuse Prevention and Consumer Protection 
     Act of 2001, a toll-free telephone number, or provide a toll-
     free telephone number established and maintained by a third 
     party, for use by creditors that are depository institutions 
     (as defined in section 3 of the Federal Deposit Insurance 
     Act), including a Federal credit union or State credit union 
     (as defined in section 101 of the Federal Credit Union Act 
     (12 U.S.C. 1752)), with total assets not exceeding 
     $250,000,000. The toll-free telephone number may connect 
     consumers to an automated device through which consumers may 
     obtain information described in subparagraph (A) or (B), as 
     applicable, by inputting information using a touch-tone 
     telephone or similar device, if consumers whose telephones 
     are not equipped to use such automated device are provided 
     the opportunity to be connected to an individual from whom 
     the information described in subparagraph (A) or (B), as 
     applicable, may be obtained. A person that receives a request 
     for information described in subparagraph (A) or (B) from an 
     obligor through the toll-free telephone number disclosed 
     under subparagraph (A) or (B), as applicable, shall disclose 
     in response to such request only the information set forth in 
     the table promulgated by the Board under subparagraph (H)(i). 
     The dollar amount contained in this subclause shall be 
     adjusted according to an indexing mechanism established by 
     the Board.
       ``(II) Not later than 6 months prior to the expiration of 
     the 24-month period referenced in subclause (I), the Board 
     shall submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Banking and 
     Financial Services of the House of Representatives a report 
     on the program described in subclause (I).
       ``(G) The Federal Trade Commission shall establish and 
     maintain a toll-free number for the purpose of providing to 
     consumers the information required to be disclosed under 
     subparagraph (C).
       ``(H) The Board shall--
       ``(i) establish a detailed table illustrating the 
     approximate number of months that it would take to repay an 
     outstanding balance if a consumer pays only the required 
     minimum monthly payments and if no other advances are made, 
     which table shall clearly present standardized information to 
     be used to disclose the information required to be disclosed 
     under subparagraph (A), (B), or (C), as applicable;
       ``(ii) establish the table required under clause (i) by 
     assuming--
       ``(I) a significant number of different annual percentage 
     rates;
       ``(II) a significant number of different account balances;
       ``(III) a significant number of different minimum payment 
     amounts; and
       ``(IV) that only minimum monthly payments are made and no 
     additional extensions of credit are obtained; and
       ``(iii) promulgate regulations that provide instructional 
     guidance regarding the manner in which the information 
     contained in the table established under clause (i) should be 
     used in responding to the request of an obligor for any 
     information required to be disclosed under subparagraph (A), 
     (B), or (C).
       ``(I) The disclosure requirements of this paragraph do not 
     apply to any charge card account, the primary purpose of 
     which is to require payment of charges in full each month.
       ``(J) A creditor that maintains a toll-free telephone 
     number for the purpose of providing customers with the actual 
     number of months that it will take to repay the customer's 
     outstanding balance is not subject to the requirements of 
     subparagraph (A) or (B).
       ``(K) A creditor that maintains a toll-free telephone 
     number for the purpose of providing customers with the actual 
     number of months that it will take to repay an outstanding 
     balance shall include the following statement on each billing 
     statement: `Making only the minimum payment will increase the 
     interest you pay and the time it takes to repay your balance. 
     For more information, call this toll-free number: ____.' (the 
     blank space to be filled in by the creditor).''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board of Governors of the Federal 
     Reserve System (hereafter in this title referred to as the 
     ``Board'') shall promulgate regulations implementing the 
     requirements of section 127(b)(11) of the Truth in Lending 
     Act, as added by subsection (a) of this section.
       (2) Effective date.--Section 127(b)(11) of the Truth in 
     Lending Act, as added by subsection (a) of this section, and 
     the regulations issued under paragraph (1) of this subsection 
     shall not take effect until the later of--
       (A) 18 months after the date of enactment of this Act; or
       (B) 12 months after the publication of such final 
     regulations by the Board.
       (c) Study of Financial Disclosures.--
       (1) In general.--The Board may conduct a study to determine 
     the types of information available to potential borrowers 
     from consumer credit lending institutions regarding factors 
     qualifying potential borrowers for credit, repayment 
     requirements, and the consequences of default.
       (2) Factors for consideration.--In conducting a study under 
     paragraph (1), the Board should, in consultation with the 
     other Federal banking agencies (as defined in section 3 of 
     the Federal Deposit Insurance Act), the National Credit Union 
     Administration, and the Federal Trade Commission, consider 
     the extent to which--
       (A) consumers, in establishing new credit arrangements, are 
     aware of their existing payment obligations, the need to 
     consider those obligations in deciding to take on new credit, 
     and how taking on excessive credit can result in financial 
     difficulty;
       (B) minimum periodic payment features offered in connection 
     with open end credit plans impact consumer default rates;
       (C) consumers make only the required minimum payment under 
     open end credit plans;
       (D) consumers are aware that making only required minimum 
     payments will increase the cost and repayment period of an 
     open end credit obligation; and
       (E) the availability of low minimum payment options is a 
     cause of consumers experiencing financial difficulty.
       (3) Report to congress.--Findings of the Board in 
     connection with any study conducted under this subsection 
     shall be submitted to Congress. Such report shall also 
     include recommendations for legislative initiatives, if any, 
     of the Board, based on its findings.

     SEC. 1302. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED 
                   BY A DWELLING.

       (a) Open End Credit Extensions.--

[[Page 2604]]

       (1) Credit applications.--Section 127A(a)(13) of the Truth 
     in Lending Act (15 U.S.C. 1637a(a)(13)) is amended--
       (A) by striking ``consultation of tax adviser.--A statement 
     that the'' and inserting the following: ``tax 
     deductibility.--A statement that--
       ``(A) the''; and
       (B) by striking the period at the end and inserting the 
     following: ``; and
       ``(B) in any case in which the extension of credit exceeds 
     the fair market value (as defined under the Internal Revenue 
     Code of 1986) of the dwelling, the interest on the portion of 
     the credit extension that is greater than the fair market 
     value of the dwelling is not tax deductible for Federal 
     income tax purposes.''.
       (2) Credit advertisements.--Section 147(b) of the Truth in 
     Lending Act (15   U.S.C. 1665b(b)) is amended--
       (A) by striking ``If any'' and inserting the following:
       ``(1) In general.--If any''; and
       (B) by adding at the end the following:
       ``(2) Credit in excess of fair market value.--Each 
     advertisement described in subsection (a) that relates to an 
     extension of credit that may exceed the fair market value of 
     the dwelling, and which advertisement is disseminated in 
     paper form to the public or through the Internet, as opposed 
     to by radio or television, shall include a clear and 
     conspicuous statement that--
       ``(A) the interest on the portion of the credit extension 
     that is greater than the fair market value of the dwelling is 
     not tax deductible for Federal income tax purposes; and
       ``(B) the consumer should consult a tax adviser for further 
     information regarding the deductibility of interest and 
     charges.''.
       (b) Non-Open End Credit Extensions.--
       (1) Credit applications.--Section 128 of the Truth in 
     Lending Act (15 U.S.C. 1638) is amended--
       (A) in subsection (a), by adding at the end the following:
       ``(15) In the case of a consumer credit transaction that is 
     secured by the principal dwelling of the consumer, in which 
     the extension of credit may exceed the fair market value of 
     the dwelling, a clear and conspicuous statement that--
       ``(A) the interest on the portion of the credit extension 
     that is greater than the fair market value of the dwelling is 
     not tax deductible for Federal income tax purposes; and
       ``(B) the consumer should consult a tax adviser for further 
     information regarding the deductibility of interest and 
     charges.''; and
       (B) in subsection (b), by adding at the end the following:
       ``(3) In the case of a credit transaction described in 
     paragraph (15) of subsection (a), disclosures required by 
     that paragraph shall be made to the consumer at the time of 
     application for such extension of credit.''.
       (2) Credit advertisements.--Section 144 of the Truth in 
     Lending Act (15 U.S.C. 1664) is amended by adding at the end 
     the following:
       ``(e) Each advertisement to which this section applies that 
     relates to a consumer credit transaction that is secured by 
     the principal dwelling of a consumer in which the extension 
     of credit may exceed the fair market value of the dwelling, 
     and which advertisement is disseminated in paper form to the 
     public or through the Internet, as opposed to by radio or 
     television, shall clearly and conspicuously state that--
       ``(1) the interest on the portion of the credit extension 
     that is greater than the fair market value of the dwelling is 
     not tax deductible for Federal income tax purposes; and
       ``(2) the consumer should consult a tax adviser for further 
     information regarding the deductibility of interest and 
     charges.''.
       (c) Regulatory Implementation.--
       (1) In general.--The Board shall promulgate regulations 
     implementing the amendments made by this section.
       (2) Effective date.--Regulations issued under paragraph (1) 
     shall not take effect until the later of--
       (A) 12 months after the date of enactment of this Act; or
       (B) 12 months after the date of publication of such final 
     regulations by the Board.

     SEC. 1303. DISCLOSURES RELATED TO ``INTRODUCTORY RATES''.

       (a) Introductory Rate Disclosures.--Section 127(c) of the 
     Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding 
     at the end the following:
       ``(6) Additional notice concerning `introductory rates'.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an application or solicitation to open a credit card account 
     and all promotional materials accompanying such application 
     or solicitation for which a disclosure is required under 
     paragraph (1), and that offers a temporary annual percentage 
     rate of interest, shall--
       ``(i) use the term `introductory' in immediate proximity to 
     each listing of the temporary annual percentage rate 
     applicable to such account, which term shall appear clearly 
     and conspicuously;
       ``(ii) if the annual percentage rate of interest that will 
     apply after the end of the temporary rate period will be a 
     fixed rate, state in a clear and conspicuous manner in a 
     prominent location closely proximate to the first listing of 
     the temporary annual percentage rate (other than a listing of 
     the temporary annual percentage rate in the tabular format 
     described in section 122(c)), the time period in which the 
     introductory period will end and the annual percentage rate 
     that will apply after the end of the introductory period; and
       ``(iii) if the annual percentage rate that will apply after 
     the end of the temporary rate period will vary in accordance 
     with an index, state in a clear and conspicuous manner in a 
     prominent location closely proximate to the first listing of 
     the temporary annual percentage rate (other than a listing in 
     the tabular format prescribed by section 122(c)), the time 
     period in which the introductory period will end and the rate 
     that will apply after that, based on an annual percentage 
     rate that was in effect within 60 days before the date of 
     mailing the application or solicitation.
       ``(B) Exception.--Clauses (ii) and (iii) of subparagraph 
     (A) do not apply with respect to any listing of a temporary 
     annual percentage rate on an envelope or other enclosure in 
     which an application or solicitation to open a credit card 
     account is mailed.
       ``(C) Conditions for introductory rates.--An application or 
     solicitation to open a credit card account for which a 
     disclosure is required under paragraph (1), and that offers a 
     temporary annual percentage rate of interest shall, if that 
     rate of interest is revocable under any circumstance or upon 
     any event, clearly and conspicuously disclose, in a prominent 
     manner on or with such application or solicitation--
       ``(i) a general description of the circumstances that may 
     result in the revocation of the temporary annual percentage 
     rate; and
       ``(ii) if the annual percentage rate that will apply upon 
     the revocation of the temporary annual percentage rate--

       ``(I) will be a fixed rate, the annual percentage rate that 
     will apply upon the revocation of the temporary annual 
     percentage rate; or
       ``(II) will vary in accordance with an index, the rate that 
     will apply after the temporary rate, based on an annual 
     percentage rate that was in effect within 60 days before the 
     date of mailing the application or solicitation.

       ``(D) Definitions.--In this paragraph--
       ``(i) the terms `temporary annual percentage rate of 
     interest' and `temporary annual percentage rate' mean any 
     rate of interest applicable to a credit card account for an 
     introductory period of less than 1 year, if that rate is less 
     than an annual percentage rate that was in effect within 60 
     days before the date of mailing the application or 
     solicitation; and
       ``(ii) the term `introductory period' means the maximum 
     time period for which the temporary annual percentage rate 
     may be applicable.
       ``(E) Relation to other disclosure requirements.--Nothing 
     in this paragraph may be construed to supersede subsection 
     (a) of section 122, or any disclosure required by paragraph 
     (1) or any other provision of this subsection.''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board shall promulgate regulations 
     implementing the requirements of section 127(c)(6) of the 
     Truth in Lending Act, as added by this section.
       (2) Effective date.--Section 127(c)(6) of the Truth in 
     Lending Act, as added by this section, and regulations issued 
     under paragraph (1) of this subsection shall not take effect 
     until the later of--
       (A) 12 months after the date of enactment of this Act; or
       (B) 12 months after the date of publication of such final 
     regulations by the Board.

     SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.

       (a) Internet-Based Applications and Solicitations.--Section 
     127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is 
     amended by adding at the end the following:
       ``(7) Internet-based applications and solicitations.--
       ``(A) In general.--In any solicitation to open a credit 
     card account for any person under an open end consumer credit 
     plan using the Internet or other interactive computer 
     service, the person making the solicitation shall clearly and 
     conspicuously disclose--
       ``(i) the information described in subparagraphs (A) and 
     (B) of paragraph (1); and
       ``(ii) the information described in paragraph (6).
       ``(B) Form of disclosure.--The disclosures required by 
     subparagraph (A) shall be--
       ``(i) readily accessible to consumers in close proximity to 
     the solicitation to open a credit card account; and
       ``(ii) updated regularly to reflect the current policies, 
     terms, and fee amounts applicable to the credit card account.
       ``(C) Definitions.--For purposes of this paragraph--
       ``(i) the term `Internet' means the international computer 
     network of both Federal and non-Federal interoperable packet 
     switched data networks; and
       ``(ii) the term `interactive computer service' means any 
     information service, system, or access software provider that 
     provides or enables computer access by multiple users to

[[Page 2605]]

     a computer server, including specifically a service or system 
     that provides access to the Internet and such systems 
     operated or services offered by libraries or educational 
     institutions.''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board shall promulgate regulations 
     implementing the requirements of section 127(c)(7) of the 
     Truth in Lending Act, as added by this section.
       (2) Effective date.--The amendment made by subsection (a) 
     and the regulations issued under paragraph (1) of this 
     subsection shall not take effect until the later of--
       (A) 12 months after the date of enactment of this Act; or
       (B) 12 months after the date of publication of such final 
     regulations by the Board.

     SEC. 1305. DISCLOSURES RELATED TO LATE PAYMENT DEADLINES AND 
                   PENALTIES.

       (a) Disclosures Related to Late Payment Deadlines and 
     Penalties.--Section 127(b) of the Truth in Lending Act (15 
     U.S.C. 1637(b)) is amended by adding at the end the 
     following:
       ``(12) If a late payment fee is to be imposed due to the 
     failure of the obligor to make payment on or before a 
     required payment due date, the following shall be stated 
     clearly and conspicuously on the billing statement:
       ``(A) The date on which that payment is due or, if 
     different, the earliest date on which a late payment fee may 
     be charged.
       ``(B) The amount of the late payment fee to be imposed if 
     payment is made after such date.''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board shall promulgate regulations 
     implementing the requirements of section 127(b)(12) of the 
     Truth in Lending Act, as added by this section.
       (2) Effective date.--The amendment made by subsection (a) 
     and regulations issued under paragraph (1) of this subsection 
     shall not take effect until the later of--
       (A) 12 months after the date of enactment of this Act; or
       (B) 12 months after the date of publication of such final 
     regulations by the Board.

     SEC. 1306. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO 
                   INCUR FINANCE CHARGES.

       (a) Prohibition on Certain Actions for Failure To Incur 
     Finance Charges.--Section 127 of the Truth in Lending Act (15 
     U.S.C. 1637) is amended by adding at the end the following:
       ``(h) Prohibition on Certain Actions for Failure To Incur 
     Finance Charges.--A creditor of an account under an open end 
     consumer credit plan may not terminate an account prior to 
     its expiration date solely because the consumer has not 
     incurred finance charges on the account. Nothing in this 
     subsection shall prohibit a creditor from terminating an 
     account for inactivity in 3 or more consecutive months.''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board shall promulgate regulations 
     implementing the requirements of section 127(h) of the Truth 
     in Lending Act, as added by this section.
       (2) Effective date.--The amendment made by subsection (a) 
     and regulations issued under paragraph (1) of this subsection 
     shall not take effect until the later of--
       (A) 12 months after the date of enactment of this Act; or
       (B) 12 months after the date of publication of such final 
     regulations by the Board.

     SEC. 1307. DUAL USE DEBIT CARD.

       (a) Report.--The Board may conduct a study of, and present 
     to Congress a report containing its analysis of, consumer 
     protections under existing law to limit the liability of 
     consumers for unauthorized use of a debit card or similar 
     access device. Such report, if submitted, shall include 
     recommendations for legislative initiatives, if any, of the 
     Board, based on its findings.
       (b) Considerations.--In preparing a report under subsection 
     (a), the Board may include--
       (1) the extent to which section 909 of the Electronic Fund 
     Transfer Act (15 U.S.C. 1693g), as in effect at the time of 
     the report, and the implementing regulations promulgated by 
     the Board to carry out that section provide adequate 
     unauthorized use liability protection for consumers;
       (2) the extent to which any voluntary industry rules have 
     enhanced or may enhance the level of protection afforded 
     consumers in connection with such unauthorized use liability; 
     and
       (3) whether amendments to the Electronic Fund Transfer Act 
     (15 U.S.C. 1693 et seq.), or revisions to regulations 
     promulgated by the Board to carry out that Act, are necessary 
     to further address adequate protection for consumers 
     concerning unauthorized use liability.

     SEC. 1308. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO 
                   DEPENDENT STUDENTS.

       (a) Study.--
       (1) In general.--The Board shall conduct a study regarding 
     the impact that the extension of credit described in 
     paragraph (2) has on the rate of bankruptcy cases filed under 
     title 11, United States Code.
       (2) Extension of credit.--The extension of credit described 
     in this paragraph is the extension of credit to individuals 
     who are--
       (A) claimed as dependents for purposes of the Internal 
     Revenue Code of 1986; and
       (B) enrolled within 1 year of successfully completing all 
     required secondary education requirements and on a full-time 
     basis, in postsecondary educational institutions.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Board shall submit to the Senate 
     and the House of Representatives a report summarizing the 
     results of the study conducted under subsection (a).

     SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS.

       (a) Regulations.--Not later than 6 months after the date of 
     enactment of this Act, the Board, in consultation with the 
     other Federal banking agencies (as defined in section 3 of 
     the Federal Deposit Insurance Act), the National Credit Union 
     Administration Board, and the Federal Trade Commission, shall 
     promulgate regulations to provide guidance regarding the 
     meaning of the term ``clear and conspicuous'', as used in 
     subparagraphs (A), (B), and (C) of section 127(b)(11) and 
     clauses (ii) and (iii) of section 127(c)(6)(A) of the Truth 
     in Lending Act.
       (b) Examples.--Regulations promulgated under subsection (a) 
     shall include examples of clear and conspicuous model 
     disclosures for the purposes of disclosures required by the 
     provisions of the Truth in Lending Act referred to in 
     subsection (a).
       (c) Standards.--In promulgating regulations under this 
     section, the Board shall ensure that the clear and 
     conspicuous standard required for disclosures made under the 
     provisions of the Truth in Lending Act referred to in 
     subsection (a) can be implemented in a manner which results 
     in disclosures which are reasonably understandable and 
     designed to call attention to the nature and significance of 
     the information in the notice.

     SEC. 1310. ENFORCEMENT OF CERTAIN FOREIGN JUDGMENTS BARRED.

       (a) In General.--Notwithstanding any other provision of law 
     or contract, a court within the United States shall not 
     recognize or enforce any judgment rendered in a foreign court 
     if, by clear and convincing evidence, the court in which 
     recognition or enforcement of the judgment is sought 
     determines that the judgment gives effect to any purported 
     right or interest derived, directly or indirectly, from any 
     fraudulent misrepresentation or fraudulent omission that 
     occurred in the United States during the period beginning on 
     January 1, 1975, and ending on December 31, 1993.
       (b) Exception.--Subsection (a) shall not prevent 
     recognition or enforcement of a judgment rendered in a 
     foreign court if the foreign tribunal rendering judgment 
     giving effect to the right or interest concerned determines 
     that no fraudulent misrepresentation or fraudulent omission 
     described in subsection (a) occurred.

      TITLE XIV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

     SEC. 1401. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as otherwise provided in this 
     Act, this Act and the amendments made by this Act shall take 
     effect 180 days after the date of enactment of this Act.
       (b) Application of Amendments.--Except as otherwise 
     provided in this Act, 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 CHAIRMAN pro tempore. No further amendment is in order except 
those printed in the House Report 107-4. Each amendment may be offered 
only in the order printed, may be offered only by a Member designated 
in the report, shall be considered read, debatable for the time 
specified in the report, equally divided and controlled by the 
proponent and an opponent, shall not be subject to amendment, and shall 
not be subject to a demand for division of the question.
  It is now in order to consider amendment No. 1 printed in House 
Report 107-4.


              Amendment No. 1 Offered by Mr. Sensenbrenner

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

       Amendment No. 1 offered by Mr. Sensenbrenner:
       Page 10, line 13, strike ``case) who is not a dependent'' 
     and insert ``case who is not a dependent)''.
       Page 22, line 3, strike ``an individual case under chapter 
     7'' and insert ``a case under chapter 7 of this title in 
     which the debtor is an individual and''.
       Page 31, line 9, strike ``service'' and insert ``agency''.
       Page 34, line 20, strike ``services'' and insert 
     ``agencies''.
       Page 41, lines 12 and 16, strike ``service'' and insert 
     ``agency''.
       Page 42, in the matter following line 3, strike 
     ``services'' and insert ``agencies''.

[[Page 2606]]

       Page 74, strike lines 5 through 20, and insert the 
     following:
       (1) in subsection (a)--
       (A) by striking paragraph (5) and inserting the following:
       ``(5) for a domestic support obligation;''; and
       (B) by striking paragraph (18);
       (2) in subsection (c), by striking ``(6), or (15)'' each 
     place it appears and inserting ``or (6)''; and
       (3) in paragraph (15), as added by Public Law 103-394 (108 
     Stat. 4133)--
       (A) by inserting ``to a spouse, former spouse, or child of 
     the debtor and'' before ``not of the kind'';
       (B) by inserting ``or'' after ``court of record,''; and
       (C) by striking ``unless--'' and all that follows through 
     the end of the paragraph and inserting a semicolon.
       Page 75, strike line 21.
       Page 76, strike lines 1 through 5.
       Page 86, line 14, insert ``a person other than'' before the 
     open quotation marks.
       Page 99, lines 18 through 21, indent the left margin 2 ems 
     to the right.
       Page 101, line 22, strike the period at the end and insert 
     a semicolon.
       Page 101, line 23, strike ``Nothing in paragraph (18)'' and 
     insert ``but nothing in this paragraph''.
       Page 107, line 18, strike ``that person'' and insert ``a 
     person who provides such assistance or of such preparer''.
       Page 107, lines 22, 23, and 24, strike ``the person'' and 
     insert ``such assisted person''.
       Page 113, strike the matter after line 4, and insert the 
     following:

``526. Restrictions on debt relief agencies.''.

       Page 114, line 18, strike ``proceeding'' and insert 
     ``case''.
       Page 120, strike the matter after line 22, and insert the 
     following:

``528. Requirements for debt relief agencies.''.

       Page 123, lines 19 and 24, strike ``chapter 7, 11, or 13'' 
     and insert ``chapters 7, 11, and 13''.
       Page 130, beginning line 15, strike ``an individual case 
     under chapter 7 of this title'' and insert ``a case under 
     chapter 7 of this title in which the debtor in an 
     individual''.
       Page 132, beginning on line 13, strike ``an individual case 
     under chapter 7, 11, or 13'' and insert ``in which the debtor 
     is an individual''.
       Page 140, line 2, strike ``chapter 13 proceeding'' and 
     insert ``case under chapter 13''.
       Page 142, line 1, move the left margin 2 ems to the left.
       Page 142, lines 2 through 13, move the left margin 2 ems to 
     the left.
       Page 144, line 13, indent the left margin 2 additional ems 
     to the right.
       Page 144, lines 14 through 25, indent the left margin 2 
     additional ems to the right.
       Page 145, line 1, indent the left margin 2 additional ems 
     to the right.
       Page 145, lines 2 through 14, indent the left margin 2 
     additional ems to the right.
       Page 164, beginning on line 10, strike ``the case of an 
     individual filing under chapter 7, 11, or 13'' and insert ``a 
     case under chapter 7, 11, or 13 in which the debtor in an 
     individual''.
       Page 165, line 7, strike ``concerning an individual 
     debtor'' and insert `` in which the debtor is an 
     individual''.
       Page 171, line 3, strike ``(3)'' and insert ``(2)''.
       Page 172, line 1, strike ``amount'' and insert ``such 
     amount under this clause''.
       Page 172, line 20, strike ``amount'' and insert ``such 
     amount under this clause''.
       Page 177, line 14, strike ``(b)(l)'' and insert ``(b)(1)''.
       Page 183, line 24, strike ``(i)'' and insert ``(h)''.
       Page 184, line 2, strike ``(j)'' and insert ``(i)''
       Beginning on page 184, line 23 and all that follows through 
     line 2 on page 185, move the left margin 2 ems to the left.
       Page 187, line 12, strike ``period'' and insert 
     ``period,''.
       Page 189, lines 11 through 14, move the left margin 2 ems 
     to the left.
       Page 198, line 24, strike ``claims'' and insert 
     ``expenses''.
       Page 200, line 11, strike ``claims'' and insert 
     ``expenses''.
       Page 201, line 2, add ``of chapter 11'' after ``Subchapter 
     1''.
       Page 216, line 19, strike ``each district'' and insert 
     ``the district court, or the clerk of the bankruptcy court if 
     one has been certified pursuant to section 156(b) of this 
     title,''.
       Page 216, line 22, strike ``on a standardized form'' and 
     insert ``in a standardized format''.
       Page 218, line 5, insert ``cases filed during'' after 
     ``in''.
       Page 218, line 13, insert ``for cases closed during the 
     reporting period'' after ``case''.
       Page 218, line 14, insert ``cases closed during'' after 
     ``for''.
       Page 219, line 11, insert ``entered'' after ``orders''.
       Page 219, line 13, strike ``issued''.
       Page 224, beginning on line 24, strike ``individual cases 
     filed under chapter 7 or 13 of such title'' and insert 
     ``cases filed under chapter 7 or 13 in which the debtor is an 
     individual''.
       Page 234, line 7, insert ``the'' after ``date of''.
       Page 235, line 3, strike ``(i)''.
       Page 235, line 9, strike ``(ii)''.
       Page 246, line 16, insert ``claim for a'' after ``to a''.
       Page 248, line 3, insert ``(1)'' before ``Section''.
       Page 252, after line 22, insert the following:

       (2) Clerical Amendment.--The table of sections for chapter 
     3 of title 11, United States Code, is amended by striking the 
     item relating to section 346 and inserting the following:

``346.  Special provisions related to the treatment of State and local 
              taxes.''.

       Page 252, line 24, insert ``(A)'' after ``(1)''.
       Page 252, after line 25, insert the following:
       (B) The table of sections for chapter 7 of title 11, United 
     States Code, is amended by striking the item relating to 
     section 728.
       Page 281, line 13, strike ``(j)'' and insert ``(k)''.
       Page 283, line 3, strike ``15,'' and insert ``15''.
       Page 327, line 17, strike the period and insert a 
     semicolon.
       Page 331, line 15, strike ``Financial Institution''.
       Page 336, line 21, strike ``(l)'' and insert ``(m)''.
       Page 337, line 13, strike ``(k)'' and insert ``(j)''.
       Page 346, line 16, strike ``561'' and insert ``561,''.
       Page 348, strike the matter following line 4, and insert 
     the following:

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

       Page 356, strike lines 11 through 21 (and make such 
     technical and conforming changes as may be appropriate).
       Page 357, line 11, strike ``Bankruptcy,'' and insert 
     ``Bankruptcy''.
       Page 369, line 13, insert ``and inserting a semicolon'' 
     after ``paragraph''.
       Page 370, line 1, strike ``property.'' and insert 
     ``property;''.
       Page 370, line 3, strike ``and (37)'' and insert ``(37), 
     (38A), and (38B),''.
       Page 377, beginning on line 20, strike ``judgeship 
     positions shall be filled'' and insert ``bankruptcy judges 
     shall be appointed''.
       Page 378, lines 1, 5, 9, 13, 15, 17, 19, 21, and 23, strike 
     ``judgeship'' and insert ``judge''.
       Page 378, line 3, 7, and 11, strike ``judgeships'' and 
     insert ``judges''.
       Page 379, lines 1, 3, 5, 7, 9, and 11, strike ``judgeship'' 
     and insert ``judge''.
       Page 379, beginning on line 23, strike ``bankruptcy 
     judgeship positions'' and insert ``office of bankruptcy 
     judges''.
       Page 381, beginning on line 2, strike ``judgeship positions 
     referred to in this subsection'' and insert ``office of 
     bankruptcy judges referred to in paragraph (1)''.
       Page 393, strike lines 10 through 13 (and conform the table 
     of contents of the bill accordingly).
       Page 411, line 21, strike ``Applications and''.
       Page 412, line 1, strike ``Applications and''.
  The CHAIRMAN pro tempore. Pursuant to House Resolution 71, the 
gentleman from Wisconsin (Mr. Sensenbrenner) and the gentleman from 
Michigan (Mr. Conyers) each will control 5 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, this amendment is one that proposes to make technical 
and conforming changes to the bill. The 420-page bill had a number of 
technical problems, such as improper spacing, incorrect terminology, 
drafting errors, incorrect headings, incorrect references to section 
numbers and grammatical inconsistencies. This amendment will clean up 
the bill which will make the provisions of the legislation easier to 
execute and to understand.
  I want to emphasize that this amendment does not substantively alter 
the composition of the bill. Over the last several years, the Congress 
has considered, amended, debated, negotiated and refined this measure, 
and the product under consideration is the result of those labors. 
During the last Congress, that delicate balance is preserved in this 
legislation. This amendment improves the bill by making it as 
technically accurate as possible, which is important because lawyers, 
accountants, creditors and debtors will be relying on and scrutinizing 
its provisions. Again, this is a technical amendment meant only to 
clarify with precision the terms of this legislation. I urge its 
adoption.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.

[[Page 2607]]

Could I ask my friend the chairman why the Schiff provision was struck 
out after it had been put in, which led to the dilemma that we did not 
put it in, and so, therefore, it was subsequently struck out, and now 
we do not have it at all?
  Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Mr. Chairman, this provision was struck because it 
was determined to be substantive in nature and potentially 
controversial. It is the intention of me as the author of this 
amendment to have the amendment to be completely technical and 
nonsubstantive in nature and to clean up the inconsistencies in the 
bill that was presented to the President last year and ended up being 
pocket vetoed.
  Mr. CONYERS. We are now in this situation that it was subsequently 
struck after we went to the Committee on Rules. We are under the 
limitation of the Committee on Rules' determination of what is allowed 
to be brought to the floor. So what do we do now, assuming that you are 
sympathetic to this, to what was in it?
  By the way, it was also struck unilaterally. We never got any word 
that it was going to be struck. In the midst of the great atmosphere of 
bipartisanship which has been repeatedly urged upon us by the 
administration, we have a problem brewing that, if possible, I would 
like to try to extinguish. How do we do that?

                              {time}  1230

  The gentleman could extend me some kind of a proposal that would lend 
us to be able to get this measure back in.
  By the way, I thought it was a technical amendment that the gentleman 
from California had accepted.
  Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Mr. Chairman, I thank the gentleman from Michigan 
(Mr. Conyers) for yielding again.
  Mr. Chairman, the problem is that it ended up not being technical in 
nature and it ended up changing substantive rights in the bill, which 
is something that we had decided to keep out of the technical 
amendment.
  I would further point out to my friend, the gentleman from Michigan 
(Mr. Conyers), that the change was made prior to the Committee on Rules 
holding its hearing yesterday, and the amendment that was before the 
Committee on Rules was the revised text.
  Mr. CONYERS. Mr. Chairman, it was issued February 28, 2001, 3:29 p.m.
  Does the gentleman know what time we went into Committee on Rules 
yesterday? 2:00. So this came out afterward.
  Beside that, we were not notified, contrary to the practice that I 
understand that we operate under for technical amendments.
  Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Mr. Chairman, all of the amendments that were made 
in order by the Committee on Rules were redrafted to reflect the Union 
Calendar print that has been submitted to the House for its 
consideration. So of the five amendments that were made in order by the 
Committee on Rules, all of them had to be redrafted, recognizing the 
fact that the text of the bill as reported from committee is not the 
text of the Union Calendar printed as before the Committee of the Whole 
today.
  Mr. CONYERS. I beg to differ with my friend, the chairman, but the 
only change was page numbers. There were no substantive changes 
whatsoever; and if the gentleman knows of any, beside the one of which 
I complain, which was dropping a technical amendment, there were no 
other changes made outside of the pagination.
  So February 28, 2001, 3:29 p.m. It came after the fact, no notice. I 
think we are off to a not-good start here about how we are going to 
operate.
  We went before the committee, and I was asked before the Committee on 
Rules what is my priority for these amendments? And I said in the order 
in which they are numbered if there is some cutoff.
  How much time does the gentleman need?
  Well, as much as the generosity will extend.
  The CHAIRMAN pro tempore (Mr. LaHood). The time of the gentleman from 
Michigan (Mr. Conyers) has expired.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 1 minute to the gentleman 
from Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Chairman, it was in the Committee on Rules that we 
were asked how much time and how many amendments we would like; and as 
I recall it, we got one amendment and certainly not in the priority 
which was listed.
  So this is a very unhappy situation. The version before the House is 
not the version that was submitted to the Committee on Rules, and the 
majority dropped the amendment after the Committee on Rules met or the 
Committee on Rules did or the leadership did or somebody did to ensure 
that an important provision was eliminated that would ensure that 
children and single parents do not suffer unduly in bankruptcy.
  Therefore, Mr. Chairman, I regretfully announce that I will not be 
able to support the gentleman's amendment.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of the 
time.
  Mr. Chairman, this is a technical amendment. The gentleman from 
Michigan (Mr. Conyers) is complaining about the fact that there is an 
omission in the technical amendment, and the fact that it is 
substantive in nature means that the provisions that the gentleman from 
Michigan (Mr. Conyers) is complaining about do not belong in a 
technical amendment.
  Now, the question before the committee, when we vote on this 
amendment, is whether or not to pass a technical amendment that is 
needed to clean up the bill and to make its provisions easier to 
understand and easier to execute when the court has questions placed 
before them.
  A no vote means that people want to make it harder to understand and 
harder to execute. I would urge the House to support this amendment so 
that it can be made easier to understand by everybody.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentleman from Wisconsin (Mr. Sensenbrenner).
  The question was taken; and the Chairman pro tempore announced that 
the ayes appeared to have it.
  Mr. CONYERS. Mr. Chairman, I demand a recorded vote, and pending 
that, I make the point of order that a quorum is not present.
  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Wisconsin 
(Mr. Sensenbrenner) will be postponed.
  The point of no quorum is considered withdrawn.
  It is now in order to consider amendment No. 2 printed in House 
Report 107-4.


          Amendment No. 2 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer amendment No. 2.
  The CHAIRMAN pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Ms. Jackson-Lee of Texas:
       Page 11, line 1, insert ``or public'' after ``private''.
  The CHAIRMAN pro tempore. Pursuant to House Resolution 71, the 
gentlewoman from Texas (Ms. Jackson-Lee) and a Member opposed each will 
control 10 minutes.
  The Chair recognizes the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, let me thank both the 
chairman and the ranking member and the

[[Page 2608]]

Committee on Rules for seeing merit in this amendment. As I indicated, 
I have concerns about this legislation. I have offered it to say that 
important elements of protecting the consumer are not included, but I 
do believe that we have an opportunity to add to the enhancement of the 
legislation. So I offer an amendment that speaks to all Americans, 
Americans who are raising children, from rural hamlets to urban 
centers, from large school districts to small school districts.
  Recognizing that the education of our children from K to 12 is an 
expensive endeavor, H.R. 333 includes a provision that allows for 
private school expenses to be deducted or to be utilized as relates to 
bankruptcy so that those expenses could be paid, and therefore this 
particular amendment adds a debtor's monthly public school expenses as 
allowable expenses under the means test.
  Mr. SENSENBRENNER. Mr. Chairman, will the gentlewoman yield?
  Ms. JACKSON-LEE of Texas. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Mr. Chairman, I thank the gentlewoman from Texas 
(Ms. Jackson-Lee) for yielding.
  Mr. Chairman, I believe that the gentlewoman has pointed out an 
unequal treatment in this bill which needs correction. I am happy to 
support the amendment of the gentlewoman from Texas (Ms. Jackson-Lee) 
and hope that we can get it passed quickly.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the gentleman from 
Wisconsin (Mr. Sensenbrenner) very much for his comments, and I will 
move to summarize my remarks. I ask the gentleman, if the gentleman 
would stand, I would very much encourage the gentleman's support. I 
believe that is what I heard. I am just trying to be clear.
  Mr. SENSENBRENNER. Mr. Chairman, will the gentlewoman yield?
  Ms. JACKSON-LEE of Texas. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. The gentleman from Wisconsin said he is pleased to 
support the amendment of the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. I thank the gentleman from Wisconsin very 
much for his support.
  Mr. Chairman, I am going to be very responsive in summarizing simply 
to say that, as we well know, parents who have children who are in 
debate clubs and cheerleaders, choir, athletic programs in public 
schools have many of the enormous expenses that other parents have and 
we believe that equalizing that provision is very important. It 
certainly helps our low-income families, our middle-income families.
  Mr. Chairman, I would like to ask my colleagues to support this 
amendment.
  Mr. CONYERS. Mr. Chairman, will the gentlewoman yield?
  Ms. JACKSON-LEE of Texas. I yield to the gentleman from Michigan.
  Mr. CONYERS. Mr. Chairman, I have a full page statement touting all 
of the excellent parts of the amendment of the gentlewoman from Texas 
(Ms. Jackson-Lee), but I think I will insert them in the Record instead 
and congratulate the gentlewoman and thank the chairman of the 
committee for joining in his support.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the ranking member 
for his leadership and his excellent statement.
  Mr. Chairman, I ask support of my amendment.
  Mr. Chairman, this amendment to page 11, line 1 of H.R. 333 merely 
adds a debtor's monthly public school expenses as an allowable expense 
under the means test. My amendment would put public school expenses at 
an equal footing with that of private school expenses, which is already 
included in the bill.
  I am surprised that my colleagues in the majority do not know that 
there are expenses associated with sending children to public schools. 
Parents whose children participate in extra-curricular activities such 
as, the debate club, bank, choir, athletic programs, cheerleaders, or 
dozens of other courses that are offered in public schools. These 
courses require that parents provide financial support from their own 
resources in order to support their child's participation in these 
programs. It is very unfair to assume that only parents whose children 
attend private schools have expenses worth protecting under this new 
bankruptcy reform legislation. What does not make sense is protecting 
private education, for no other reason other than it is private 
education, while ignoring the overwhelming majority of children who's 
parents send their children to public schools.
  The principal problem with the means test is that the rigid one-size-
fits-all in determining eligibility for chapter 7 and the operation of 
chapter 13 will often operate in an arbitrary fashion.
  Access to bankruptcy would be more difficult, especially for low-
income filers who are not able to meet the requirements because they 
cannot list public school expenses as an allowable expense as would 
their private school counterparts. The ``safe harbor'' provision that 
is supposed to protect some low-income families from the application of 
the IRS standards will not protect many single mothers, because it is 
based on the combined income of the debtor and the debtor's spouse--
even if they are separated and the mother who is filing for bankruptcy 
is receiving no support from the nondebtor spouse from whom she is 
separated. As the committee knows, the majority of low-income families 
send their children to public schools (as opposed to higher income 
people) because they cannot afford the private school tuition. It would 
seem that if the true intent of this bill were to assist all Americans, 
a provision recognizing public school tuition would have accompanied 
the recognition of private school tuition as an allowable expense under 
the ``means test,'' however, this is not the case.
  Under my amendment, low-income people will have a more flexible 
standard (that is consistent with that of high-income people) that 
would allow the debtor to have a fair opportunity to financial 
recourse, which is not possible under the legislation as written. I 
think such a change in the standard would be warmly welcomed for 
middle-income and low-income filers. We cannot in good conscience allow 
such an unbalanced approach to prevail, Mr. Chairman.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentlewoman from Texas (Ms. Jackson-Lee).
  The amendment was agreed to.
  The CHAIRMAN pro tempore. It is now in order to consider amendment 
No. 3 printed in House Report 107-4.


           Amendment No. 3 Offered By Mr. Green of Wisconsin

  Mr. GREEN of Wisconsin. Mr. Chairman, I offer amendment No. 3.
  The CHAIRMAN pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

  Amendment No. 3 offered by Mr. Green of Wisconsin:
       Page 121, after line 16, insert the following (and make 
     such technical and conforming changes as may be appropriate):

     SEC. 231. PROHIBITION ON DISCLOSURE OF IDENTITY OF MINOR 
                   CHILDREN.

       (a) Prohibition.--Title 11 of the United States Code, as 
     amended by section 106, is amended by inserting after section 
     111 the following:

     ``Sec. 112. Prohibition on disclosure of identity of minor 
       child

       ``In a case under this title, the debtor may be required to 
     provide information regarding a minor child involved in 
     matters under this title, but may not be required to disclose 
     in the public records in the case the name of such minor 
     child.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     1 of title 11, United States Code, is amended by adding at 
     the end the following:

``112. Prohibition on disclosure of name of minor child.''.

  The CHAIRMAN pro tempore. Pursuant to House Resolution 71, the 
gentleman from Wisconsin (Mr. Green) and a Member opposed each will 
control 10 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. Green).
  Mr. GREEN of Wisconsin. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, let me begin by congratulating not only the gentleman 
from Pennsylvania (Mr. Gekas) but also the gentleman from Wisconsin 
(Mr. Sensenbrenner) for their fine work in moving this forward. This 
amendment that I rise to address is not so much an amendment about 
bankruptcy as it is an effort of closing a small, unintended hole in 
child safety. It in no way restricts the flow of necessary information 
regarding debtor's financial records, and it does not attempt to deal 
with larger issues of privacy or the Internet.
  What it does try to do is take a small, modest step toward protecting

[[Page 2609]]

children from unnecessary exposure to harm. The problem is a real 
simple one, Mr. Chairman.
  When someone files for bankruptcy, they are naturally required to 
disclose information regarding themselves and their dependents. This 
information is vital to ensuring the integrity of the bankruptcy 
process, but as we all recognize, it is also very detailed and 
personal.
  Schedule I, for example, a document entitled ``The Current Income of 
Individual Debtors,'' requires the debtor to list his or her 
dependents, their names, ages and their relationship to the debtor. 
Now, much of this information is important to creditors. Unfortunately, 
if it is left unchanged it is also all of the information that some 
people might need to seek out and contact children. I think in this 
dangerous world, that represents a problem.
  My amendment makes a single, small, modest change that makes no 
difference to the information that creditors need but perhaps a great 
difference to debtors. It simply prevents the name of the child from 
being disclosed in these forms that go into the public domain. That is 
all that it attempts to do.
  Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?
  Mr. GREEN of Wisconsin. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Mr. Chairman, I am happy to support the amendment. 
I think the points made by my colleague, the gentleman from Wisconsin 
(Mr. Green) are absolutely correct, and I believe that this would be a 
significant improvement to this bill and hope that the committee adopts 
it.
  Mr. GREEN of Wisconsin. Mr. Chairman, I thank the chairman for his 
graciousness.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, will the gentleman yield?
  Mr. GREEN of Wisconsin. I yield to the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, let me say that my preceding 
amendment dealing with children being educated follows my concern as 
chair of the Congressional Children's Caucus and welcomes this 
amendment. I congratulate the gentleman for it.
  The personal information about children certainly needs to be avoided 
in this instance and the gentleman is right, it has no impact on this 
legislation. We are happy to support his amendment, and 
congratulations.
  Mr. Chairman, I rise in support of the amendment offered by the 
gentleman from Wisconsin and commend him for taking action on a problem 
that was identified during our Committee hearing on the bill. While I 
agree that we must protect our children by removing their names from 
bankruptcy filings, which now can be accessed electronically over the 
Internet, this amendment is only the tip of the iceberg.
  We have a much bigger problem--namely the availability of all kinds 
of personal information that is part of a bankruptcy proceeding. This 
information is now available for the world to see over the Internet. 
That is why our Democratic substitute limits electronic access to all 
personal, financial, or medical data that is part of a bankruptcy 
petition.
  In addition to the names of children, there are all kinds of other 
information that debtors have to disclose in bankruptcy. There is basic 
personal information such as the debtor's social security number, 
telephone number, credit card and bank account numbers, medical 
history, mother's maiden name, and other highly sensitive data. I don't 
think any one of us would want this information to be just a point-and-
click away from being available to persons who have no legitimate use 
for the information.
  In addition, there's even a risk that personal information about 
third parties will be posted on the Internet. If the debtor is paying 
the medical expenses for a child or an aging parent, that medical 
information about someone other than the debtor will be just a point-
and-click away as well.
  If we really want to protect our children whose parent or guardian 
files for bankruptcy, then we've got to do more than just keep their 
names out of the filings. A provision in our Democratic substitute 
amendment that was originally drafted by Senator Leahy would protect 
not only the names of children and all other sensitive information by 
limiting electronic access to such information only to those parties 
who certify that they are qualified to obtain it.
  If we really want to protect the privacy of our children in 
bankruptcy, then we've got to support the Green amendment and the 
additional privacy protections in the Democratic substitute.
  Mr. GREEN of Wisconsin. Mr. Chairman, I thank the gentlewoman from 
Texas (Ms. Jackson-Lee) for her support.
  Mr. LAMPSON. Mr. Chairman, today I rise in support of Congressman 
Green's amendment would prevent the name of a child from being 
disclosed during a bankruptcy proceeding. Although this is a small part 
of the bigger picture of privacy, this amendment will have an immediate 
effect in protecting innocent children.
  Last Congress, our former colleague and my former co-chairman of the 
Congressional Missing and Exploited Children's Caucus, Congressman Bob 
Franks, introduced legislation that would have amended the Federal 
criminal code to prohibit and set penalties for specified activities 
relating to personal information about a child including knowingly 
selling such information (by a list broker) without the written consent 
of a parent of that child, knowing that such information pertains to a 
child; and distributing or soliciting any such information, knowing or 
having reason to believe that the information will be used to abuse or 
physically harm the child.
  How easily could a pedophile construct a list of names, ages and 
addresses of children simply by obtaining a list of bankruptcy filings 
over the Internet? Very easily.
  I contacted the National Center for Missing and Exploited Children 
just to be certain that NCMEC doesn't use bankruptcy filings in aiding 
their searches for missing children. Few, if any, of these filings are 
used. While it may not be very common practice for a child predator to 
use these filings to his or her advantage, I would rather not take that 
chance.
  I urge my colleagues to support Congressman Green's amendment to keep 
our children safe.
  Mr. GREEN of Wisconsin. Mr. Chairman, I yield back the balance of my 
time.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentleman from Wisconsin (Mr. Green).
  The amendment was agreed to.
  The CHAIRMAN pro tempore. It is now in order to consider amendment 
No. 4 printed in House Report 107-4.


                  Amendment No. 4 Offered by Mr. Oxley

  Mr. OXLEY. Mr. Chairman, I offer amendment No. 4.
  The CHAIRMAN pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Oxley:
       Page 286, line 10, insert ``mortgage'' before ``loan''.
       Page 286, line 11, insert ``, and including any repurchase 
     or reverse repurchase transaction on any such security, 
     certificate of deposit, loan, interest, group or index, or 
     option'' before the semicolon at the end.
       Page 287, line 10, insert a comma after ``index''.
       Page 288, line 18, insert ``or any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in this clause'' after ``clause''.
       Page 291, line 8, insert ``or any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in this clause'' after ``clause''.
       Page 293, line 7, insert ``or any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in any such subclause'' after 
     ``(III), or (IV)''.
       Page 296, line 2, insert ``or any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in any such subclause'' after ``(IV), 
     or (V)''.
       Page 297, line 7, insert ``total return,'' before 
     ``credit''.
       Page 297, line 15, insert ``that is'' before ``similar''.
       Page 297, line 17, strike ``that'' and insert ``and that 
     has been,''.
       Page 297, beginning on line 18, strike ``regularly entered 
     into in the swap market'' and insert ``the subject of 
     recurrent dealings in the swap markets''.
       Page 298, line 1, insert ``quantitative measures associated 
     with an occurrence, extent of an occurrence or contingency 
     associated with a financial, commercial or economic 
     consequence,'' before ``or''.
       Page 298, line 1, insert ``or financial'' after 
     ``economic''.
       Page 298, line 2, insert ``or financial'' after 
     ``economic''.
       Page 299, beginning on line 4, strike ``subparagraph'' and 
     insert ``subclause''.
       Page 299, line 5, insert ``or any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in any such subclause'' before the 
     period at the end.

[[Page 2610]]

       Page 299, line 19, insert ``the Gramm-Leach-Bliley Act, the 
     Legal Certainty for Bank Products Act of 2000,'' before 
     ``and''.
       Page 305, line 19, strike ``contract'' and insert 
     ``contracts''.
       Page 306, line 18, insert ``cleared by or'' before 
     ``subject''.
       Page 307, line 2, insert ``and the term `clearing 
     organization' means a `clearing organization' as defined in 
     Section 402 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991'' after ``financial institution''.
       Page 313, line 2, strike ``or that'' and insert ``, that''.
       Page 313, line 4, insert ``or that is a multilateral 
     clearing organization (as defined in section 408 of this 
     Act)'' before the closing quotation marks.
       Page 317, line 12, strike ``Banks and'' insert ``Banks,''.
       Page 317, line 13, insert ``, Certain Uninsured State 
     Member Banks, and Edge Act Corporations'' before the period.
       Page 317, line 21, strike ``banks and'' and insert 
     ``banks,''.
       Page 317, line 22, insert ``, certain uninsured state 
     member banks, and edge act corporations'' before the period.
       Page 318, line 2, insert ``or a corporation chartered under 
     section 25A of the Federal Reserve Act or an uninsured State 
     member bank which operates, or operates as, a multilateral 
     clearing organization pursuant to section 409 of this Act,'' 
     after ``agency''.
       Page 318, line 7, insert ``in the case of an uninsured 
     national bank or uninsured Federal branch or agency, or to 
     the receiver of a corporation chartered under section 25A of 
     the Federal Reserve Act or an uninsured State member bank 
     appointed by the Board of Governors of the Federal Reserve 
     System in the case of a corporation chartered under section 
     25A of the Federal Reserve Act or an uninsured State member 
     bank'' before the semicolon at the end.
       Page 318, line 15, insert ``in the case of an uninsured 
     national bank or uninsured Federal branch or agency, or to 
     the receiver or conservator of a corporation chartered under 
     section 25A of the Federal Reserve Act or an uninsured State 
     member bank appointed by the Board of Governors of the 
     Federal Reserve System in the case of a corporation chartered 
     under section 25A of the Federal Reserve Act or an uninsured 
     State member bank'' before ``; and''.
       Page 318, line 18, strike ``bank or'' and insert ``bank,''.
       Page 318, line 19, insert ``a corporation chartered under 
     section 25A of the Federal Reserve Act or an uninsured State 
     member bank which operates, or operates as, a multilateral 
     clearing organization pursuant to section 409 of this Act'' 
     before the period at the end.
       Page 318, line 21, strike ``bank or'' and insert ``bank,''.
       Page 318, line 22, insert ``a corporation chartered under 
     section 25A of the Federal Reserve Act or an uninsured State 
     member bank which operates, or operates as, a multilateral 
     clearing organization pursuant to section 409 of this Act,'' 
     after ``agency''.
       Page 319, line 3, insert ``and the Board of Governors of 
     the Federal Reserve System'' after ``Currency''.
       Page 319, line 4, insert ``each'' after ``may''.
       Page 319, line 8, insert ``and the Board of Governors of 
     the Federal Reserve System'' after ``Currency''.
       Page 319, line 8, insert ``each'' after ``shall''.
       Page 321, line 6, insert ``or any guarantee or 
     reimbursement obligation by or to a forward contract merchant 
     or financial participant in connection with any agreement or 
     transaction referred to in any such subparagraph,'' after 
     ``(C), or (D)''.
       Page 321, beginning on line 7, strike ``actual value of 
     such contract on the date of the filing of the petition'' and 
     insert ``damages in connection with any such agreement or 
     transaction measured in accordance with Section 562 of this 
     title''.
       Page 323, line 18, insert ``or any guarantee or 
     reimbursement obligation by or to a repo participant or 
     financial participant in connection with any agreement or 
     transaction referred to in any such clause'' after ``(iii), 
     or (iv)'' .
       Page 323, beginning on line 19, strike ``actual value of 
     such contract on the date of the filing of the petition'' and 
     insert ``damages in connection with any such agreement or 
     transaction measured in accordance with section 562 of this 
     title''.
       Page 324, beginning on line 11, strike ``which is an 
     interest rate swap'' and insert ``which is--

       ``(I) an interest rate swap''.

       Page 324, beginning on line 13, strike ``including--'' and 
     all that follows through ``a rate floor'' on line 14, and 
     insert ``including a rate floor''
       Page 325, line 3, insert ``total return,'' before ``credit 
     spread''.
       Page 325, line 12, insert ``that is'' before ``similar''.
       Page 325, line 13, insert ``and'' before ``that''.
       Page 325, line 14, insert ``has been,'' before ``is''.
       Page 325, beginning on line 15, strike ``regularly entered 
     into in the swap market'' and insert ``the subject of 
     recurrent dealings in the swap markets''.
       Page 325, line 23, insert ``quantitative measures 
     associated with an occurrence, extent of an occurrence or 
     contingency associated with a financial, commercial or 
     economic consequence,'' after ``instruments,''.
       Page 325, line 24, insert ``or financial'' after 
     ``economic''.
       Page 325, line 25, insert ``or financial'' before ``risk''.
       Page 326, line 24, insert ``or any guarantee or 
     reimbursement obligation by or to a swap participant or 
     financial participant in connection with any agreement or 
     transaction referred to in any such clause'' after ``through 
     (v)''.
       Page 326, beginning on line 25, strike ``actual value of 
     such contract on the date of the filing of the petition'' and 
     insert ``damages in connection with any such agreement or 
     transaction measured in accordance with section 562 of this 
     title''.
       Page 327, line 14, insert ``the Gramm-Leach-Bliley Act, the 
     Legal Certainty for Bank Products Act of 2000,'' before 
     ``and''.
       Page 328, line 6, insert ``mortgage'' before ``loan''.
       Page 328, line 7, insert ``, and including any repurchase 
     or reverse repurchase transaction on any such security, 
     certificate of deposit, loan, interest, group or index, or 
     option'' before the semicolon at the end.
       Page 329, line 25, strike the comma.
       Page 330, line 2, insert ``or any guarantee or 
     reimbursement obligation by or to a stockbroker, securities 
     clearing agency, financial institution or financial 
     participant in connection with any agreement or transaction 
     referred to in this subparagraph'' before the comma after 
     ``subparagraph''.
       Page 330, beginning on line 3, strike ``actual value of 
     such contract on the date of the filing of the petition'' and 
     insert ``damages in connection with any such agreement or 
     transaction measured in accordance with section 562 of this 
     title''.
       Page 331, line 12, insert ``or any guarantee or 
     reimbursement obligation by or to a commodity broker or 
     financial participant in connection with any agreement or 
     transaction referred to in this paragraph'' before the comma 
     after ``paragraph''.
       Page 331, beginning on line 12, strike ``actual value of 
     such contract on the date of the filing of the petition'' and 
     insert ``damages in connection with any such agreement or 
     transaction measured in accordance with section 562 of this 
     title''.
       Page 331, after line 18, insert the following new paragraph 
     (and redesignate subsequent paragraphs accordingly):
       (1) by striking paragraph (22) and inserting the following:
       ``(22) `financial institution' means--
       ``(A) a Federal reserve bank, or an entity (domestic or 
     foreign) that is a commercial or savings bank, industrial 
     savings bank, savings and loan association, trust company, or 
     receiver or conservator for such entity and, when any such 
     Federal reserve bank, receiver, conservator or entity is 
     acting as agent or custodian for a customer in connection 
     with a securities contract, as defined in section 741, such 
     customer; or
       ``(B) in connection with a securities contract, as defined 
     in section 741, an investment company registered under the 
     Investment Company Act of 1940;'';
       Page 332, line 13, strike ``participant' means an entity'' 
     and insert ``participant' means--
       ``(A) an entity''.
       Page 332, line 15, insert ``swap agreement, repurchase 
     agreement,'' after ``commodity contract,''.
       Page 333, line 3, strike the closing quotation marks and 
     the second semicolon.
       Page 333, after line 3, insert the following new 
     subparagraph:
       ``(B) a `clearing organization' (as such term is defined in 
     section 402 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991);''; and
       Page 333, line 7, strike the comma after ``entity''.
       Page 333, line 9, strike ``or'' after ``merchants''.
       Page 334, line 3, insert ``or any guarantee or 
     reimbursement obligation related to 1 or more of the 
     foregoing'' before the semicolon.
       Page 334, line 24, strike ``and''.
       Page 335, line 2, strike ``and''.
       Page 335, line 7, insert ``or financial participant'' after 
     ``swap participant''.
       Page 335, line 13, insert ``or financial participant'' 
     after ``swap participant''.
       Page 335, line 15, strike ``and''.
       Page 335, line 17, insert ``or financial participant'' 
     after ``swap participant''.
       Page 336, line 10, strike ``and''.
       Page 337, strike line 8.
       Page 337, after line 11, insert the following new 
     subparagraph:
       (C) by inserting `or financial participant' after `swap 
     participant' each time such term appears; and
       Page 339, strike line 12.
       Page 339, line 15, strike the period at the end and insert 
     ``; and''.
       Page 339, after line 15, insert the following new 
     paragraph:
       (3) by striking so much of the text of the second sentence 
     as appears before ``whether'' and inserting ``As used in this 
     section, the term ``contractual right'' includes a right set 
     forth in a rule or bylaw of a derivatives clearing 
     organization (as defined in the Commodity Exchange Act), a 
     multilateral clearing organization (as defined in the Federal

[[Page 2611]]

     Deposit Insurance Corporation Improvement Act of 1991), a 
     national securities exchange, a national securities 
     association, a contract market designated under the Commodity 
     Exchange Act, a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act) or in a 
     resolution of the governing board thereof and a right,''
       Page 339, strike line 23.
       Page 340, line 3, strike the period at the end and insert 
     ``; and''
       Page 340, after line 3, insert the following new paragraph:
       (3) by striking so much of the text of the third sentence 
     as appears before ``whether'' and inserting ``As used in this 
     section, the term ``contractual right'' includes a right set 
     forth in a rule or bylaw of a derivatives clearing 
     organization (as defined in the Commodity Exchange Act), a 
     multilateral clearing organization (as defined in the Federal 
     Deposit Insurance Corporation Improvement Act of 1991), a 
     national securities exchange, a national securities 
     association, a contract market designated under the Commodity 
     Exchange Act, a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act) or in a 
     resolution of the governing board thereof and a right,
       Page 340, line 14, strike ``and''.
       Page 340, line 18, strike the period and insert ``; and''.
       Page 340, after line 18, insert the following new 
     paragraph:
       (4) by striking so much of the text of the second sentence 
     as appears before ``whether'' and inserting ``As used in this 
     section, the term `contractual right' includes a right set 
     forth in a rule or bylaw of a derivatives clearing 
     organization (as defined in the Commodity Exchange Act), a 
     multilateral clearing organization (as defined in the Federal 
     Deposit Insurance Corporation Improvement Act of 1991), a 
     national securities exchange, a national securities 
     association, a contract market designated under the Commodity 
     Exchange Act), a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act) or in a 
     resolution of the governing board thereof and a right,''.
       Page 341, line 3, insert ``; proceedings under chapter 15'' 
     after ``contracts''.
       Page 342, line 11, insert ``traded on or subject to the 
     rules of a contract market designated under the Commodity 
     Exchange Act or a derivatives transaction execution facility 
     registered under the Commodity Exchange Act'' after 
     ``contract''.
       Page 342, line 22, insert ``and traded on or subject to the 
     rules of a contract market designated under the Commodity 
     Exchange Act or a derivatives transaction execution facility 
     registered under the Commodity Exchange Act'' after 
     ``debtor''.
       Page 343, line 5, strike ``agreement'' and insert ``or 
     similar arrangement''.
       Page 343, beginning on line , strike ``section 
     5a(a)(12)(A)'' and insert ``paragraph (1) or (2) of section 
     5c(c)''.
       Page 343, line 10, strike ``been approved'' and insert 
     ``not been abrogated or rendered ineffective by the Commodity 
     Futures Trading Commission''.
       Page 343, beginning on line 18, strike ``national'' and all 
     that follows through ``market'' on line 21, and insert 
     ``derivatives clearing organization (as defined in the 
     Commodity Exchange Act), a multilateral clearing organization 
     (as defined in the Federal Deposit Insurance Corporation 
     Improvement Act of 1991), a national securities exchange, a 
     national securities association, a contract market designated 
     under the Commodity Exchange Act, a derivatives transaction 
     execution facility registered under the Commodity Exchange 
     Act, or a board of trade (as defined in the Commodity 
     Exchange Act)''.
       Page 344, strike the item following line 18, and insert the 
     following new item:
``561. Contractual right to terminate, liquidate, accelerate, or offset 
              under a master netting agreement and across contracts; 
              proceedings under chapter 15.''.
       Page 345, line 21, insert ``financial participants'' before 
     ``securities''.
       Page 346, line 9, insert ``in subsection (a)(2)(B)(ii), by 
     inserting before the semicolon, and'' after ``(1)''.
       Page 346, line 10, insert a comma after ``period'',
       Page 346, after line 22, insert the following new paragraph 
     (and redesignate the subsequent paragraphs as paragraphs (3), 
     (4), (7), and (8), respectively):
       (2) in sections 362(b)(7) and 546(f), by inserting ``or 
     financial participant'' after ``repo participant'' each time 
     such term appears;
       Page 347, after line 2, insert the following new 
     paragraphs:
       (5) in section 548(d)(2)(C), by inserting ``or financial 
     participant'' after ``repo participant'';
       (6) in section 548(d)(2)(D), by inserting ``or financial 
     participant'' after ``swap participant'';
       Page 347, beginning on line 6, strike ``by inserting'' and 
     all that follows through ``contract market'' on line 8, and 
     insert ``by striking the second sentence and inserting `As 
     used in this section, the term ``contractual right'' includes 
     a right set forth in a rule or bylaw of a derivatives 
     clearing organization (as defined in the Commodity Exchange 
     Act), a multilateral clearing organization (as defined in the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991), a national securities exchange, a national securities 
     association, a contract market designated under the Commodity 
     Exchange Act, a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act)' ''.
       Page 347, line 12, strike ``and''.
       Page 347, line 14, strike the period and insert a 
     semicolon.
       Page 347, after line 14, insert the following new 
     paragraphs:
       (9) in section 559, by inserting ``or financial 
     participant'' after ``repo participant'' each time such term 
     appears; and
       (10) in section 560, by inserting ``or financial 
     participant'' after ``swap participant''.
       Page 348, strike the item following line 4, and insert the 
     following new item:
``767. Commodity broker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              financial participants, securities clearing agencies, 
              swap participants, repo participants, and master netting 
              agreement participants.'';
       Page 348, strike the item following line 7, and insert the 
     following new item:
``753. Stockbroker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              financial participants, securities clearing agencies, 
              swap participants, repo participants, and master netting 
              agreement participants.''.
       Page 348, after the item following line 7, insert the 
     following new section:

     SEC. 907A. SECURITIES BROKER AND COMMODITY BROKER 
                   LIQUIDATION.

       The Securities and Exchange Commission and the Commodity 
     Futures Trading Commission may consult with each other with 
     respect to--
       (1) whether, under what circumstances, and the extent to 
     which security futures products will be treated as commodity 
     contracts or securities in a liquidation of a person that is 
     both a securities broker and a commodity broker; and
       (2) the treatment in such a liquidation of accounts in 
     which both commodity contracts and securities are carried.
       Page 352, line 1, insert a comma after ``101''.
       Page 352, line 2, strike ``and 741'' and insert ``741, and 
     761''.

  The CHAIRMAN pro tempore. Pursuant to House Resolution 71, the 
gentleman from Ohio (Mr. Oxley) and a Member opposed each will control 
5 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Oxley).

                              {time}  1245

  Mr. OXLEY. Mr. Chairman, I yield myself 3 minutes.
  Mr. Chairman, I rise today in support of the amendment offered by the 
ranking minority member of the Committee on Financial Services, the 
gentleman from New York (Mr. LaFalce), and myself.
  Our amendment makes several technical and conforming changes to Title 
IX of H.R. 333. Currently Title IX contains the provisions of H.R. 1161 
which passed the House three times in the 106th Congress but did not 
make it to the President.
  That legislation was based upon recommendations of the Clinton 
administration. It had broad bipartisan support, and was sought by the 
financial services industry and the regulatory community.
  I am very pleased we have brought this bill back to the floor so 
quickly and successfully. The majority leader and the chairman, the 
gentleman from Wisconsin (Mr. Sensenbrenner), both deserve high praise 
for their work on this legislation.
  Unfortunately, the bill before the House today does not make changes 
to these provisions necessitated by the later enactment of the 
Commodities Futures Modernization Act of 2000 sponsored by our good 
friend, Mr. Ewing. Without the changes in this amendment, similar kinds 
of financial contracts and market participants could be treated 
differently under the banking laws and the bankruptcy laws, where I 
come from.

[[Page 2612]]

  Mr. Chairman, this does not make any sense. To my knowledge, this 
amendment is noncontroversial and has the support of the Treasury 
Department, the President's Working Group on Financial Markets, and the 
financial services industry. I am unaware of any opposition to the 
substance of this amendment.
  We look forward to continuing to work with the administration and our 
colleagues in conference to address the remaining issues that were not 
included in this amendment. Mr. Chairman, this bill is a good bill and 
enjoys broad support.
  I also want to thank my ranking minority member, the gentleman from 
New York (Mr. LaFalce), for his assistance in developing this amendment 
which is so important to the smooth operation of our financial markets.
  Mr. Chairman, this is a good amendment and a good bill. I urge all of 
my colleagues to support both.
  Mr. Chairman, I am including for the Record some material explaining 
the provisions of title IX and the changes made by this amendment to 
provide needed technical background. This is a good amendment and a 
good bill, and I urge all of my colleagues to support both.

    Section-by-Section Analysis of Title IX of the Bankruptcy Abuse 
       Prevention and Consumer Protection Act of 2001 (H.R. 333)


                            i. introduction

       Title IX of H.R. 333 is based on the work of an interagency 
     working group under the auspices of the President's Working 
     Group on Financial Markets following a review of current 
     statutory provisions governing the treatment of qualified 
     financial contracts and similar financial contracts upon the 
     insolvency of a counterparty.


                              ii. purpose

       Title IX amends the U.S. Bankruptcy Code, the Federal 
     Deposit Insurance Act (FDIA), as amended by the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (FIRREA), the payment system risk reduction and meeting 
     provisions of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (FDICIA), and the Securities Investor 
     Protection Act of 1970 (SIPA). These amendments address the 
     treatment of certain financial transactions following the 
     insolvency of a party to such transactions. The amendments 
     are designed to clarify and improve the consistency between 
     the applicable statutes and to minimize the risk of a 
     disruption within or between financial markets upon the 
     insolvency of a market participant.


                            iii. background

       Since its adoption in 1978, the Bankruptcy Code has been 
     amended several times to afford different treatment for 
     certain financial transactions upon the bankruptcy of a 
     debtor, as compared with the treatment of other commercial 
     contracts and transactions. These amendments were designed to 
     further the policy goal of minimizing the systemic risks 
     potentially arising from certain interrelated financial 
     activities and markets. Similar amendments have been made to 
     the FDIA and FDICIA, and both the Federal Deposit Insurance 
     Corporation (FDIC) and the Securities Investor Protection 
     Corporation (SIPC) have issued policy statements and letters 
     clarifying general issues in this regard.
       Systemic risk has been defined as the risk that a 
     disruption--at a firm, in a market segment, to a settlement 
     system, etc--can cause widespread difficulties at other 
     firms, in other market segments or in the financial system as 
     a whole. If participants in certain financial activities are 
     unable to enforce their rights to terminate financial 
     contracts with an insolvent entity in a timely manner, to 
     offset or net payment and other transfer obligations and 
     entitlements arising under such contracts, and to foreclose 
     on collateral securing such contracts, the resulting 
     uncertainty and potential lack of liquidity could increase 
     the risk of an inter-market disruption.
       Congress has in the past taken steps to ensure that the 
     risk of such systemic events is minimized. For example, both 
     the Bankruptcy Code and the FDIA contain provisions that 
     protect the rights of financial participants to terminate 
     swap agreements, forward contracts, securities contracts, 
     commodity contracts and repurchase agreements following the 
     bankruptcy or insolvency of a counterparty to such contracts 
     or agreements. Furthermore, other provisions prevent 
     transfers made under such circumstances from being avoided as 
     preferences or fraudulent conveyances (except when made with 
     actual intent to defraud and taken in bath faith). 
     Protections also are afforded to ensure that the 
     acceleration, termination, liquidation, netting, setoff and 
     collateral foreclosure provisions of such transactions and 
     master agreements for such transactions are enforceable.
       In addition, FDICIA was enacted in 1991 to protect the 
     enforceability of close-out netting provisions in ``netting 
     contracts'' between ``financial institutions.'' FDICIA states 
     that the goal of enforcing netting arrangements is to reduce 
     systemic risk within the banking system and financial 
     markets.
       The orderly resolution of insolvencies involving 
     counterparties to such contracts also is an important element 
     in the reduction of systemic risk. The FDIA allows the 
     receiver for an insolvent insured depository institution the 
     opportunity to review the status of certain contracts to 
     determine whether to terminate or transfer the contracts to 
     new counterparties. These provisions provide the receiver 
     with flexibility in determining the most appropriate 
     resolution for the failed institution and facilitate the 
     reduction of systemic risk by permitting the transfer, rather 
     than termination, of such contracts.


              iv. summary and section-by-section analysis

       In general, Title IX is designed to clarify the treatment 
     of certain financial contracts upon the insolvency of a 
     counterparty and to promote the reduction of systemic risk. 
     It furthers the goals of prior amendments to the Bankruptcy 
     Code and the FDIA regarding the treatment of those financial 
     contracts and of the payment system risk reduction provisions 
     in FDICIA. It has four principal purposes:
       1. To strengthen the provisions of the Bankruptcy Code and 
     the FDIA that protect the enforceability of acceleration, 
     termination, liquidation, close-out netting, collateral 
     foreclosure and related provisions of certain financial 
     agreements and transactions.
       2. To harmonize the treatment of these financial agreements 
     and transactions under the Bankruptcy Code and the FDIA.
       3. To amend the FDIA and FDICIA to clarify that certain 
     rights of the FDIC acting as conservator or receiver for a 
     failed insured depository institution (and in some 
     situations, rights of SIPC and receivers of certain uninsured 
     institutions) cannot be defeated by operation of the terms of 
     FDICIA.
       4. To make other substantive and technical amendments to 
     clarify the enforceability of financial agreements and 
     transactions in bankruptcy or insolvency.
       All these changes are designed to further minimize systemic 
     risk to the banking system and the financial markets.
     Section 901
       Subsections (a) through (f) amend the FDIA definitions of 
     ``qualified financial contract,'' ``securities contract,'' 
     ``commodity contract,'' ``forward contract,'' ``repurchase 
     agreement'' and ``swap agreement'' to make them consistent 
     with the definitions in the Bankruptcy Code and to reflect 
     the enactment of the Commodity Futures Modernization Act of 
     2000 (CFMA). It is intended that the legislative history and 
     case law surrounding those terms, to the date of this 
     amendment, be incorporated into the legislative history of 
     the FDIA.
       Subsection (b) amends the definition of ``securities 
     contract'' expressly to encompass margin loans, to clarify 
     the coverage of securities options and to clarify the 
     coverage of repurchase and reverse repurchase transactions. 
     The inclusion of ``margin loans'' in the definition is 
     intended to encompass only those loans commonly known in the 
     securities industry as ``margin loans,'' such as arrangements 
     where a securities broker or dealer extends credit to a 
     customer in connection with the purchase, sale or trading of 
     securities, and does not include loans that are not commonly 
     referred to as ``margin loans,'' however documented. The 
     reference in subsection (b) to a ``guarantee by or to any 
     securities clearing agency'' is intended to cover other 
     arrangements, such as novation, that have an effect similar 
     to a guarantee. The reference to a ``loan'' of a security in 
     the definition is intended to apply to loans of securities, 
     whether or not for a ``permitted purpose'' under margin 
     regulations. The reference to ``repurchase and reverse 
     repurchase transactions'' is intended to eliminate any 
     inquiry under the qualified financial contract provisions of 
     the FDIA as to whether a repurchase or reverse repurchase 
     transaction is a purchase and sale transaction or a secured 
     financing. Repurchase and reverse repurchase transactions 
     meeting certain criteria are already covered under the 
     definition of ``repurchase agreement'' in the FDIA (and a 
     regulation of the FDIC). Repurchase and reverse repurchase 
     transactions on all securities (including, for example, 
     equity securities, asset-backed securities, corporate bonds 
     and commercial paper) are included under the definition of 
     ``securities contract''.
       Subsection (b) also specifies that purchase, sale and 
     repurchase obligations under a participation in a commercial 
     mortgage loan do not constitute ``securities contracts.'' 
     While a contract for the purchase, sale or repurchase of a 
     participation may constitute a ``securities contract,'' the 
     purchase, sale or repurchase obligation embedded in a 
     participation agreement does not make that agreement a 
     ``securities contract.''
       A number of terms used in the qualified financial contract 
     provisions, but not defined therein, are intended to have the 
     meanings set forth in the analogous provisions of the 
     Bankruptcy Code or FDICIA (for example, ``securities clearing 
     agency''). The term ``person,'' however, is not intended to 
     be so interpreted. Instead, ``person'' is intended to have 
     the meaning set forth in 1 U.S.C. Sec. 1.

[[Page 2613]]

       Subsection (e) amends the definition of ``repurchase 
     agreement'' to codify the substance of the FDIC's 1995 
     regulation defining repurchase agreement to include those on 
     qualified foreign government securities. See 12 C.F.R. 
     Sec. 360.5 The term ``qualified foreign government 
     securities'' is defined to include those that are direct 
     obligations of, or fully guaranteed by, central governments 
     of members of the Organization for Economic Cooperation and 
     Development (OECD). Subsection (e) reflects developments in 
     the repurchase agreement markets, which increasingly use 
     foreign government securities as the underlying asset. The 
     securities are limited to those issued by or guaranteed by 
     full members of the OECD, as well as countries that have 
     concluded special lending arrangements with the International 
     Monetary Fund associated with the Fund's General Arrangements 
     to Borrow.
       Subsection (e) also amends the definition of ``repurchase 
     agreement'' to include those on mortgage-related securities, 
     mortgage loans and interests therein, and expressly to 
     include principal and interest-only U.S. government and 
     agency securities as securities that can be the subject of a 
     ``repurchase agreement.'' The reference in the definition to 
     United States government- and agency-issued or fully 
     guaranteed securities is intended to include obligations 
     issued or guaranteed by Fannie Mae and the Federal Home Loan 
     Mortgage Corporation (Freddie Mac) as well as all obligations 
     eligible for purchase by Federal Reserve banks under the 
     similar language of section 14(b) of the Federal Reserve Act.
       This amendment is not intended to affect the status of 
     repos involving securities or commodities as securities 
     contracts, commodity contracts, or forward contracts, and 
     their consequent eligibility for similar treatment under the 
     qualified financial contract provisions. In particular, an 
     agreement for the sale and repurchase of a security would 
     continue to be a securities contract as defined in the FDIA, 
     even if not a ``repurchase agreement'' as defined in the 
     FDIA. Similarly, an agreement for the sale and repurchase of 
     a commodity, even though not a ``repurchase agreement'' as 
     defined in the FDIA, would continue to be a forward contract 
     for purposes of the FDIA.
       Subsection (e), like subsection (b) for ``securities 
     contracts,'' specifies that repurchase obligations under a 
     participation in a commercial mortgage loan do not make the 
     participation agreement a ``repurchase agreement.'' Such 
     repurchase obligations embedded in participations in 
     commercial loans (such as recourse obligations) do not 
     constitute a ``repurchase agreement.'' However, a repurchase 
     agreement involving the transfer of participations in 
     commercial mortgage loans with a simultaneous agreement to 
     repurchase the participation on demand or at a date certain 
     one year or less after such transfer would constitute a 
     ``repurchase agreement'' (as well as a ``securities 
     contract'').


       Subsection (f) amends the definition of ``swap agreement'' 
     to include an ``interest rate swap, option, future, or 
     forward agreement, including a rate floor, rate cap, rate 
     collar, cross-currency rate swap, and basis swap; a spot, 
     same day-tomorrow, tomorrow-next, forward, or other foreign 
     exchange or precious metals agreement; a currency swap, 
     option, future, or forward agreement; an equity index or 
     equity swap, option, future, or forward agreement; a debt 
     index or debt swap, option, future, or forward agreement; a 
     total return, credit spread or credit swap, option, future, 
     or forward agreement; a commodity index or commodity swap, 
     option, future, or forward agreement; or a weather swap, 
     weather derivative, or weather option.'' As amended, the 
     definition of ``swap agreement'' will update the statutory 
     definition and achieve contractual netting across 
     economically similar transactions.
       The definition of ``swap agreement'' originally was 
     intended to provide sufficient flexibility to avoid the need 
     to amend the definition as the nature and uses of swap 
     transactions matured. To that end, the phrase ``or any other 
     similar agreement'' was included in the definition. (The 
     phrase ``or any similar agreement'' has been added to the 
     definitions of ``forward contract,'' ``commodity contract,'' 
     ``repurchase agreement'' and ``securities contract'' for the 
     same reason.) To clarify this, subsection (f) expands the 
     definition of ``swap agreement'' to include ``any agreement 
     or transactions that is similar to any other agreement or 
     transaction referred to in [subsection (f)] . . . that has 
     been, is presently, or in the future becomes, the subject of 
     recurrent dealings in the swap markets and that is a forward, 
     swap, future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence or contingency associated with a financial, 
     commercial or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value.''
       The definition of ``swap agreement,'' however, should not 
     be interpreted to permit parties to document non-swaps as 
     swap transactions. Traditional commercial arrangements, such 
     as supply agreements, or other non-financial market 
     transactions, such as commercial, residential or consumer 
     loans, cannot be treated as ``swaps'' under either the FDIA 
     or the Bankruptcy Code simply because the parties purport to 
     document or label the transactions as ``swap agreements.'' In 
     addition, these definitions apply only for purposes of the 
     FDIA and the Bankruptcy Code. These definitions, and the 
     characterization of a certain transaction as a ``swap 
     agreement,'' are not intended to affect the characterization, 
     definition, or treatment of any instruments under any other 
     statute, regulation, or rule including, but not limited to, 
     the statutes, regulations or rules enumerated in subsection 
     (f). Similarly, the definition of ``securities contract,'' 
     ``repurchase agreement,'' ``forward contract,'' and 
     ``commodity contract,'' and the characterization of certain 
     transactions as such a contract or agreement, are not 
     intended to affect the characterization, definition, or 
     treatment of any instruments under any other statute, 
     regulation, or rule including, but not limited to, the 
     statutes, regulations or rules enumerated in subsection (f).
       The definition also includes any security agreement or 
     arrangement, or other credit enhancement, related to a swap 
     agreement, and any guarantee or reimbursement obligation 
     related to a swap agreement. This ensures that any such 
     agreement, arrangement or enhancement is itself deemed to be 
     a swap agreement, and therefore eligible for treatment as 
     such for purposes of termination, liquidation, acceleration, 
     offset and netting under the FDIA and the Bankruptcy Code. 
     Similar changes are made in the definitions of ``forward 
     contract,'' ``commodity contract,'' ``repurchase agreement'' 
     and ``securities contract.''
       The use of the term ``forward'' in the definition of ``swap 
     agreement'' is not intended to refer only to transactions 
     that fall within the definition of ``forward contract.'' 
     Instead, a ``forward'' transaction could be a ``swap 
     agreement'' even if not a ``forward contract.''
       Subsection (g) amends the FDIA by adding a definition for 
     ``transfer,'' which is a key term used in the FDIA, to ensure 
     that tit is broadly construed to encompass dispositions of 
     property or interests in property. The definition tracks that 
     in section 101 of the Bankruptcy Code.
       Subsection (h) makes clarifying technical changes to 
     conform the receivership and conservatorship provisions of 
     the FDIA. This subsection (h) also clarifies that the FDIA 
     expressly protects rights under security agreements, 
     arrangements or other credit enhancements related to one or 
     more qualified financial contracts (QFCs). An example of a 
     security arrangement is a right of setoff, and examples of 
     other credit enhancements are letters of credit, guarantees, 
     reimbursement obligations and other similar agreements.
       Subsection (i) clarifies that no provision of Federal or 
     state law relating to the avoidance of preferential or 
     fraudulent transfers (including the anti-preference provision 
     of the National Bank Act) can be invoked to avoid a transfer 
     made in connection with any QFC of an insured depository 
     institution in conservatorship or receivership, absent actual 
     fraudulent intent on the part of the transferee.
     Section 902
       Section 902 provides that no provision of law, including 
     FDICIA, shall be construed to limit the power of the FDIC to 
     transfer or to repudiate any QFC in accordance with its 
     powers under the FDIA. As discussed below, there has been 
     some uncertainty regarding whether or not FDICIA limits the 
     authority of the FDIC to transfer or to repudiate QFCs of an 
     insolvent financial institution. Section 902--as well as 
     other provisions in the Act--clarify that FDICIA does not 
     limit the transfer powers of the FDIC with respect to QFCs.
       Section 902 denies enforcement to ``walkaway'' clauses in 
     QFCs. A walkaway clause is defined as a provision that, after 
     calculation of a value of a party's position or an amount due 
     to or from one of the parties upon termination, liquidation 
     or acceleration of the QFC, either does not create a payment 
     obligation of a party or extinguishes a payment obligation of 
     a party in whole or in part solely because of such party's 
     status as a non-defaulting party.
     Section 903
       Subsection (a) amends the FDIA to expand the transfer 
     authority of the FDIC to permit transfers of QFCs to 
     ``financial institutions'' as defined in FDICIA or in 
     regulations. This provision will allow the FDIC to transfer 
     QFCs to a non-depository financial institution, provided the 
     institution is not subject to bankruptcy or insolvency 
     proceedings.
       The new FDIA provision specifies that when the FDIC 
     transfers QFCs that are cleared on or subject to the rules of 
     a particular clearing organization, the transfer will not 
     require the clearing organization to accept the transferee as 
     a member of the organization. This provision gives the FDIC 
     flexibility in resolving QFCs cleared on or subject to the 
     rules of a clearing organization, while preserving the 
     ability of such organizations to enforce appropriate risk 
     reducing membership requirements. The amendment does not 
     require the clearing organization to accept for clearing any 
     QFCs from the transferee, except on the terms and

[[Page 2614]]

     conditions applicable to other [parties permitted to clear 
     through that clearing organization. ``Clearing organization'' 
     is defined to mean a ``clearing organization'' within the 
     meaning of FDICIA (as amended both by the CFMA and by Section 
     906 of the Act).
       The new FDIA provision also permits transfers to an 
     eligible financial institution that is a non-U.S. person, or 
     the branch or agency of a non-U.S. person or a U.S. financial 
     institution that is not an FDIC-insured institution if, 
     following the transfer, the contractual rights of the parties 
     would be enforceable substantially to the same extent as 
     under the FDIA. It is expected that the FDIC would not 
     transfer QFCs to such a financial institution if there were 
     an impending change of law that would impair the 
     enforceability of the parties' contractual rights.
       Subsection (b) amends the notification requirements 
     following a transfer of the QFCs of a failed depository 
     institution to require the FDIC to notify any party to a 
     transferred QFC of such transfer by 5:00 p.m. (Eastern Time) 
     on the business day following the date of the appointment of 
     the FDIC acting as receiver or following the date of such 
     transfer by the FDIC acting as a conservator. This amendment 
     is consistent with the policy statement on QFCs issued by the 
     FDIC on December 12, 1989.
       Subsection (c) amends the FDIA to clarify the relationship 
     between the FDIA and FDICIA. There has been some uncertainty 
     whether FDICIA permits counterparties to terminate or 
     liquidate a QFC before the expiration of the time period 
     provided by the FDIA during which the FDIC may repudiate or 
     transfer a QFC in a conservatorship or receivership. 
     Subsection (c) provides that a party may not terminate a QFC 
     based solely on the appointment of the FDIC as receiver until 
     5:00 p.m. (Eastern Time) on the business day following the 
     appointment of the receiver or after the person has received 
     notice of a transfer under FDIA section 11(d)(9), or based 
     solely on the appointment of the FDIC as conservator, 
     notwithstanding the provisions of FDICIA. This provides the 
     FDIC with an opportunity to undertake an orderly resolution 
     of the insured depository institution.
       The amendment also prohibits the enforcement of rights of 
     termination or liquidation that arise solely because of the 
     insolvency of the institution or are based on the ``financial 
     condition'' of the depository institution in receivership or 
     conservatorship. For example, termination based on a cross-
     default provision in a QFC that is triggered upon a default 
     under another contract could be rendered ineffective if such 
     other default was caused by an acceleration of amounts due 
     under that other contract, and such acceleration was based 
     solely on the appointment of a conservator or receiver for 
     that depository institution. Similarly, a provision in a QFC 
     permitting termination of the QFC based solely on a 
     downgraded credit rating of a party will not be enforceable 
     in an FDIC receivership or conservatorship because the 
     provision is based solely on the financial condition of the 
     depository institution in default. However, any payment, 
     delivery or other performance-based default, or breach of a 
     representation or covenant putting in question the 
     enforceability of the agreement, will not be deemed to be 
     based solely on financial condition for purposes of this 
     provision. The amendment is not intended to prevent 
     counterparties from taking all actions permitted and 
     recovering all damages authorized upon repudiation of any QFC 
     by a conservator or receiver, or from taking actions based 
     upon a receivership or other financial condition-triggered 
     default in the absence of a transfer (as contemplated in 
     Section 11(e)(10) of the FDIA).
       The amendment allows the FDIC to meet its obligation to 
     provide notice to parties to transferred QFCs by taking steps 
     reasonably calculated to provide notice to such parties by 
     the required time. This is consistent with the existing 
     policy statement on QFCs issued by the FDIC on December 12, 
     1989.
       Finally, the amendment permits the FDIC to transfer QFCs of 
     a failed depository institution to a bridge bank or a 
     depository institution organized by the FDIC for which a 
     conservator is appointed either (i) immediately upon the 
     organization of such institution or (ii) at the time of a 
     purchase and assumption transaction between the FDIC and the 
     institution. This provision clarifies that such institutions 
     are not to be considered financial institutions that are 
     ineligible to receive such transfers under FDIA section 
     11(e)(9). This is consistent with the existing policy 
     statement on QFCs issued by the FDIC on December 12, 1989.
     Section 904
       Section 904 limits the disaffirmance and repudiation 
     authority of the FDIC with respect to QFCs so that such 
     authority is consistent with the FDIC's transfer authority 
     under FDIA section 11(e)(9). This ensures that no 
     disaffirmance, repudiation or transfer authority of the FDIC 
     may be exercised to ``cherry-pick'' or otherwise treat 
     independently all the QFCs between a depository institution 
     in default and a person or any affiliate of such person. The 
     FDIC has announced that its policy is not to repudiate or 
     disaffirm QFCs selectively. This unified treatment is 
     fundamental to the reduction of systemic risk.
     Section 905
       Section 905 states that a master agreement for one or more 
     securities contracts, commodity contracts, forward contracts, 
     repurchase agreements or swap agreements will be treated as a 
     single QFC under the FDIA. This provision ensures that cross-
     product netting pursuant to a master agreement, or pursuant 
     to an umbrella agreement for separate master agreements 
     between the same parties, each of which is used to document 
     one or more qualified financial contracts, will be 
     enforceable under the FDIA. Cross-product meeting permits a 
     wide variety of financial transactions between two parties to 
     be netted, thereby maximizing the present and potential 
     future risk-reducing benefits of the netting arrangement 
     between the parties. Express recognition of the 
     enforceability of such cross-product master agreements 
     furthers the policy of increasing legal certainty and 
     reducing systemic risks in the case of an insolvency of a 
     large financial participant.
     Section 906
       Subsection (a)(1) amends the definition of ``clearing 
     organization'' to include clearing-houses that are subject to 
     exemptions pursuant to orders of the Securities and Exchange 
     Commission or the Commodity Futures Trading Commission and to 
     include multilateral clearing organizations (the definition 
     of which was added to FDICIA by the CFMA).
       Subsection (a)(2). FDICIA provides that a netting 
     arrangement will be enforced pursuant to its terms, 
     notwithstanding the failure of a party to the agreement. 
     However, the current netting provisions of FDICIA limit this 
     protection to ``financial institutions,'' which include 
     depository institutions. This subsection amends the FDICIA 
     definition of covered institutions to include (i) uninsured 
     national and State member banks, irrespective of their 
     eligibility for deposit insurance and (ii) foreign banks 
     (including the foreign bank and its branches or agencies as a 
     combined group, or only the foreign bank parent of a branch 
     or agency). The latter change will extend the protections of 
     FDICIA to ensure that U.S. financial organizations 
     participating in netting agreements with foreign banks are 
     covered by the Act, thereby enhancing the safety and 
     soundness of these arrangements. It is intended that a non-
     defaulting foreign bank and its branches and agencies be 
     considered to be a single financial institution for purposes 
     of the bilateral netting provisions of FDICIA (except to the 
     extent that the non-defaulting foreign bank and its branches 
     and agencies on the one hand, and the defaulting financial 
     institution, on the other, have entered into agreements that 
     clearly evidence an intention that the non-defaulting foreign 
     bank and its branches and agencies be treated as separate 
     financial institutions for purposes of the bilateral netting 
     provisions of FDICIA).
       Subsection (a)(3) amends FDICIA to provide that, for 
     purposes of FDICIA, two or more clearing organizations that 
     enter into a netting contract are considered ``members'' of 
     each other. This assures the enforceability of netting 
     arrangements involving two or more clearing organizations and 
     a member common to all such organizations, thus reducing 
     systemic risk in the event of the failure of such a member. 
     Under the current FDICIA provisions, the enforceability of 
     such arrangements depends on a case-by-case determination 
     that clearing organizations could be regarded as members of 
     each other for purposes of FDICIA.
       Subsection (a)(4) amends the FDICIA definition of netting 
     contract and the general rules applicable to netting 
     contracts. The current FDICIA provisions require that the 
     netting agreement must be governed by the law of the United 
     States or a State to receive the protections of FDICIA. 
     However, many of these agreements, particularly netting 
     arrangements covering positions taken in foreign exchange 
     dealings, are governed by the laws of a foreign country. This 
     subsection broadens the definition of ``netting contract'' to 
     include those agreements governed by foreign law, and 
     preserves the FDICIA requirement that a netting contract not 
     be invalid under, or precluded by, Federal law.
       Subsections (b) and (c) establish two exceptions to 
     FDICIA's protection of the enforceability of the provisions 
     of netting contracts between financial institutions and among 
     clearing organization members.
       First, the termination provisions of netting contracts will 
     not be enforceable based solely on (i) the appointment of a 
     conservator for an insolvent depository institution under the 
     FDIA or (ii) the appointment of a receiver for such 
     institution under the FDIA, if such receiver transfers or 
     repudiates QFCs in accordance with the FDIA and gives notice 
     of a transfer by 5:00 p.m. on the business day following the 
     appointment of a receiver. This change is made to confirm the 
     FDIC's flexibility to transfer or repudiate the QFCs of an 
     insolvent depository institution in accordance with the terms 
     of the FDIA. This modification also provides important legal 
     certainty regarding the treatment of QFCs under the FDIA, 
     because the current relationship between the FDIA and FDICIA 
     is unclear.
       The second exception provides that FDICIA does not override 
     a stay order under

[[Page 2615]]

     SIPA with respect to foreclosure on securities (but not cash) 
     collateral of a debtor (section 911 makes a conforming change 
     to SIPA). There is also an exception relating to insolvent 
     commodity brokers.
       Subsections (b) and (c) also clarify that a security 
     agreement or other credit enhancement related to a netting 
     contract is enforceable to the same extent as the underlying 
     netting contract.
       Subsection (d) adds a new section 407 to FDICIA. This new 
     section provides that, notwithstanding any other law, QFCs 
     with uninsured national banks or uninsured Federal branches 
     or agencies or uninsured State member banks or Edge Act 
     corporations that operate, or operate as, a multilateral 
     clearing organization and that are placed in receivership or 
     conservatorship will be treated in the same manner as if the 
     contract were with an insured national bank or insured 
     Federal branch for which a receiver or conservator was 
     appointed. This provision will ensure that parties to QFCs 
     with these institutions will have the same rights and 
     obligations as parties entering into the same agreements with 
     insured depository institutions. The new section specifically 
     limits the powers of a receiver or conservator for such an 
     institution to those contained in 12 U.S.C. 
     Sec. Sec. 1821(e)(8), (9), (10), and (11), which address 
     QFCs.
       While the amendment would apply the same rules to such 
     institutions that apply to insured institutions, the 
     provision would not change the rules that apply to insured 
     institutions. Nothing in this section would amend the 
     International Banking Act, the Federal Deposit Insurance Act, 
     the National Bank Act, or other statutory provisions with 
     respect to receiverships of insured national banks or Federal 
     branches.
     Section 907
       Subsection (a)(1) amends the Bankruptcy Code definitions of 
     ``repurchase agreement'' and ``swap agreement'' to conform 
     with the amendments to the FDIA contained in sections 901(e) 
     and 901(f) of the Act.
       In connection with the definition of ``repurchase 
     agreement,'' the term ``qualified foreign government 
     securities'' is defined to include securities that are direct 
     obligations of, or fully guaranteed by, central governments 
     of members of the Organization for Economic Cooperation and 
     Development (OECD). This language reflects developments in 
     the repurchase agreement markets, which increasingly use 
     foreign government securities as the underlying asset. The 
     securities are limited to those issued by or guaranteed by 
     full members of the OECD, as well as countries that have 
     concluded special lending arrangements with the International 
     Monetary Fund associated with the Fund's General Arrangements 
     to Borrow.
       Subsection (a)(1) also amends the definition of 
     ``repurchase agreement'' to include those on mortgage-related 
     securities, mortgage loans and interests therein, and 
     expressly to include principal and interest-only U.S. 
     government and agency securities as securities that can be 
     the subject of a ``repurchase agreement.'' The reference in 
     the definition to United States government- and agency-issued 
     or fully guaranteed securities is intended to include 
     obligations issued or guaranteed by Fannie Mae and the 
     Federal Home Loan Mortgage Corporation (Freddie Mac) as well 
     as all obligations eligible for purchase by Federal Reserve 
     banks under the similar language of section 14(b) of the 
     Federal Reserve Act.
       This amendment is not intended to affect the status of 
     repos involving securities or commodities as securities 
     contracts, commodity contracts, or forward contracts, and 
     their consequent eligibility for similar treatment under 
     other provisions of the Bankruptcy Code. In particular, an 
     agreement for the sale and repurchase of a security would 
     continue to be a securities contract as defined in the 
     Bankruptcy Code and thus also would be subject to the 
     Bankruptcy Code provisions pertaining to securities 
     contracts, even if not a ``repurchase agreement'' as defined 
     in the Bankruptcy Code. Similarly, an agreement for the sale 
     and repurchase of a commodity, even though not a ``repurchase 
     agreement'' as defined in the Bankruptcy Code, would continue 
     to be a forward contract for purposes of the Bankruptcy Code 
     and would be subject to the Bankruptcy Code provisions 
     pertaining to forward contracts.
       Subsection (a)(1) specifies that repurchase obligations 
     under a participation in a commercial mortgage loan do not 
     make the participation agreement a ``repurchase agreement.'' 
     Such repurchase obligations embedded in participations in 
     commercial loans (such as recourse obligations) do not 
     constitute a ``repurchase agreement.'' However, a repurchase 
     agreement involving the transfer of participations in 
     commercial mortgage loans with a simultaneous agreement to 
     repurchase the participation on demand or at a date certain 
     one year or less after such transfer would constitute a 
     ``repurchase agreement'' (as well as a ``securities 
     contract'').
       The definition of ``swap agreement'' is amended to include 
     an ``interest rate swap, option, future, or forward 
     agreement, including a rate floor, rate cap, rate collar, 
     cross-currency rate swap, and basis swap; a spot, same day-
     tomorrow, tomorrow-next, forward, or other foreign exchange 
     or precious metals agreement; a currency swap, option, 
     future, or forward agreement; an equity index or equity swap, 
     option, future, or forward agreement; a debt index or debt 
     swap, option, future, or forward agreement; a total return, 
     credit spread or credit swap, option, future, or forward 
     agreement; a commodity index or commodity swap, option, 
     future, or forward agreement; or a weather swap, weather 
     derivative, or weather option.'' As amended, the definition 
     of ``swap agreement'' will update the statutory definition 
     and achieve contractual netting across economically similar 
     transactions.
       The definition of ``swap agreement'' originally was 
     intended to provide sufficient flexibility to avoid the need 
     to amend the definition as the nature and uses of swap 
     transactions matured. To that end, the phrase ``or any other 
     similar agreement'' was included in the definition. (The 
     phrase ``or any similar agreement'' has been added to the 
     definitions of ``forward contract,'' ``commodity contract,'' 
     ``repurchase agreement,'' and ``securities contract'' for the 
     same reason.) To clarify this, subsection (a)(1) expands the 
     definition of ``swap agreement'' to include ``any agreement 
     or transactions that is similar to any other agreement or 
     transaction referred to in [subsection (a)(1)] and that has 
     been, is presently, or in the future becomes, the subject of 
     recurrent dealings in the swap markets and that is a forward, 
     swap, future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence or contingency associated with a financial, 
     commercial or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value.''
       The definition of ``swap agreement'' in this subsection 
     should not be interpreted to permit parties to document non-
     swaps as swap transactions. Traditional commercial 
     arrangements, such as supply agreements, or other non-
     financial market transactions, such as commercial, 
     residential or consumer loans, cannot be treated as ``swaps'' 
     under either the FDIA or the Bankruptcy Code because the 
     parties purport to document or label the transactions as 
     ``swap agreements.'' These definitions, and the 
     characterization of a certain transaction as a ``swap 
     agreement,'' are not intended to affect the characterization, 
     definition, or treatment of any instruments under any other 
     statute, regulation, or rule including, but not limited to, 
     the statutes, regulations or rules enumerated in subsection 
     (a)(1)(C). Similarly, the definitions of ``securities 
     contract,'' ``repurchase agreement,'' ``forward contract,'' 
     and ``commodity contract,'' and the characterization of 
     certain transactions as such a contract or agreement, are not 
     intended to affect the characterization, definition, or 
     treatment of any instruments under any other statute, 
     regulation, or rule including, but not limited to, the 
     statutes, regulations or rules enumerated in subsection (f).
       The definition also includes any security agreement or 
     arrangement, or other credit enhancement, related to a swap 
     agreement and any guarantee or reimbursement obligation 
     related to a swap agreement. This ensures that any such 
     agreement, arrangement or enhancement is itself deemed to be 
     a swap agreement, and therefore eligible for treatment as 
     such for purposes of termination, liquidation, acceleration, 
     offset and netting under the Bankruptcy Code and the FDIA. 
     Similar changes are made in the definitions of ``forward 
     contract,'' ``commodity contract,'' ``repurchase agreement,'' 
     and ``securities contract.'' An example of a security 
     arrangement is a right of setoff; examples of other credit 
     enhancements are letters of credit and other similar 
     agreements. A security agreement or arrangement or guarantee 
     or reimbursement obligation related to a ``swap agreement,'' 
     ``forward contract,'' ``commodity contract,'' ``repurchase 
     agreement'' or ``securities contract'' will be such an 
     agreement or contract only to the extent of the damages in 
     connection with such agreement measured in accordance with 
     Section 562 of the Bankruptcy Code (added by the Act). This 
     limitation does not affect, however, the other provisions of 
     the Bankruptcy Code (including Section 362(b)) relating to 
     security arrangements in connection with agreements or 
     contracts that otherwise qualify as ``swap agreements,'' 
     ``forward contracts,'' ``commodity contracts,'' ``repurchase 
     agreements'' or ``securities contracts.''
       The use of the term ``forward'' in the definition of ``swap 
     agreement'' is not intended to refer only to transactions 
     that fall within the definition of ``forward contract.'' 
     Instead, a ``forward'' transaction could be a ``swap 
     agreement'' even if not a ``forward contract.''
       Subsections (a)(2) and (a)(3) amend the Bankruptcy Code 
     definitions of ``securities contract'' and ``commodity 
     contract,'' respectively, to conform them to the definition 
     in the FDIA.
       Subsection (a)(2), like the amendments to the FDIA, amends 
     the definition of ``securities contract'' expressly to 
     encompass margin loans, to clarify the coverage of securities 
     options and to clarify the coverage of repurchase and reverse 
     repurchase transactions. The inclusion of ``margin loans'' in 
     the definition is intended to encompass only

[[Page 2616]]

     those loans commonly known in the securities industry as 
     ``margin loans,'' such as arrangements where a securities 
     broker or dealer extends credit to a customer in connection 
     with the purchase, sale or trading of securities, and does 
     not include loans that are not commonly referred to as 
     ``margin loans,'' however documented. The reference in 
     subsection (b) to a ``guarantee'' by or to a ``securities 
     clearing agency'' is intended to cover other arrangements, 
     such as novation, that have an effect similar to a guarantee. 
     The reference to a ``loan'' of a security in the definition 
     is intended to apply to loans of securities, whether or not 
     for a ``permitted purpose'' under margin regulations. The 
     reference to ``repurchase and reverse repurchase 
     transactions'' is intended to eliminate any inquiry under 
     Section 555 and related provisions as to whether a repurchase 
     or reverse repurchase transaction is a purchase and sale 
     transaction or a secured financing. Repurchase and reverse 
     repurchase transactions meeting certain criteria are already 
     covered under the definition of ``repurchase agreement'' in 
     the Bankruptcy Code. Repurchase and reverse repurchase 
     transactions on all securities (including, for example, 
     equity securities, asset-backed securities, corporate bonds 
     and commercial paper) are included under the definition of 
     ``securities contract''. A repurchase or reverse repurchase 
     transaction which is a ``securities contract'' but not a 
     ``repurchase agreement'' would thus be subject to the 
     ``counterparty limitations'' contained in Section 555 of the 
     Bankruptcy Code (i.e., only stockbrokers, financial 
     institutions, securities clearing agencies and financial 
     participants can avail themselves of Section 555 and related 
     provisions).
       Subsection (a)(2) also specifies that purchase, sale and 
     repurchase obligations under a participation in a commercial 
     mortgage loan do not constitute ``securities contracts.'' 
     While a contract for the purchase, sale or repurchase of a 
     participation may constitute a ``securities contract,'' the 
     purchase, sale or repurchase obligation embedded in a 
     participation agreement does not make that agreement a 
     ``securities contract.''
       Subsection (b) amends the Bankruptcy Code definitions of 
     ``financial institution'' and ``forward contract merchant.'' 
     The definition for ``financial institution'' includes Federal 
     Reserve Banks and the receivers or conservators of insolvent 
     depository institutions. With respect to securities 
     contracts, the definition of ``financial institution'' 
     expressly includes investment companies registered under the 
     Investment Company Act of 1940.
       Subsection (b) also adds a new definition of ``financial 
     participant'' to limit the potential impact of insolvencies 
     upon other major market participants. This definition will 
     allow such market participants to close-out and net 
     agreements with insolvent entities under sections 362(b)(6), 
     555, and 556 even if the creditor could not qualify as, for 
     example, a commodity broker. Sections 326(b)(6), 555 and 556 
     preserve the limitations of the right to close-out and net 
     such contracts, in most cases, to entities who qualify under 
     the Bankruptcy Code's counterparty limitations. However, 
     where the counterparty has transactions with a total gross 
     dollar value of at least $1 billion in notional or actual 
     principal amount outstanding on any day during the previous 
     15-month period, or has gross mark-to-market positions of at 
     least $100 million (aggregated across counterparties) in one 
     or more agreements or transactions on any day during the 
     previous 15-month period, sections 362(b)(6), 555 and 556 and 
     corresponding amendments would permit it to exercise netting 
     and related rights irrespective of its inability otherwise to 
     satisfy those counterparty limitations. This change will help 
     prevent systemic impact upon the markets from a single 
     failure, and is derived from threshold tests contained in 
     Regulation EE promulgated by the Federal Reserve Board in 
     implementing the netting provisions of the Federal Deposit 
     Insurance Corporation Improvement Act. It is intended that 
     the 15-month period be measured with reference to the 15 
     months preceding the filing of a petition by or against the 
     debtor.
       ``Financial participant'' is also defined to include 
     ``clearing organizations'' within the meaning of FDICIA (as 
     amended by the CFMA and Section 906 of the Act). This 
     amendment, together with the inclusion of ``financial 
     participants'' as eligible counterparties in connection with 
     ``commodity contracts,'' ``forward contracts'' and 
     ``securities contracts'' and the amendments made in other 
     Sections of the Act to include ``financial participants'' as 
     counterparties eligible for the protections in respect of 
     ``swap agreements'' and ``repurchase agreements'', take into 
     account the CFMA and will allow clearing organizations to 
     benefit from the protections of all of the provisions of the 
     Bankruptcy Code relating to these contracts and agreements. 
     This will further the goal of promoting the clearing of 
     derivatives and other transactions as a way to reduce 
     systemic risk. The definition of ``financial participant'' 
     (as with the other provisions of the Bankruptcy Code relating 
     to ``securities contracts,'' ``forward contracts,'' 
     ``commodity contracts,'' ``repurchase agreements'' and ``swap 
     agreements'') is not mutually exclusive, i.e., an entity that 
     qualifies as a ``financial participant'' could also be a 
     ``swap participant,'' ``repo participant,'' ``forward 
     contract merchant,'' ``commodity broker,'' ``stockbroker,'' 
     ``securities clearing agency'' and/or ``financial 
     institution.''
       Subsection (c) adds to the Bankruptcy Code new definitions 
     for the terms ``master netting agreement'' and ``master 
     netting agreement participant.''
       The definition of ``master netting agreement'' is designed 
     to protect the termination and close-out netting provisions 
     of cross-product master agreements between parties. Such an 
     agreement may be used (i) to document a wide variety of 
     securities contracts, commodity contracts, forward contracts, 
     repurchase agreements and swap agreements or (ii) as an 
     umbrella agreement for separate master agreements between the 
     same parties, each of which is used to document a discrete 
     type of transaction. The definition includes security 
     agreements or arrangements or other credit enhancements 
     related to one or more such agreements and clarifies that a 
     master netting agreement will be treated as such even if it 
     documents transactions that are not within the enumerated 
     categories of qualifying transactions (but the provisions of 
     the Bankruptcy Code relating to master netting agreements and 
     the other categories of transactions will not apply to such 
     other transactions).
       A ``master netting agreement participant'' is any entity 
     that is a party to an outstanding master netting agreement 
     with a debtor before the filing of a bankruptcy petition.
       Subsection (d) amends section 362(b) of the Bankruptcy Code 
     to protect enforcement, free from the automatic stay, of 
     setoff or netting provisions in swap agreements and in master 
     netting agreements and security agreements or arrangements 
     related to one or more swap agreements or master netting 
     agreements. This provision parallels the other provisions of 
     the Bankruptcy Code that protect netting provisions of 
     securities contracts, commodity contracts, forward contracts, 
     and repurchase agreements. Because the relevant definitions 
     include related security agreements, the references to 
     ``setoff'' in these provisions, as well as in section 
     362(b)(6) and (7) of the Bankruptcy Code, are intended to 
     refer also to rights to foreclose on, and to set off against-
     obligations to return, collateral securing swap agreements, 
     master netting agreements, repurchase agreements, securities 
     contracts, commodity contracts, or forward contracts. 
     Collateral may be pledged to cover the cost of replacing the 
     defaulted transactions in the relevant market, as well as 
     other costs and expenses incurred or estimated to be incurred 
     for the purpose of hedging or reducing the risks arising out 
     of such termination. Enforcement of these agreements and 
     arrangements is consistent with the policy goal of minimizing 
     systemic risk.
       Subsection (d) also clarifies that the provisions 
     protecting setoff and foreclosure in relation to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, and master netting agreements 
     free from the automatic stay apply to collateral pledged by 
     the debtor but that cannot technically be ``held by'' the 
     creditor, such as receivables and book-entry securities, and 
     to collateral that has been repledged by the creditor and 
     securities re-sold pursuant to repurchase agreements.
       The current codification of section 546 of the Bankruptcy 
     Code contains two subsections designated as ``(g)'; 
     subsection (e) corrects this error.
       Subsections (e) and (f) amend sections 546 and 548(d) of 
     the Bankruptcy Code to provide that transfers made under or 
     in connection with a master netting agreement may not be 
     avoided by a trustee except where such transfer is made with 
     actual intent to hinder, delay or defraud and not taken in 
     good faith. This amendment provides the same protections for 
     a transfer made under, or in connection with, a master 
     netting agreement as currently is provided for margin 
     payments, settlement payments and other transfers received by 
     commodity brokers, forward contract merchants, stockbrokers, 
     financial institutions, securities clearing agencies, repo 
     participants, and swap participants under Sections 546 and 
     548(d), except to the extent the trustee could otherwise 
     avoid such a transfer made under an individual contract 
     covered by such master netting agreement.
       Subsections (g), (h), (i) and (j) clarify that the 
     provisions of the Bankruptcy Code that protect (i) rights of 
     liquidation under securities contracts, commodity contracts, 
     forward contracts and repurchase agreements also protect 
     rights of termination or acceleration under such contracts, 
     and (ii) rights to terminate under swap agreements also 
     protect rights of liquidation and acceleration.
       Subsection (k) adds a new section 561 to the Bankruptcy 
     Code to protect the contractual right of a master netting 
     agreement participant to enforce any rights of termination, 
     liquidation, acceleration, offset or netting under a master 
     netting agreement. Such rights include rights arising (i) 
     from the rules of a derivatives clearing organization, 
     multilateral clearing organization, securities exchange, 
     securities association, contract market, derivatives 
     transaction

[[Page 2617]]

     execution facility or board of trade, (ii) under common law, 
     law merchant or (iii) by reason of normal business practice. 
     This reflects the enactment of the CFMA and the current 
     treatment of rights under swap agreements under section 560 
     of the Bankruptcy Code. Similar changes to reflect the 
     enactment of the CFMA have been made to the definition of 
     ``contractual right'' for purposes of Sections 555, 556, 559 
     and 560 of the Bankruptcy Code.
       Subsections (b)(2)(A) and (b)(2)(B) of new Section 561 
     limit the exercise of contractual rights to net or to offset 
     obligations where the debtor is a commodity broker and one 
     leg of the obligations sought to be netted relates to 
     commodity contracts traded on or subject to the rules of a 
     contract market designated under the Commodity Exchange Act 
     or a derivatives transaction execution facility registered 
     under the Commodity Exchange Act. Under subsection (b)(2)(A) 
     netting or offsetting is not permitted in these circumstances 
     if the party seeking to net or to offset has no positive net 
     equity in the commodity accounts at the debtor. Subsection 
     (b)(2)(B) applies only if the debtor is a commodity broker, 
     acting on behalf of its own customer, and is in turn a 
     customer of another commodity broker. In that case, the 
     latter commodity broker may not net or offset obligations 
     under such commodity contracts with other claims against its 
     customer, the debtor. Subsections (b)(2)(A) and (b)(2)(B) 
     limit the depletion of assets available for distribution to 
     customers of commodity brokers. This is consistent with the 
     principle of subchapter IV of chapter 7 of title 11 that 
     gives priority to customer claims in the bankruptcy of a 
     commodity broker. Subsection (b)(2)(C) provides an exception 
     to subsections (b)(2)(A) and (b)(2)(B) for cross-margining 
     and other similar arrangements approved by, or submitted to 
     and not rendered ineffective by, the Commodity Futures 
     Trading Commission, as well as certain other netting 
     arrangements.
       For the purposes of Bankruptcy Code sections 555, 556, 559, 
     560 and 561, it is intended that the normal business practice 
     in the event of a default of a party based on bankruptcy or 
     insolvency is to terminate, liquidate or accelerate 
     securities contracts, commodity contracts, forward contracts, 
     repurchase contracts, repurchase agreements, swap agreements 
     and master netting agreements with the bankrupt or insolvent 
     party.
       The protection of netting and offset rights in sections 560 
     and 561 is in addition to the protections afforded in 
     sections 362(b)(6), (b)(7), (b)(17) and (b)(28).
       Under the Act, the termination, liquidation or acceleration 
     rights of a master netting agreement participant are subject 
     to limitations contained in other provisions of the 
     Bankruptcy Code relating to securities contracts and 
     repurchase agreements. In particular, if a securities 
     contract or repurchase agreement is documented under a master 
     netting agreement, a party's termination, liquidation and 
     acceleration rights would be subject to the provisions of the 
     Bankruptcy Code relating to orders authorized under the 
     provisions of SIPA or any statute administered by the SEC. In 
     addition, the netting rights of a party to a master netting 
     agreement would be subject to any contractual terms between 
     the parties limiting or waiving netting or set off rights. 
     Similarly, a waiver by a bank or a counterparty of netting or 
     set off rights in connection with QFCs would be enforceable 
     under the FDIA.
       Section 502 of the Act clarifies that, with respect to 
     municipal bankruptcies, all the provisions of the Bankruptcy 
     Code relating to securities contracts, commodity contracts, 
     forward contracts, repurchase agreements, swap agreements and 
     master netting agreements (which by their terms are intended 
     to apply in all proceedings under title 11) will apply in a 
     Chapter 9 proceeding for a municipality. Although sections 
     555, 556, 559 and 560 provide that they apply in any 
     proceeding under the Bankruptcy Code, Section 502 makes a 
     technical amendment in Chapter 9 to clarify the applicability 
     of these provisions.
       New Section 561 of the Bankruptcy Code clarifies that the 
     provisions of the Bankruptcy Code related to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements and master netting agreements 
     apply in a proceeding ancillary to a foreign insolvency 
     proceeding under new Chapter 15.
       Subsections (l) and (m) clarify that the exercise of 
     termination and netting rights will not otherwise affect the 
     priority of the creditor's claim after the exercise of 
     netting, foreclosure and related rights.
       Subsection (n) amends section 553 of the Bankruptcy Code to 
     clarify that the acquisition by a creditor of setoff rights 
     in connection with swap agreements, repurchase agreements, 
     securities contracts, forward contracts, commodity contracts 
     and master netting agreements cannot be avoided as a 
     preference.
       This subsection also adds setoff of the kinds described in 
     sections 555, 556, 559, 560, and 561 of the Bankruptcy Code 
     to the types of setoff excepted from section 553(b).
       Subsection (o), as well as other subsections of the Act, 
     adds references to ``financial participant'' in all the 
     provisions of the Bankruptcy Code relating to securities, 
     forward and commodity contracts and repurchase and swap 
     agreements.
     Section 908
       Section 908 amends section 11(e)(8) of the Federal Deposit 
     Insurance Act to explicitly authorize the FDIC, in 
     consultation with appropriate Federal banking agencies, to 
     prescribe regulations on recordkeeping with respect to QFCs. 
     Adequate recordkeeping for such transactions is essential to 
     effective risk management and to the reduction of systemic 
     risk permitted by the orderly resolution of depository 
     institutions utilizing QFCs.
     Section 909
       Section 909 amends FDIA section 13(e)(2) to provide that an 
     agreement for the collateralization of governmental deposits, 
     bankruptcy estate funds, Federal Reserve Bank or Federal Home 
     Loan Bank extensions of credit or one or more QFCs shall not 
     be deemed invalid solely because such agreement was not 
     entered into contemporaneously with the acquisition of the 
     collateral or because of pledges, delivery or substitution of 
     the collateral made in accordance with such agreement.
       The amendment codifies portions of policy statements issued 
     by the FDIC regarding the application of section 13(e), which 
     codifies the ``D'Oench Duhme'' doctrine. With respect to 
     QFCs, this codification recognizes that QFCs often are 
     subject to collateral and other security arrangements that 
     may require posting and return of collateral on an ongoing 
     basis based on the mark-to-market values of the 
     collateralized transactions. The codification of only 
     portions of the exiting FDIC policy statements on these and 
     related issues should not give rise to any negative 
     implication regarding the continued validity of these policy 
     statements.
     Section 910
       Section 910 adds a new section 562 to the Bankruptcy Code 
     providing that damages under any swap agreement, securities 
     contract, forward contract, commodity contract, repurchase 
     agreement or master netting agreement will be calculated as 
     of the earlier of (i) the date of rejection of such agreement 
     by a trustee or (ii) the date of liquidation, termination or 
     acceleration of such contract or agreement.
       New section 562 provides important legal certainty and 
     makes the Bankruptcy Code consistent with the current 
     provisions related to the timing of the calculation of 
     damages under QFCs in the FDIA.
     Section 911
       Section 911 amends SIPA to provide that an order or decree 
     issued pursuant to SIPA shall not operate as a stay of any 
     right of liquiation, termination, acceleration, offset or 
     netting under one or more securities contracts, commodity 
     contracts, forward contracts, repurchase agreements, swap 
     agreements or master netting agreements (as defined in the 
     Bankruptcy Code and including rights of foreclosure on 
     collateral), except that such order or decree may stay any 
     right to foreclose on or dispose of securities (but not cash) 
     collateral pledged by the debtor or sold by the debtor under 
     a repurchase agreement or lent by the debtor under a 
     securities lending agreement. (A corresponding amendment to 
     FDICIA is made by section 906). A creditor that was stayed in 
     exercising rights against such securities would be entitled 
     to post-insolvency interest to the extent of the value of 
     such securities.
     Section 912
       Section 912 generally protects asset-backed securitization 
     transactions from legal uncertainties and disruptions related 
     to the bankruptcies of certain parties and allows for the 
     further development of structured finance. Asset 
     securitization involves the issuance of securities supported 
     by assets having an ascertainable cash flow or market value. 
     Securitization of receivables, such as small-business loans, 
     commercial and multifamily mortgages, and car loans, allows 
     for the funding of such loans from capital market sources. 
     The process generally enlarges the pool of capital available 
     and reduces financing costs for vital lending purposes such 
     as the financing of small-business operations and home 
     ownership.
       Through a number of definitions designed to ensure that the 
     exclusion from property of the estate applies only to the 
     intended type of transaction, new section 541(b)(5) of the 
     Bankruptcy Code excludes from the property of a debtor's 
     estate any ``eligible asset'' (and 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.'' Each term is explicitly defined to reflect 
     its specific role or application in the securitization 
     process to ensure that only bona fide securitizations are 
     eligible for the safe harbor exclusion. All defined elements 
     of a securitization must be present for the safe harbor to 
     apply. Other commercial transactions lacking any of the 
     defined elements, such as transactions documented and 
     structured as collateralized lending arrangements and other 
     commercial asset sales or financings that are unrelated to 
     securitization transactions, would be ineligible for the safe 
     harbor provided by section 541(b)(5).
       The phrase ``to the extent'' in new section 541(b)(5) makes 
     clear that a portion of the eligible asset may remain part of 
     the debtor's

[[Page 2618]]

     estate, for example, where the eligible entity obtains the 
     right to receive only interest payments on the first 10 
     percent of payments due on a receivable in connection with an 
     asset-backed securitization. In addition, the reference to 
     section 548(a) in new section 541(b)(5) will make clear that 
     the safe harbor does not supersede a trustee's power to avoid 
     fraudulent transfers.
       New section 541(b)(5) is not intended to override state law 
     requirements, if any, regarding ``perfection'' of an asset 
     sale. However, regardless of strict compliance with such 
     state law requirements, new section 541(b)(5) is intended to 
     provide an exclusion of the debtor's interest in eligible 
     assets (and proceeds thereof) from the debtor's estate, upon 
     compliance with section 541(b)(5). Thus, despite an eligible 
     entity's failure to have properly perfected a sale for state 
     law purposes, the eligible assets in question would remain 
     excluded from the debtor's estate. In such event, however, a 
     third party creditor with an interest in such eligible assets 
     under state law would not be precluded from asserting, 
     outside of the bankruptcy proceedings, such interest against 
     the issuer or any other party purporting to have an interest 
     in those assets. In other words, the amendments do not 
     purport to extinguish any party's interest in the securitized 
     assets other than the debtor's interest to the extent 
     transferred by the debtor to the securitization vehicle. In 
     order to provide certainty to participants in the asset-
     backed securities market (including both issuers and 
     purchasers of such securities), it is noted that the 
     ``strong-arm'' provisions of section 544 of the Bankruptcy 
     Code are not intended to override the general rule set forth 
     in new section 541(b)(5) so as to bring such assets back into 
     the debtor's estate.
       Frequently, asset securitizations involve the issuance of 
     more than one class of securities with differing payment 
     priorities subordination provisions and other 
     characteristics. The definition of ``asset-backed 
     securitization'' contained in new section 541(e)(1) requires 
     that at least one tranche of the asset-backed securities 
     backed by the eligible assets in question be rated investment 
     grade, thereby requiring that each asset-backed 
     securitization as to which eligible assets are excluded from 
     the debtor's estate be a carefully reviewed transaction 
     subjected to third party scrutiny by a nationally recognized 
     statistical rating organization. The investment-grade rating 
     requirement applies only when the security is initially 
     issued. In view of the cost and time associated with 
     obtaining an investment-grade rating such ratings are 
     generally not pursued for smaller transactions. These and 
     other burdens of the rating process add further protection 
     against potential abuse of the safe harbor for sham 
     transactions and ensure its application for its intended 
     purpose--to preserve payments on asset-backed securities 
     issued in the public and private markets.
       New section 541(e)(2) defines the term ``eligible asset.'' 
     This definition is based upon the definition provided in rule 
     3a-7 under the Investment Company Act of 1940, which provides 
     an exemption from registration under the Investment Company 
     Act for issuers of asset-backed securities (i.e., issuers in 
     the business of purchasing, or otherwise acquiring, and 
     holding eligible assets). The phrase ``or other assets'' is 
     intended to cover assets often conveyed in connection with 
     securitization transactions such as letters of credit, 
     guarantees, cash collateral accounts, and other assets that 
     are provided as additional credit support. This phrase would 
     also cover other assets, such as swaps, hedge agreements, 
     etc., that are provided to protect bondholders against 
     interest rate, currency and other market risks. The inclusion 
     of cash and securities as eligible assets allows so-called 
     market-value based securitizations of equity and other non-
     amortizing securities to fall within the purview of the 
     amendment, although securitizations of such securities are 
     not included under Rule 3a-7 and therefore would be subject 
     to regulation under the Investment Company Act if another 
     exemption therefrom were not available.
       New sections 541(e)(3) and (4) define the terms ``eligible 
     entity'' and ``issuer,'' respectively. The definitions 
     exclude operating companies by encompassing only single 
     purpose entities. Because securitization transactions often 
     involve intermediary transferees, an eligible entity can be 
     either an issuer or an entity engaged exclusively in the 
     business of acquiring and transferring eligible assets 
     directly or indirectly to an issuer.
       New section 541(e)(5) defines the term ``transferred.'' In 
     order for the eligible assets to be excluded from the 
     debtor's estate under section 541, the debtor must represent 
     and warrant in a written agreement that such eligible assets 
     were sold, contributed or otherwise conveyed with the 
     intention of removing them from the debtor's estate pursuant 
     to section 541 (whether or not reference is made to section 
     541 in the written agreement). The definition makes clear 
     that the debtor's written intention as to the exclusion of 
     the eligible assets will be honored, regardless of the state 
     law characterization of the transfer as a sale, contribution 
     or other conveyance, and regardless of any other aspect of 
     the transaction (such as the debtor's holding an interest in 
     the issuer or any securities issued by the issuer, the 
     ongoing servicing obligation of the debtor; the tax and 
     accounting characterization; or any recourse to the debtor, 
     whether relating to a breach of a representation, warranty or 
     covenant, or otherwise) which may affect a state law analysis 
     as to the true sale.
     Section 913
       Subsection (a) provides that the amendments made under 
     Title IX take effect on the date of enactment.
       Subsection (b) provides that the amendments made under 
     Title IX shall not apply with respect to cases commenced, or 
     to conservator/receiver appointments made, before the date of 
     enactment.

  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN pro tempore. Does any Member claim the time in 
opposition?
  Ms. JACKSON-LEE of Texas. I claim the time in opposition, Mr. 
Chairman.
  The CHAIRMAN pro tempore. The gentlewoman from Texas (Ms. Jackson-
Lee) is recognized for 5 minutes.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield such time as he may 
consume to the gentleman from New York (Mr. LaFalce), ranking member of 
the Committee on Financial Services.
  Mr. LaFALCE. Mr. Chairman, I thank the gentlewoman for yielding time 
to me.
  Mr. Chairman, I have difficulties with the bankruptcy bill and 
believe that it needs significant improvements in the amendatory 
process; amendments that we, unfortunately, for the most part will not 
be able to offer.
  However, there are some technical matters in the bill within the 
jurisdiction of the Committee on Financial Services which require 
adjustments, and one of which has been allowed as an amendment by the 
gentleman from Ohio (Mr. Oxley) and myself.
  That title is solely concerned with changes to the current system for 
quickly netting the obligations of financial institutions in bankruptcy 
or receivership situations in order to prevent destabilizing 
disruptions in our clearing and settlement systems.
  The provision now in the bill has passed the House repeatedly and 
without objection in the last Congress. The adjustments that the 
gentleman from Ohio (Mr. Oxley) and I offer are largely technical and 
are necessitated by enactment of the Commodities Exchange Modernization 
Act during the last Congress.
  Our amendment also includes some minor substantive changes which have 
been rendered advisable due to transitions in market structure since 
the President's Working Group on Financial Markets recommended the 
original text of Title IX in 1998.
  The Justice Department and all regulatory departments and agencies 
which might be affected by these changes have been consulted, in 
detail, and offer no objections. These regulators include the 
Department of the Treasury, Federal Reserve, Securities and Exchange 
Commission, Federal Deposit Insurance Corporation, and the Commodities 
Futures Trading Commission. This group essentially mirrors the 
President's Working Group on Financial Markets as it was constituted in 
1998.
  Title IX contains provisions which are of central importance to the 
stability of our financial system. Their potential importance is 
magnified in a time of possible economic downturn. There is no 
opposition to these changes. Indeed, there is broad support. They could 
have, and should have, passed the House and Senate and been enacted 
into law last Congress. Unfortunately, they became unnecessarily caught 
up in the far more contentious bankruptcy debate.
  If H.R. 333 again becomes caught up in a long and contentious debate, 
I will urge that Title IX be quickly pursued as an independent measure. 
If there were a major problem with the machinery of the securities 
system, the country would be hard pressed to resolve it expeditiously 
and easily without the enactment of these netting provisions. 
Instability and delay in such a circumstance could prove a recipe for 
major economic trouble. Our financial system has undergone such 
fundamental change that existing legal structures are woefully 
inadequate for handling an emergency-- particularly if they involve new 
instruments for managing risk and transferring value, such as swaps.
  The updating amendments Mr. Oxley and I are proposing ensure that 
Title IX will be better tailored for the present and well-integrated 
with the Commodities Exchange Modernization Act of 2000. They will also 
establish a

[[Page 2619]]

ready template for translating Title IX into an independent bill should 
that become necessary.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield back the balance of 
my time.
  Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, let me thank again the chairman of the Committee on the 
Judiciary, the gentleman from Wisconsin (Mr. Sensenbrenner), for his 
leadership on this issue, as well as my colleague, the gentleman from 
New York (Mr. LaFalce), and the ranking member of the Committee.
  Mr. Chairman, I am pleased to yield such time as he may consume to 
the gentleman from Alabama (Mr. Bachus).
  Mr. BACHUS. Mr. Chairman, I rise in support of the amendment offered 
by the distinguished chairman and by his colleague, the ranking member, 
the gentleman from New York (Mr. LaFalce).
  Among other things, the amendment modifies the bill's so-called 
netting provisions to conform them to important changes made to Federal 
law in the Commodities Futures Modernization Act which was signed into 
law December 21, 2000.
  I might point out to my colleagues that the provisions in this 
amendment were passed by this House in a bipartisan overwhelming vote 
last year, but they never made it into law. What they do is promote an 
orderly unwinding of financial contracts in those instances in which 
one party to a derivative contract becomes insolvent and those 
contracts go into a bankruptcy proceeding. This avoids that 
possibility.
  We all found out from the long-term capital management situation, and 
that was 1998, a major hedge fund, what a situation that was. We want 
to avoid that in the future, tying these contracts up in a long 
bankruptcy proceeding.
  The Commodity Futures Modernization Act made a number of important 
changes to the regulation of over-the-counter derivatives. The law 
expressly excluded certain derivative contracts from the Commodities 
Exchange Act, and allowed for the formation of new clearing entities. 
The amendment before the House now would update the ``financial 
contracts'' definition and the netting provisions to reflect new market 
developments in the swaps industry and the changes made in the 
Commodity Futures Modernization Act.
  Let me again commend the chairman and the ranking member for bringing 
this important amendment to the floor today, and I urge my colleagues 
to support its adoption. If we do not do it, the next time we have a 
major financial player threatened with insolvency we will find 
ourselves needing to pass this, and we might as well get ahead of the 
game.
  Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I again thank the chairman of the Subcommittee on 
Financial Institutions of the Committee on Financial Services for his 
good work in this area.
  Mr. Chairman, in summary, there were some other changes that the 
President's working group had requested that are not contained in this 
amendment, but we will hopefully reserve the right to seek those 
changes in conference, working very closely with all of the major 
players in this historic legislation.
  Mr. OXLEY. Mr. Speaker, I yield back the balance of my time.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentleman from Ohio (Mr. Oxley).
  The amendment was agreed to.
  The CHAIRMAN pro tempore. It is now in order to consider amendment 
No. 6 printed in House Report 107-4.


          Amendment No. 6 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

  Amendment No. 6 offered by Ms. Jackson-Lee of Texas:
       Page 8, after line 11, insert the following (and make such 
     technical and conforming changes as may be appropriate):

       (III) by striking ``whose debts are primarily consumer 
     debts'';

       Page 10, line 7, strike ``the continuation of''.
       Page 10, after line 22, insert the following (and make such 
     technical and conforming changes as may be appropriate):
       ``(II) In addition, if the debtor does have health 
     insurance benefits the debtor's monthly expenses shall 
     include an allowance to pay for reasonable medical expenses, 
     as circumstances require, not covered by the insurance for 
     the debtor, the dependents of the debtor, and the spouse of 
     the debtor.
       Page 10, beginning on line 24, strike ``actual 
     administrative expenses'' and insert ``reasonable expense''.
       Page 11, line 1, insert ``or public'' after ``private''.
       Page 11, after line 4, insert the following:
       ``(V) In addition, the debtor's monthly expenses shall 
     include expenses necessary for the care of foster children in 
     the custody of the debtor.
       Page 11, beginning on line 1, strike ``if'' and all that 
     follows through ``why'' on line 3.
       Page 12, strike lines 2 through 6, and insert the 
     following:
       ``(B)(i) In any proceeding brought under this subsection, 
     the presumption of abuse may be overcome if the court finds 
     special circumstances indicating by a preponderance of the 
     evidence that the debtor's income should be adjusted to less 
     than the current monthly income, that the debtor's reasonably 
     necessary expenses are greater than those allowed by the 
     Internal Revenue Service guidelines, or that the debtor's 
     financial difficulties were caused by circumstances beyond 
     the debtor's control including medical problems.
       Page 13, after line 3, insert the following:
       ``(v) A debtor whose current monthly income is equal to or 
     less than the Federal Income Poverty Guidelines and has been 
     for the 1-year period preceding the date of the filing of the 
     petition may, in lieu of the requirements of clauses (iv) and 
     (v) of section 521(a)(1)(B) and subsections (e), (f), and (g) 
     of section 521, file with the court written evidence showing 
     the debtor's income for the 1-year period before the date of 
     the filing of the petition and a declaration under penalty of 
     perjury that the debtor's income meets the test of this 
     clause for that period.
       Page 24, line 2, strike ``current monthly income'' and 
     insert ``projected disposable income''.
       Page 17, lines 6, 11, and 16, insert ``(adjusted to reflect 
     the percentage change in the Consumer Price Index for All 
     Urban Consumers, published by the Department of Labor, for 
     each subsequent year during which such median family income 
     is not reported by the Bureau of the Census)'' after 
     ``Census''.
       Page 18, lines 2, 7, and 12, insert ``(adjusted to reflect 
     the percentage change in the Consumer Price Index for All 
     Urban Consumers, published by the Department of Labor, for 
     each subsequent year during which such median family income 
     is not reported by the Bureau of the Census)'' after 
     ``Census''.
       Page 20, lines 18 and 23, insert ``(adjusted to reflect the 
     percentage change in the Consumer Price Index for All Urban 
     Consumers, published by the Department of Labor, for each 
     subsequent year during which such median family income is not 
     reported by the Bureau of the Census)'' after ``Census''.
       Page 21, lines 9 and 14, insert ``(adjusted to reflect the 
     percentage change in the Consumer Price Index for All Urban 
     Consumers, published by the Department of Labor, for each 
     subsequent year during which such median family income is not 
     reported by the Bureau of the Census)'' after ``Census''.
       Page 25, lines 9, 14, and 19, insert ``(adjusted to reflect 
     the percentage change in the Consumer Price Index for All 
     Urban Consumers, published by the Department of Labor, for 
     each subsequent year during which such median family income 
     is not reported by the Bureau of the Census)'' after 
     ``Census''.
       Page 160, lines 14, 19, and 24, insert ``(adjusted to 
     reflect the percentage change in the Consumer Price Index for 
     All Urban Consumers, published by the Department of Labor, 
     for each subsequent year during which such median family 
     income is not reported by the Bureau of the Census)'' after 
     ``Census''.
       Page 161, lines 9, 14, and 19, insert ``(adjusted to 
     reflect the percentage change in the Consumer Price Index for 
     All Urban Consumers, published by the Department of Labor, 
     for each subsequent year during which such median family 
     income is not reported by the Bureau of the Census)'' after 
     ``Census''.
       Page 162, lines 17 and 23, insert ``(adjusted to reflect 
     the percentage change in the Consumer Price Index for All 
     Urban Consumers, published by the Department of Labor, for 
     each subsequent year during which such median family income 
     is not reported by the Bureau of the Census)'' after 
     ``Census''.
       Page 163, line 4, insert ``(adjusted to reflect the 
     percentage change in the Consumer Price Index for All Urban 
     Consumers, published by the Department of Labor, for each 
     subsequent year during which such median family income is not 
     reported by the Bureau of the Census)'' after ``Census''.

[[Page 2620]]

       Beginning on page 45, strike line 24 and all that follows 
     through line 9 on page 61, and insert the following:
       (1) in subsection (c)(2)--
       (A) in subparagraph (A) by striking ``and'' at the end;
       (B) in subparagraph (B) by adding ``and'' at the end; and
       (C) by adding at the end the following:
       ``(C) such agreement contains a clear and conspicuous 
     statement which advises the debtor what portion of the debt 
     to be reaffirmed is attributable to principal, interest, late 
     fees, creditors attorney fees, expenses or other costs 
     relating to the collection of the debt;'';
       (2) in subsection (c)(6)(B), by inserting ``or is a debt 
     described in subsection (c)(7)'' after ``real property''; and
       (3) in subsection (c)--
       (A) in paragraph (5) by striking ``and'' at the end;
       (B) in paragraph (6) by striking the period and inserting 
     ``; and'' at the end; and
       (C) by adding at the end the following:
       ``(7) in a case concerning an individual, if the 
     consideration for such agreement is based in whole or in part 
     on an unsecured consumer debt, or is based in whole or in 
     part upon a debt for an item of personalty the value of which 
     at point of purchase was $1,000 or less, and in which the 
     creditor asserts a purchase money interest, the court, 
     approves such agreement as--
       ``(A) in the best interest of the debtor in light of the 
     debtor's income and expenses;
       ``(B) not imposing an undue hardship on the debtor's future 
     ability to pay for the needs of children and other dependents 
     (including court ordered support);
       ``(C) not requiring the debtor to pay the creditors 
     attorneys fees, expenses or other costs relating to the 
     collection of debt;
       ``(D) not entered into to protect property that is 
     necessary for the care and maintenance of children or other 
     dependents that would have nominal value on repossession;
       ``(E) not entered into after coercive threats or actions by 
     the creditor in the creditors course of dealings with the 
     debtor; and
       ``(F) not unfair because excessive in amount based upon the 
     value of the collateral.'';
       (4) in subsection (d)(2)--
       (A) by striking ``subsection (c)(6)'' and inserting 
     ``paragraphs (6) and (7) of subsection (c)'', and
       (B) by striking ``, if the consideration for such agreement 
     is based in whole or in part on a consumer debt that is not 
     secured by real property of the debtor after of this section 
     and adding at the end as applicable''.
       Page 86, strike lines 1 through 5 (and make such technical 
     and conforming changes as may be appropriate).
       Page 121, after line 16, insert (and make such technical 
     and conforming changes as may be appropriate):

     SEC. 231. PRIVACY POLICY ENFORCEMENT.

       (a) FTC and State Attorneys General Authority To Protect 
     Personal Privacy.--
       (1) In general.--Chapter 3 of title 11, United States Code, 
     is amended by inserting after section 307 the following new 
     section:

     ``Sec. 308. Personally identifiable information; authority of 
       Federal Trade Commission and State attorneys general

       ``(a) FTC Authority.--The Federal Trade Commission may 
     appear and be heard in any case or proceeding under this 
     title in which personally identifiable information is, or is 
     proposed to be, used, sold, leased, or otherwise disclosed in 
     violation of section 363(b)(3).
       ``(b) Authority of State Attorneys General.--A State, as 
     parens patriae, may appear and be heard in any case or 
     proceeding under this title in which--
       ``(1) the attorney general of a State has reason to believe 
     that the personally identifiable information of the residents 
     of that State has been or is threatened or adversely 
     affected; and
       ``(2) personally identifiable information is, or is 
     proposed to be, used, sold, leased, or otherwise disclosed in 
     violation of section 363(b)(3).
       ``(c) No Affect on Other Authority.--Nothing in this 
     section shall be construed to limit the authority of the 
     Federal Trade Commission or a State to appear and be heard in 
     any case or proceeding--
       ``(1) as a creditor where the Federal Trade Commission or a 
     State asserts a claim against a debtor based on alleged 
     violations of statutes within the enforcement jurisdiction of 
     the Federal Trade Commission or the State; or
       ``(2) as a party in interest concerning other matters or 
     issues within the jurisdiction of the Federal Trade 
     Commission or the State.''.
       (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. Personally identifiable information; authority of Federal Trade 
              Commission and State attorneys general.''.
       (b) Limitation On Sale, Use, or Lease of Certain Personally 
     Identifiable Information.--Section 363(b) of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(3)(A) If the debtor is not an individual, personally 
     identifiable information in the possession of the debtor that 
     relates to any other person may only--
       ``(i) be used by the debtor--
       ``(I) in accordance with the terms of the debtor's privacy 
     policy in effect at the time of the bankruptcy filing; or
       ``(II) if no such privacy policy relating to the personally 
     identifiable information was in effect at the time of the 
     bankruptcy filing, in accordance with subparagraph (B); and
       ``(ii) be sold, leased, or otherwise disclosed by the 
     debtor--
       ``(I) to a nondebtor party; and
       ``(II) in accordance with subparagraph (B).
       ``(B) In the case of the use, sale, lease, or other 
     disclosure of personally identifiable information, as 
     described in clause (i)(II) or (ii) of subparagraph (A), the 
     debtor shall provide prior clear and conspicuous notice to 
     the person to whom the personally identifiable information 
     relates of--
       ``(i) the proposed use, sale, lease, or other disclosure of 
     the information;
       ``(ii) the identity of the purchaser, lessee, or other 
     recipient of the information, if applicable;
       ``(iii) the privacy policy of the purchaser, lessee, or 
     other recipient of the information, if applicable; and
       ``(iv) the right of that person to choose not to have the 
     information used or transferred, and an opportunity to choose 
     not to have the information used or transferred.
       ``(C) The bankruptcy court, after notice to all parties in 
     interest and the Federal Trade Commission and hearing--
       ``(i) shall establish mechanisms for providing clear and 
     conspicuous notice and choice referred to in subparagraph 
     (B); and
       ``(ii) may tailor such mechanisms to the specific 
     circumstances of a case, as determined by the bankruptcy 
     court.''.
       (c) Definition of Personally Identifiable Information.--
     Section 101 of title 11, United States Code, is amended by 
     inserting after paragraph (41) the following:
       ``(41A) `personally identifiable information' means, with 
     respect to the person to whom the information relates--
       ``(A) a first name, initials, and last name of that person, 
     whether given at birth or adoption, assumed, or legally 
     changed;
       ``(B) a home or other physical address for that person, 
     including street name and name of city or town;
       ``(C) an e-mail address for that person;
       ``(D) a telephone number for that person;
       ``(E) a social security account number for that person;
       ``(F) a credit card account number for that person;
       ``(G) a birth date, birth certificate number, or place of 
     birth for that person;
       ``(H) information concerning that person that the debtor 
     collects and combines with any other identifier described in 
     this paragraph; and
       ``(I) any other identifying information relating to that 
     person that permits the physical or electronic contacting or 
     identification of that person, as determined by the 
     bankruptcy court.''.
       Page 198, strike lines 3 and 4 and insert the following:
     308, as added by this Act, the following:

     ``Sec. 309. Debtor reporting requirements

       Page 199, strike line 15 and all that follows through the 
     end of the material between lines 15 and 16 and insert the 
     following:
     section 308, as added by this Act, the following:
``309. Debtor reporting requirements.''.
       Page 254, after line 4, insert the following (and make such 
     technical and conforming changes as may be appropriate):

     SEC. 605. PROTECTION OF PERSONAL PRIVACY IN BANKRUPTCY CASES.

       (a) Personal Privacy Protection.--Section 107 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(c) Electronic Access.--
       ``(1) In general.--The clerk of the bankruptcy court, the 
     United States trustee, and the trustee in a case under this 
     title may provide electronic access to a paper filed in a 
     case under this title, to any of the information contained in 
     a paper filed in such a case, and to the dockets of a 
     bankruptcy court only as permitted in this subsection.
       ``(2) Limitations on access.--Except as provided in 
     paragraph (3), the clerk of the bankruptcy court, the United 
     States trustee, and the trustee in the case may not provide 
     electronic access--
       ``(A) to the debtor's social security number, date of 
     birth, mother's maiden name, telephone number, or account 
     numbers (including bank account and credit card account 
     numbers);
       ``(B) to any of the single line items in the debtor's 
     schedule of assets or statement of income and expenditures; 
     or
       ``(C) to any personal, medical, or financial information 
     regarding the debtor or a relative of the debtor.
       ``(3) Permissible access.--The clerk of the bankruptcy 
     court, the United States trustee, and the trustee in the case 
     may provide electronic access to the information specified in 
     paragraph (2) to--
       ``(A) a party in interest in the case;
       ``(B) an entity that requires any such information to 
     determine whether it is a party in interest in the case;

[[Page 2621]]

       ``(C) the trustee in the case;
       ``(D) the United States trustee; or
       ``(E) a governmental unit that requires any such 
     information for a bona fide law enforcement purpose.
       ``(4) Certification required.--A party or entity whose only 
     basis for obtaining electronic access to information in a 
     case under this title is under subparagraph (A) or (B) of 
     paragraph (3) shall, as a condition to obtaining electronic 
     access to any of the information listed in paragraph (2), 
     certify, in writing or in electronic form, to the clerk of 
     the bankruptcy court, the United States trustee, or the 
     trustee in the case, as the case may be, that the party or 
     entity--
       ``(A) properly qualifies for electronic access to 
     information under paragraph (3);
       ``(B) will use the information obtained through electronic 
     access only for the purpose of--
       ``(i) participating or determining whether to participate 
     in the case;
       ``(ii) the entity's own internal credit evaluation of the 
     debtor; or
       ``(iii) providing the information to a governmental unit 
     for a bona fide law enforcement purpose;
       ``(C) will use reasonable means to secure the information 
     obtained from unauthorized access and disclosure; and
       ``(D) will comply with the requirements of paragraph (6).
       ``(5) Maintenance of records.--The clerk of the bankruptcy 
     court, the United States trustee, or the trustee in the case, 
     as the case may be, shall maintain a record of, and shall 
     make available to the debtor, the identity of and contact 
     information for any entity that has obtained electronic 
     access to information in a case under this title.
       ``(6) Duties of recipient.--Upon written request by the 
     debtor, an entity that has obtained electronic information 
     under this subsection shall promptly inform the debtor of the 
     content of the information stored by the entity and shall 
     correct any such information to the extent that it differs 
     from the information contained in the records of the 
     bankruptcy court.
       ``(7) Liability.--A party or entity that is required to 
     make the certification required under paragraph (4), that 
     obtains electronic access to information in a case, and that 
     does not provide or does not comply with the certification is 
     liable to the debtor for--
       ``(A) any actual damages;
       ``(B) the debtor's attorney's fees and costs in enforcing 
     compliance with this subsection;
       ``(C) $500 per violation; and
       ``(D) punitive damages, if the violation is willful or part 
     of a pattern or practice of violations of this subsection.
       ``(8) Use by official recipients.--An entity that obtains 
     electronic access to information under subparagraph (C), (D), 
     or (E) of paragraph (3)--
       ``(A) may use the information concerning an individual 
     debtor only in connection with carrying out the official 
     duties of that entity in connection with the administration 
     of the case or the administration of the bankruptcy system in 
     general; and
       ``(B) may not provide electronic access to any such 
     information concerning an individual debtor, except in 
     accordance with the provisions of this subsection.
       ``(9) Access to statistical information.--The clerk of the 
     bankruptcy court may provide electronic access to statistical 
     information concerning cases and information concerning 
     particular cases without regard to the restrictions of this 
     subsection, but only if the information does not include any 
     means of identifying a particular debtor's name, social 
     security number, date of birth, mother's maiden name, 
     telephone number, address, or account numbers (including bank 
     account and credit card account numbers).
       ``(10) Definition.--For purposes of this subsection, 
     `electronic access' means access through electronic means, 
     such as through a computer or telephone, to a database or to 
     court or other electronic records, without human 
     intervention.
       ``(11) Applicability to individuals.--This subsection 
     applies only in a case in which the debtor is an 
     individual.''.
       (b) Conforming Amendment.--Section 107(a) of title 11, 
     United States Code, is amended by striking ``subsection (b)'' 
     and inserting ``subsections (b) and (c)''.
       (c) Clerical Amendments.--Section 107 of title 11, United 
     States Code, is amended--
       (1) by inserting ``General Access.--'' after ``(a)''; and
       (2) by inserting ``Protected Matter.--'' after ``(b)''.
       (d) Effective Date.--The amendments made by this section 
     shall become effective 180 days after the date of enactment 
     of this Act.
       Page 145, strike lines 19 through 23 (and make such 
     technical and conforming changes as may be appropriate).
       Beginning on page 147, strike line 6 and all that follows 
     through line 16 on page 148, and insert the following:
       ``(4)(A) For purposes of paragraph (1)(B), the term 
     `household goods' includes tangible personal property 
     normally found in or around a residence, but does not include 
     motorized vehicles used for transportation purposes.''.
       Page 159, line 12, insert ``, or on a showing of good cause 
     such longer period as the court considers to be reasonable,'' 
     after ``45 days''.
       Page 167, strike lines 21 through 24 (and make such 
     technical and conforming changes as may be appropriate).
       Page 236, line 8, strike ``described in section 523(a)(2) 
     or''.
       Page 182, line 3, strike the close quotation marks and the 
     period at the end.
       Page 182, after line 3, insert the following (and make such 
     technical and conforming changes as may be appropriate):
       ``(iii) The court may extend the time periods specified in 
     this paragraph if the debtor establishes by clear and 
     convincing evidence that an extension is justified by 
     circumstances beyond the debtor's control that were not 
     foreseeable on the date of the order for relief.''.
       Page 186, line 18, strike ``The'' and insert ``Unless the 
     debtor establishes by clear and convincing evidence that 
     there are circumstances beyond the debtor's control that were 
     not foreseeable on the date of the order of relief, the''.
       Page 186, line 21, strike ``The'' and insert ``Unless the 
     debtor establishes by clear and convincing evidence that 
     there are circumstances beyond the debtor's control that were 
     not foreseeable on the date of the order of relief, the''.

       Page 191, after line 24, insert the following (and make 
     such technical and conforming changes as may be appropriate):
       ``(4) The court may extend the time period specified in 
     paragraph (2) if the debtor establishes by clear and 
     convincing evidence that an extension is justified by 
     circumstances beyond the debtor's control that were not 
     foreseeable on the date the assurance of payment was due.
       Page 201, line 7, insert ``(a)'' before ``In''.
       Page 202, line 25, strike the close quotation marks and the 
     period at the end.
       Page 202, after line 25, insert the following:
       ``(b) The court may extend the time periods specified in 
     paragraphs (1) and (3) of subsection (a) if the debtor 
     establishes by clear and convincing evidence that an 
     extension is justified by circumstances that there are beyond 
     the debtor's control that were not foreseeable on the date of 
     the order of relief.''.
       Page 204, line 5, strike ``and'' at the end.
       Page 204, line 7, strike the close quotation marks and the 
     period at the end.
       Page 204, after line 7, insert the following (and make such 
     technical and conforming changes as may be appropriate):
       
       ``(D) the debtor establishes by clear and convincing 
     evidence that an extension is justified by circumstances 
     beyond the debtor's control that were not foreseeable on the 
     date of the order of relief.''.
       Page 204, line 14, insert ``or the debtor establishes by 
     clear and convincing evidence that an extension is justified 
     by circumstances beyond the debtor's control that were not 
     foreseeable on the date of the order for relief'' after 
     ``1121(e)(3)''.
       Page 353, line 19, insert ``of this title or the transfer 
     of the asset-backed securitization would not be a true 
     transfer, conveyance or sale under nonbankruptcy law'' after 
     ``548(a)''.
       Page 194, after line 8, insert the following (and make such 
     technical and conforming changes as may be appropriate):

     SEC. 420. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.

       Section 503(b)(1)(A) of title 11, United States Code, is 
     amended to read as follows:
       ``(A) The actual, necessary costs and expenses of 
     preserving the estate, including wages, salaries, or 
     commissions for services rendered after the commencement of 
     the case, and wages awarded as backpay and benefits 
     attributable to any period of time after commencement of the 
     case as a result of the debtor's violation of Federal or 
     State law, without regard to when the original unlawful act 
     occurred or to whether any services were rendered.''.
       Page 194, before line 9, insert the following (and make 
     such technical and conforming changes as may be appropriate):

     SEC. 421. CLARIFICATION OF DEBTOR'S DUTIES.

       (a) Duties.--Section 521 of title 11, United States Code, 
     as amended by this Act, is amended by inserting after 
     paragraph (6) the following:--
       ``(7) unless a trustee is serving in the case, the debtor 
     who, at the time of the commencement of the case, served as 
     the administrator or plan sponsor of an employee benefit 
     plan, pursuant to section 1002(16) of title 29, United States 
     Code, shall continue to perform the obligations required of 
     the plan administrator or plan sponsor; and
       ``(8) unless a trustee is serving in the case, where a 
     proof of claim is filed on behalf of employees or retirees of 
     the debtor by a labor organization serving as the collective 
     bargaining representative of such employees or retirees, the 
     debtor shall, for the purpose of facilitating the location 
     of, and distribution to the employees and retirees of the 
     allowed amount of the claim, provide to such collective 
     bargaining representative a complete list of such employees 
     or retirees and their current addresses as listed on the 
     books and records of the debtor, and such other information 
     as may reasonably be requested for the purpose of aiding in 
     the claims distribution.''.
       (b) Chapter 7.--Section 704 of title 11, United States 
     Code, as amended by this Act,

[[Page 2622]]

     is amended by adding at the end the following:
       ``(12) where, at the time of the commencement of the case, 
     the debtor served as the administrator or plan sponsor of an 
     employee benefit plan, pursuant to section 1002(16) of title 
     29, United States Code, continue to perform the obligations 
     required of the plan administrator or plan sponsor;
       ``(13) where a proof of claim is filed on behalf of 
     employees or retirees of the debtor by a labor organization 
     serving as the collective bargaining representative of such 
     employees or retirees, provide to such collective bargaining 
     representative a complete list of such employees or retirees 
     and their current addresses as listed on the books and 
     records of the debtor, and such other information as may 
     reasonably be requested for the purpose of aiding in the 
     distribution of allowed claims to such employees or retirees; 
     and
       ``(14) assume the obligations of the debtor to withhold, 
     report, and pay withholding taxes to the appropriate taxing 
     authority with respect to the distribution of allowed claims 
     for employee compensation and prepare and submit the reports 
     and returns required by such authorities.''.
       (c) Chapter 11.--Section 1106(a)(1) of title 11, United 
     States Code, is amended to read as follows:
       ``(1) perform the duties of the trustee as specified in 
     section 704(2), (5), (7), (8), (9), (10), (11), and (12);''.
       (d) Official Form.--The Advisory Committee on Bankruptcy 
     Rules of the Judicial Conference of the United States shall 
     propose for adoption an Official Bankruptcy Form to be used 
     to file a proof of multiple claim for wages owed to employees 
     of the debtor.
       Page 358, after line 18, insert the following (and make 
     such technical and conforming changes as may be appropriate):

     SEC. 1004. EXPANDED DEFINITION OF FAMILY FARMER.

       Section 101(18) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A)--
       (A) by striking ``$1,500,000'' and inserting 
     ``$3,000,000'';
       (B) by striking ``80'' and inserting ``65''; and
       (C) by striking ``the taxable year preceding the taxable 
     year'' and inserting ``at least 1 of the 3 taxable years 
     preceding the taxable year''; and
       (2) in subparagraph (B)--
       (A) in clause (ii), by striking ``80'' and inserting 
     ``65''; and
       (B) in clause (ii), by striking ``$1,500,000'' and 
     inserting ``$3,000,000''.
       Page 393, after line 13, insert the following (and make 
     such technical and conforming changes as may be appropriate):

     SEC. 1236. TECHNICAL CORRECTIONS TO THE COLLEGE SCHOLARSHIP 
                   FRAUD PREVENTION ACT OF 2000.

       (a) Sentencing Enhancement Guidelines.--Section 3 of the 
     College Scholarship Fraud Prevention Act of 2000 (Public Law 
     106-420) is amended--
       (1) by striking ``obtaining or providing of'' and inserting 
     ``the obtaining of, the offering of assistance in 
     obtaining''; and
       (2) by striking ``base offense level for 
     misrepresentation'' and inserting ``enhanced penalties 
     provided for in the Federal sentencing guidelines for an 
     offense involving fraud or misrepresentation''.
       (b) Limitation on Exempt Property.--Section 522(c)(4) of 
     title 11, United States Code, as added by section 4 of the 
     College Scholarship Fraud Prevention Act of 2000 (Public Law 
     106-420), is amended--
       (1) by striking ``in the obtaining or providing of'' and 
     inserting ``or misrepresentation in the providing of, the 
     offering of assistance in obtaining, or the furnishing of 
     information to a consumer on,''; and
       (2) by striking ``(20 U.S.C. 1001)''.
       (c) Effective Date; Application of Amendments.--
       (1) Effective date.--Except as provided in paragraph (2), 
     this section and the amendments made by this section shall 
     take effect on November 1, 2000.
       (2) Application of section 552(c)(4) of title 11, united 
     states code.--Section 522(c)(4) of title 11, United States 
     Code, as added by section 4 of the College Scholarship Fraud 
     Prevention Act of 2000 (Public Law 106-420) and as amended by 
     subsection (b) of this section, shall apply only with respect 
     to cases commenced under title 11, United States Code, on or 
     after November 1, 2000.
       Beginning on page 419, strike lines 5 through 23 (and make 
     such technical and conforming changes as may be appropriate).

  The CHAIRMAN pro tempore. Pursuant to House Resolution 71, the 
gentlewoman from Texas (Ms. Jackson-Lee) and the gentleman from 
Wisconsin (Mr. Sensenbrenner) each will control 30 minutes.
  The Chair recognizes the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, the Democratic substitute makes a number of technical 
improvements to this bill. It modifies some of the most onerous 
provisions on lower-income debtors and struggling businesses. We had 
hoped that most of these amendments could have been accepted by the 
bill's supporters during the committee markup on the bill. However, the 
majority have objected to each and every amendment that we were able to 
offer, no matter how obvious, technical, or noncontroversial.
  I think, as the ranking member began his remarks, the gentleman from 
Michigan (Mr. Conyers), we noted that this bill has moved at a very 
fast and very unmeasured speed, so the collaborative efforts have 
fallen short.
  We would hope our colleagues would join us in understanding some of 
the sensitivities that we are trying to express that H.R. 333 needs to 
correct: the recognition, of course, of catastrophic illnesses and how 
it impacts those who file for bankruptcy; how those who are senior 
citizens fall upon hard times and need to file for bankruptcy; how 
women and children are negatively impacted and have to file for 
bankruptcy as it relates to alimony and child support of the particular 
debtor; that they are now seeking their alimony and child support and 
cannot do so, and it leads to catastrophic events in their lives.
  If they realize, as well, or if the authors of the bill recognize 
that there are some indications that our economy has some weaknesses, 
this would be the absolute wrong time not to enhance legislation, of 
course, and to begin to acknowledge that in fact some of the provisions 
of this bill actually close or slam the door in the faces of hard-
working Americans. That is why we have the AFL-CIO and so many women's 
groups who oppose this particular amendment, representing millions of 
Americans, this particular legislation.
  While the provisions in the amendment are too numerous to describe in 
detail, here are a few examples to illustrate the point.
  First, our amendment contains provisions clarifying the deductibility 
of health care costs from the means test. Without this amendment, a 
single mother could not claim as an expense the cost of medical care 
for a child who was seriously injured in a car accident after the date 
that the bankruptcy petition was filed.
  The ability to claim medical costs as an expense under the means test 
should not turn on whether the condition occurred before the petition 
has been filed. One is still seriously injured.
  Second, our amendment seeks to correct an oversight in the bill is 
that would directly impact on children. Although the bill allows 
parents to list the costs of caring for their dependent children as a 
monthly expense, the costs of caring for foster children are not 
included.
  Parents who volunteer to become foster parents should not have a 
harder time making ends meet during a bankruptcy than biological 
parents.
  Interestingly enough, Mr. Chairman, I work with foster parents in 
Harris County in Texas. In fact, we work to solicit, recruit foster 
parents to provide sort of an interlude for foster parents who never 
get vacations, sort of say to them that we thank them.
  I can assure the Members that this is a real aspect of this bill that 
need to be corrected. It goes without saying that we should not be 
passing laws in this Congress that penalize children who have to be in 
foster homes and, as well, the loving foster parents.
  Third, our amendment seeks to correct obvious shortcomings in the 
bill. For example, the bill says that for purposes of the means test, 
median income is based upon Census Bureau figures.
  As we all know, the census only occurs once every 10 years, and 
obviously the economy is one that changes precipitously, as we have 
noted over the last couple of weeks, days, and months, which means that 
under this bill, in its current form, a debtor in 2009 would not pass 
the means test if her monthly income falls below the median income from 
2000.
  How ridiculous. How much of a difficulty would that debtor be placed 
in? All that our provision says is that those census figures should be 
adjusted periodically by Consumer Price Index updates.
  The last position in our amendment that I am going to address is 
intended to respond to the arbitrary nature of

[[Page 2623]]

the business bankruptcy provisions. The bill imposes all kind of bright 
line rules and firm deadlines on businesses seeking to reorganize. We 
would think that, at this time of economic uncertainty, we would want 
to be doing all that we can to ensure that Americans keep their jobs. 
We know some are losing them as we speak, but the business bankruptcy 
provisions do just the opposite. If a small business cannot complete 
its Chapter 11 reorganization plan under the bill's draconian 
timetable, then the business will be forced to liquidate.
  Let me say to the thousands and millions of small businesses and 
medium-sized businesses, and maybe even large businesses all over 
America, they should be listening. We have not heard from them as to 
their understanding that what I have just said is that their doors will 
be closing, even if a delay is caused through no fault of the small 
business, such as when the reorganization is delayed pending the 
completion of a regulatory proceeding. We are slamming the doors shut 
on business all over America, and we are putting people on the streets 
without jobs.

                              {time}  1300

  Once the deadline passes, the businesses will have to simply shut 
their doors. That means jobs will be lost, and this bill will 
contribute to increased unemployment in America, not reinforcing the 
value of holding your head up high, paying off your responsibilities, 
but yet what it will do is undermine hard-working Americans, and 
certainly our wonderful entrepreneurs who keep this economy running.
  Although time allows me to discuss only a sampling of the provisions, 
I would like to emphasize that this amendment and this substitute is an 
extremely important bill that adds to H.R. 333. Mr. Chairman, I would 
like my colleagues to join me in supporting this legislation.
  Mr. Chairman, I am pleased to come before you today with my fellow 
colleagues to offer the Conyers-Nadler-Scott-Watt-Jackson Lee-Baldwin-
LaFalce-Tierney Democratic Substitute that would make a number of 
technical improvements to the Bankruptcy bill and modify some of the 
most onerous provisions on lower income debtors and struggling 
businesses.
  Mr. Chairman, some of the important modifications that the Democratic 
Substitute would make to the Bankruptcy bill would be to amend page 10, 
line 14 of H.R. 333 to merely add a debtor's monthly public school 
expenses as an allowable expense under the means test. This is 
important because it would put public school expenses at an equal 
footing with that of private school expenses which is already included 
in the bill.
  The principal problem with the means test is that the rigid one-size-
fits-all test in determining eligibility for Chapter 7 and the 
operation of Chapter 13 will often operate in an arbitrary fashion.
  Access to bankruptcy would be more difficult, especially for low-
income filers who are not able to meet the requirements because they 
cannot list public school expenses as an allowable expense as would 
their private school counterparts. The ``safe harbor'' provision that 
is supposed to protect some low-income families from the application of 
the IRS standards will not protect many single mothers, because it is 
based on the combined income of the debtor and the debtor's spouse--
even if they are separated and the mother who is filing for bankruptcy 
is receiving no support from the non-debtor spouse from whom she is 
separated. As the Committee knows, the majority of low-income families 
send their children to public schools (as opposed to higher-income 
people) because they cannot afford the private school tuition. It would 
seem that if the true intent of this bill were to assist all Americans, 
a provision recognizing public school tuition would have accompanied 
the recognition of private school tuition as an allowable expense under 
the ``means test,'' however, this is not the case.
  Under this important amendment, low-income people will have a more 
flexible standard (that is consistent with that of high-income people) 
that would allow the debtor to have a fair opportunity to financial 
recourse, which is not possible under the legislation as written. I 
think such a change in the standard would be warmly welcomed for 
middle-income and low-income filers.
  The Democratic Substitute would also address one of the real flaws of 
H.R. 333, the means test approach as it relates to business debtors. It 
is well known that business debtors enjoy considerable favorable 
treatment are accorded under the means-test contained when compared to 
non-business debtors under H.R. 333.
  H.R. 333's means-testing, regrettably, is known to be arbitrary and 
unworkable in practice. A one-size fits-all test will simply hurt low 
and middle-income filers disproportionately. Accordingly, the 
Democratic Substitute would ensure that business debtors are treated as 
favorably as non-business debtors within the framework of the means-
testing standard contained in the bill by essentially expanding the 
means-test to apply to business debts.
  Let me explain a few of the glaring difficulties with treatment of 
business debtors under H.R. 333. First, the bill relies upon IRS 
collection standards, which lay out no comprehensive or specific 
standards for the deduction of living expenses. In fact, the bill even 
fails to provide specific guidance concerning the appropriateness of 
deducting part or all of the funds a debtor may expend for items such 
as health care (both medical expenses and health insurance), taxes, and 
accounting and legal fees, among other things.
  The 1973 Commission on Bankruptcy Laws similarly considered and 
rejected industry calls for mandatory Chapter 13s, noting that Congress 
itself rejected similar proposals in 1967, and observed: ``[b]usiness 
debtors are not subject to any limitation on the availability of 
straight bankruptcy relief, including discharge from debts, and it was 
pointed out, quite apart from bankruptcy, business debtors are able to 
incorporate and to limit their liability to their investments in 
corporate assets . . .'' See Report of the Commission on Bankruptcy 
Laws, H.R. Doc. No. 137, Part I, 93rd Congress, 15859 (1973).
  The bottom line is that business debtors incur a windfall if the 
legislation is not amended. There are several consumer provisions in 
the bill that will exact hardships on all debtors, regardless of income 
level or degree of culpability. This will harm consumers, especially 
low-income filers and place them on an unfair playing field when 
compared to business debtors. For example, by allowing landlords to 
continue eviction or unlawful detainer actions even after debtors have 
obtained an automatic stay, the bill will force many battered women and 
families with children and seniors out on the streets, without ever 
having an opportunity to use bankruptcy to catch up on their rents.
  Mr. Chairman, there is a sense that the approach regarding business 
and non-debtors within H.R. 333 must be revisited if bankruptcy reform 
is realized this year. The Democratic Substitute would solve this 
problem.
  The Democratic Substitute would also address an important aspect of 
H.R. 333, disaster relief for debtors. Disaster relief is not 
recognizable as something you can write off in H.R. 333 as income. The 
Democratic Substitute would include disaster relief as part of 
allowable deductions within means-testing under H.R. 333. This would 
restore some fundamental fairness to the legislation, particularly when 
we think of the tragic accidents that occur with regular frequency in 
America.
  If means-testing and other consumer provisions will harm low-income 
and middle-income people, then H.R. 333 is sure to have an undesirable 
effect on consumers that are victims of disasters. While it is unclear 
how such costs will affect the overall bankruptcy system, it is clear 
that excluding disaster assistance from allowable expenses under the 
means-test in H.R. 333 is an unfortunate and unnecessary component of 
the bill.
  The Democratic Substitute also modifies some of the most onerous 
provisions on lower income debtors and struggling businesses by 
excluding persons below the poverty line from having to fulfill 
burdensome paperwork requirements that would otherwise be necessary to 
demonstrate that the debtor does not meet the requirements of means 
test. Under the provisions of the bill before the Rules Committee today 
these individuals would be prevented from having a fair and justifiable 
opportunity to file for bankruptcy due to financial restraints.
  The Democratic Substitute would also discourage creditors from 
attempting to secure repayment of debts by entering into abusive 
reaffirmation agreements with debtors by providing safeguards so that 
debtors are made aware of exactly what debts they are agreeing to 
repay, whether they are secured or unsecured, and provides an 
opportunity for the court to determine whether the amendment is in the 
debtor's best interest and would eliminate the provision in the bill 
that expands the exception to discharge for student loans to cover a 
wide range of student loans, not just government insured loans and 
loans from nonprofit organizations.
  Mr. Chairman, we can not risk the creation of a ``two-tier'' credit 
system in this country that generally ignores the interests of 
individuals at lower income levels. The significant

[[Page 2624]]

problems that are present within H.R. 333 will be addressed if you 
allow the Democratic Substitute to be debated on the floor. We must 
press forward and work together to find the best way to accomplish 
these goals for the greater benefit of all of the parties involved in 
this process.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise in opposition to the substitute amendment 
offered by the gentlewoman from Texas (Ms. Jackson-Lee), my colleague, 
and others. This amendment is problematic for several very important 
reasons.
  First, it eviscerates more than 3 years of careful consideration, 
analysis, negotiation and compromise embodied in H.R. 333's needs-based 
reforms.
  For example, one provision of this amendment completely rewrites the 
standard for overcoming the presumption of abuse in cases where debtors 
have the ability to pay debts. Although I did not participate in the 
negotiations that transpired between the House and the Senate last 
year, I am informed that H.R. 333's provisions are the product of 
intense analysis and exhaustive negotiation.
  Second, the substitute amendment introduces truly novel concepts that 
have, to my knowledge, not been the subject of any oversight hearing by 
the House Committee on the Judiciary. These provisions, although 
perhaps well-intentioned, attempt to address various privacy issues 
perceived to be present in the bankruptcy system.
  Under current law, most information filed in connection with a 
bankruptcy case is available to the public. Both the Justice Department 
and the Judicial Conference of the United States, however, have 
recently begun to consider whether unlimited public access to such 
information through the Internet and other electronic means should 
somehow be restricted.
  Nevertheless, the substitute imposes a broad array of restrictions 
and requirements with regard to this matter and provides for the award 
of punitive damages for their violation under certain circumstances.
  Rather than slip these substantive provisions in an amendment filed 
on the eve of floor consideration of this bill, they should be the 
subject of an oversight hearing where they can be aired in the light of 
day and the public should be given an opportunity to be heard.
  Third, this amendment attempts to include in the bill amendments that 
were roundly defeated during the Committee on the Judiciary's markup of 
H.R. 333 last month.
  Out of 18 amendments considered during the markup, the bill was 
reported with only one modest amendment making minor technical and 
conforming revisions.
  The bill as reported clearly reflects the considered judgment of the 
Committee on the Judiciary that H.R. 333 is the product of an 
exhaustive and mandatory process, as well as extensive negotiation, and 
does not need to be further amended.
  Accordingly, I urge my colleagues to oppose this substitute amendment
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the Democratic substitute is an effort to make a number 
of improvements to the bill and to modify and take the sting out of 
some of the most onerous provisions on lower income debtors and 
struggling small businesses.
  We had hoped that some of these, if not even most of the amendments, 
would have been accepted by the bill's supporters during the markup in 
the Committee on the Judiciary, but they have been all with great 
regularity rejected, and every amendment that we were able to offer was 
technical. No matter what happened, we were not able to get our message 
through.
  While the provisions in the amendment are too numerous to describe 
here, a few details illustrate the fact that we have a clarification of 
the deductibility of health care costs from the means tests.
  We correct an oversight in the bill that would directly impact on 
children, which allows parents to list the costs of caring for their 
dependent children as a monthly expense, but the costs of caring for 
foster children are not included at all.
  Parents who voluntarily become foster parents will have a harder time 
making ends meet during bankruptcy than biological parents. Obviously, 
we do not think this was intended by even the Members of the House 
Committee on the Judiciary, and we wanted to correct it.
  We have other shortcomings that are dealt with. The bill says that 
for purposes of a means test, the medium income is based on Census 
figures, but that only occurs every 10 years. We need something a 
little more periodically adjusted, for example, by Consumer Price Index 
updates.
  Finally, the arbitrary nature of business banking provisions seems to 
be in order. A small business cannot complete its chapter 11 
reorganization plan under the bill's very, very tough timetable. We 
have asked that we have a little bit more flexibility in that area.
  Small businesses are the place where more jobs are created in this 
country than anywhere else, and so it is very important that these and 
other mentioned remedies and corrections be included, which have been 
previously mentioned.
  I am hoping that the substitute amendment offered by myself and 
several of our colleagues would be accepted by the majority of the 
Members in the House.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 4 minutes to the gentleman 
from Pennsylvania (Mr. Gekas).
  Mr. GEKAS. Mr. Chairman, I thank the gentleman from Wisconsin (Mr. 
Sensenbrenner) for yielding the time to me, and I rise in opposition to 
the substitute offered by the gentleman from Michigan (Mr. Conyers).
  If we were to adopt the tenets of the substitute that has been 
offered here, and that is what the intention is in the offering in the 
first place, we would be wiping out the tremendous advances in reform 
of bankruptcy that we have made up to now.
  For instance, the gentleman from Virginia (Mr. Boucher) outlined in 
his presentation how we have changed the priorities for alimony and 
women's rights in support matters from what now exists as being a 
number 7 position, behind attorneys fees, I believe, in priorities, 
that is the existing system, to a situation where we place women, 
alimony, support, all the women's and children's issues, at the first 
priority.
  What it means is if my colleagues vote for the substitute, my 
colleagues are reverting back to the current situation which places 
women number 7. We want them to be number 1.
  The bankruptcy reform measure which is before my colleagues permits 
that, mandates that, brings women up to a number 1 position in claims 
under bankruptcy. If my colleagues want to go back to the system, make 
women number 7, then vote for the substitute.
  The other situation that is obvious about the substitute is that it 
will not honor what we have tried to do with reform of small business 
and the business bankruptcies under chapter 11. Everyone should 
recognize that what we did in this bill was to adopt the 
recommendations of the Bankruptcy Commission with respect to business, 
reorganizations and bankruptcies.
  If my colleagues vote for the substitute, my colleagues are erasing 
the recommendations of the Bankruptcy Commission, which this Congress 
authorized in the first place, to develop reforms in business 
bankruptcies.
  Mr. Chairman, I say to my colleagues, if my colleagues want to go 
back to the primitive stages of bankruptcy which have caused this flood 
of bankruptcies or want to enter into a new phase of more 
responsibility for all phases of bankruptcy, then my colleagues too can 
argue about what my colleagues want to argue about.
  The other phase to show my colleagues is the lack of foresight on the

[[Page 2625]]

part of the people who are supporting the substitute.
  Mr. Chairman, I would like to ask a question of the gentleman from 
Michigan (Mr. Conyers), does the substitute include the recommendations 
for a change in homestead exemption?
  Mr. CONYERS. Mr. Chairman, will the gentleman yield?
  Mr. GEKAS. I yield to the gentleman from Michigan.
  Mr. CONYERS. No, sir, it does not.
  Mr. GEKAS. Mr. Chairman, then I will skip that part of the argument.
  Mr. WATT of North Carolina. Mr. Chairman, will the gentleman yield?
  Mr. GEKAS. I yield to the gentleman from North Carolina.
  Mr. WATT of North Carolina. Mr. Chairman, I appreciate the gentleman 
from Pennsylvania (Mr. Gekas) yielding to me.
  Mr. Chairman, I was going to suggest to the gentleman that he skip 
the first part of the argument, too, because this amendment does not do 
anything about the priorities. I was wondering whether he was debating 
another amendment possibly.
  Mr. GEKAS. Mr. Chairman, I want to thank the gentleman from North 
Carolina (Mr. Watt) for setting me right on this.
  Mr. Chairman, the point is that the substitute wrecks bankruptcy 
reform. What I am trying to get across, and what I hope is the message 
to all the Members is that any amendments practically that would harm 
the basic reforms that we put into this measure are unacceptable.
  Mr. Chairman, I ask that we vote down this substitute, as well as the 
other amendments.
  Mr. WATT of North Carolina. Mr. Chairman, I ask unanimous consent to 
control the time for our side.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
North Carolina?
  There was no objection.
  Mr. WATT of North Carolina. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, I just want to say that it is very magnanimous of the 
gentleman from Pennsylvania (Mr. Gekas) to say that they are following 
a set of recommendations that were put forward by the Commission. This 
actually is the only one recommendation in their bill that they 
followed. They threw out 95 percent of the rest of the recommendations 
of that Commission, and nothing in this bill really follows the 
recommendations of the Commission.
  Mr. Chairman, I yield 4 minutes to the gentleman from Virginia (Mr. 
Scott).
  Mr. SCOTT. Mr. Chairman, I thank the gentleman from North Carolina 
(Mr. Watt) for yielding the time to me.
  Mr. Chairman, I rise to speak in support of the amendment, which 
would add several improvements to H.R. 333. While the proponents of the 
underlying legislation portray this as a compromised bill, the approach 
in this bill is, in fact, a significant departure from well-established 
sound principles and procedures designed to protect consumers. It 
eliminates the tradition of a fresh start for those who are willing to 
cash in all of their chips to get the fresh start.
  The underlying bill prevents most Americans from getting access to 
that fresh start and creates more people in our communities who will be 
financially desperate with nothing to lose.
  There are several amendments that I would like to speak to in the 
substitute. One, the underlying bill directs the debtor to pay all that 
they can after food and rent towards their debts. In calculating what 
they can pay, it is only reasonable that we base the determination on 
the actual monthly income.
  The underlying bill, however, counts all of your income for the last 
6 months to determine what your average monthly income is, and that 
could include money that we received from a job that we have lost, 
money from an inheritance, or a gift, or an automobile accident 
settlement, things that are not going to be there. The court ought to 
have the opportunity to adjust your income to fit actual reality.
  This amendment would allow the court to disregard one-time 
nonrecurring funds or take into consideration the fact that you lost 
the job, and that is what put you into financial distress to begin 
with.
  Second, the amendment deals with illnesses for family members. The 
underlying bill allows you to consider ongoing expenses involved in 
illnesses or disabilities of family members, but it does not recognize 
new illnesses that may come about during the next 5 years. The 
amendment would allow those to be considered, too.

                              {time}  1315

  Another amendment prevents landlords from evicting tenants pending 
bankruptcy. The tradition of bankruptcy is that tenants have a stay of 
all proceedings and they have an opportunity to work out some 
arrangement so that they can stay in their house. This underlying bill 
allows for immediate eviction. This would retain the tradition of 
automatic stay.
  Mr. Chairman, administrative expenses, they are limited to 10 percent 
to what is being paid in. If very much is not being paid in, a debtor 
may not have a reasonable amount to hire attorneys. This would allow 
for reasonable expenses which is usually the standard that is used.
  Mr. Chairman, another amendment would deal with the assumption under 
the private school expenses. The underlying bill says private school 
expenses are paid if documentation and an explanation is provided. It 
does not say that the documentation is meaningful. A ridiculous 
explanation could be given. The amendment says that the trustee would 
determine whether expenses are reasonable and necessary, not whether an 
explanation was provided.
  Mr. Chairman, these are just some of the much-needed changes. It will 
not fix the bill totally, but it would at least make a bad bill a 
little better.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 3 minutes to the very 
distinguished gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Chairman, this is not a perfect bill, the 
underlying bill; but I think it is an important bill to pass. It is a 
bill that received the overwhelming bipartisan support of this House 
and of the Senate last year. Last year, because this bill is almost 
identical, it is relevant to recognize 96 Democrats voted for this bill 
last year. That is bipartisan. The reason that they did so was that 
they recognized that the American public wants a fair system. They want 
people to be able to get a new fresh start. They do not want a system 
that lends itself to abuse. That is basically the problem that we face 
today.
  Mr. Chairman, back in 1980 there were only about 300,000 people that 
filed for bankruptcy. In 1998, 1.4 million people filed for bankruptcy. 
That is an enormous number. Something is wrong. What is wrong is that 
it has become too easy to wipe out your debts.
  What is particularly galling is that this cost does not go away. It 
is not just limited to the bankruptcy court. We all pay for it. The 
American family today pays about $400 more per year to cover the cost 
of these bankruptcies. That is $400 that families who are paying their 
bills get stuck with that they ought not to. Approximately 100,000 
people file for bankruptcy each year who could in fact pay off their 
debt, but they are avoiding about $1 billion annually of debt that they 
could pay off that they do not because the system has not been fixed. 
That is what this bill would do. It would fix the system. It is a 
needs-based bankruptcy plan.
  Mr. Chairman, I have to tell my colleagues when there is a bill that 
is able to put child support and spousal support ahead of lawyer's 
fees, you had better get it passed immediately because once the trial 
lawyers find out that it is even ahead of lawyer's fees I do not know 
how long it will last, but we ought to do it.
  We have a debtor's bill of rights here that addresses a number of the 
problems that we have had in terms of credit cards. Some people are 
taking these credit cards in, they sign up, they max it out whatever 
they can charge. They pile debt up, and then they get themselves 
relieved from paying off their debt; and oftentimes they can go right

[[Page 2626]]

back to doing it all over again. It needs to be fixed.
  Mr. Chairman, this bill is a good, balanced, bipartisan bill to fix 
it. I think we ought to vote for the underlying bill.
  Mr. WATT of North Carolina. Mr. Chairman, would the Chair advise us 
of the time remaining on both sides.
  The CHAIRMAN pro tempore (Mr. Hood). The gentleman from North 
Carolina (Mr. Watt) has 15 minutes remaining; the gentleman from 
Wisconsin (Mr. Sensenbrenner) has 20 minutes remaining. The gentleman 
from Wisconsin has the right to close.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 3 minutes to the 
gentlewoman from California (Ms. Waters), a member of the committee.
  Ms. WATERS. Mr. Chairman, I would like to address some strong 
problems and concerns I have with the proposed legislation. As a whole, 
the general consensus has been that we need to overhaul the Bankruptcy 
Code. However, H.R. 333 does so at the expense of consumers and small 
businesses. It is overly harsh on the honest but unfortunate debtor.
  I tried to introduce an amendment which would prevent landlords from 
being able to evict domestic violence victims, elderly persons on 
limited income, and single parents with minor children on limited 
income without going through the bankruptcy court. That protection 
already exists under current law, but is absolutely removed by H.R. 
333. I was not successful with that amendment.
  Mr. Chairman, the Democratic substitute amendment which seeks to 
correct the most glaring problems with H.R. 333 deserves support, and I 
am here today to try to make a bad bill just a little bit better. The 
fifth provision of the Democratic substitute, for example, would allow 
debtors to exclude up to $1,500 for expenses for a child's schooling, 
whether those expenses are for a public or private school. The proposed 
legislation only allows for expenses from private schools. This 
discriminates against low-income debtors and has no logical rationale. 
I understand the gentlewoman from Texas (Ms. Jackson-Lee) has taken 
this up. We have had two attempts to correct this in the bill.
  Provision 12 of the Democratic substitute deals with reaffirmations. 
It would discourage creditors from entering into abusive reaffirmation 
agreements with debtors. H.R. 333 purports to protect women and 
children. However, when debtors enter into reaffirmation agreements, 
they are increasing the number of debts they must pay. Each time 
another debt is added to the list, it becomes more and more unlikely 
that child support and alimony will be paid. It does not matter that 
domestic support obligations are given first priority under this bill. 
Women and children do not have the resources to defend their rights 
over the rights of credit card companies. We should not ignore the fact 
that numerous women and children's organizations have spoken out in 
strong opposition to this bill.
  Mr. Chairman, the Democratic substitute would provide an opportunity 
for court review of proposed reaffirmations, an essential measure to 
protect from abusive reaffirmations.
  The Democratic substitute also addresses problems with medical 
expenses and health insurance premiums, exempts debtors who fall below 
the poverty line from burdensome reporting requirements, and ensures 
that governmental education loans are not placed in competition with 
higher interest rate loans from private institutions.
  Passage of this amendment is crucial if we are to avoid a crisis in 
the bankruptcy system. We must not pass a bill merely because the time 
is right; we must pass a bill when the bill is right.
  Mr. Chairman, I would like to address some strong problems and 
concerns I have with the proposed legislation as a whole. The general 
consensus has been that we need to overhaul the Bankruptcy Code. 
However, H.R. 333 does so at the expense of consumers and small 
businesses. It is overly harsh on the honest but unfortunate debtor.
  I tried to introduce an amendment that would prevent landlords from 
being able to evict domestic violence victims, elderly persons on 
limited income, and single parents with minor children on limited 
income without going through bankruptcy court. That protection already 
exists under current law, but is removed by H.R. 333.
  I was not successful with that amendment. However, I am here to 
support the Democratic Substitute amendment, which seeks to correct the 
most glaring problems with H.R. 333.
  The fifth provision of the Democratic Substitute, for example, would 
allow debtors to exclude up to $1500 for expenses for a child's 
schooling, whether those expenses are for public or private school. The 
proposed legislation only allows for expenses from private school. This 
discriminates against low-income debtors and has no logical rationale.
  Provision 12 of the Democratic Substitute deals with reaffirmations. 
It would discourage creditors from entering into abusive reaffirmation 
agreements with debtors.
  H.R. 333 purports to protect women and children. However, when 
debtors enter into reaffirmation agreements, they are increasing the 
number of debts they must pay. Each time another debt is added to the 
list, it becomes more and more unlikely that child support and alimony 
will be paid.
  It does not matter that domestic support obligations are given first 
priority under H.R. 333. Women and children do not have the resources 
to defend their rights over the rights of credit card companies. We 
should not ignore the fact that numerous women and children's 
organizations have spoken out in strong opposition to H.R. 333. The 
Democratic Substitute would provide an opportunity for court review of 
proposed reaffirmations, an essential measure to protect from abusive 
reaffirmations.
  The Democratic Substitute also addresses problems with medical 
expenses and health insurance premiums; exempts debtors who fall below 
the poverty line from burdensome reporting requirements; and ensures 
that governmental education loans are not placed in competition with 
higher-interest rate loans from private institutions. Passage of this 
amendment is crucial if we are to avoid a crisis in the bankruptcy 
system.
  We must not pass a bill merely because the time is right. We must 
pass a bill when the bill is right.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 5 minutes to the other very 
distinguished gentleman from Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Chairman, I thank my chairman for yielding me this 
time.
  Mr. Chairman, I rise today in strong support of H.R. 333, the 
Bankruptcy Abuse Prevention and Consumer Protection Act, and in strong 
opposition to this substitute amendment. This important legislation, 
which is similar to the bankruptcy reform legislation passed out of the 
House last year by a vote of 313 to 108, is an honest compromise that 
is pro-personal responsibility and antibankruptcy abuse.
  With a record high 1.4 million bankruptcy filings in 1998, every 
American must pay more for credit, goods and services when others go 
bankrupt. I worked to pass H.R. 833 last year and cosponsored H.R. 333 
this year because it is high time that we relieve consumers from the 
burden of paying for the debts of others.
  The Bankruptcy Abuse Prevention and Consumer Protection Act restores 
personal responsibility, fairness, and accountability to our bankruptcy 
laws and will be of great benefit to consumers. For too long, our 
bankruptcy laws have allowed individuals to walk away from their debts 
even though many are able to repay them. That is not fair to millions 
of hard-working families who pay their bills, mortgages, car loans, 
student loans, and credit card bills every month.
  The loopholes in our bankruptcy laws have led to a 400 percent 
increase in personal bankruptcy filings since 1980 at a cost of $40 
billion per year. These losses have been passed directly to consumers, 
costing every household that pays its bills an average of $400 in 
hidden taxes each year. In real terms, that is a year's supply of 
diapers or 20 tanks of gas.
  The bill under consideration today retains the strong income-based 
means test that will distinguish between those who need the fresh start 
available under chapter 7 and those who can afford to file under 
chapter 13, which requires a 5-year repayment plan.
  This important provision, which bases a debtor's ability to pay on 
clear

[[Page 2627]]

and well-defined standards, will give a fresh start to those who need 
it, while ensuring that those who can afford to pay back some of their 
debt do so.
  Under the current system, some irresponsible people filing for 
bankruptcy run up their credit card debt immediately prior to filing, 
knowing that their debts will soon be wiped away. These debts, however, 
do not just disappear. They are passed along to hard-working folks who 
play by the rules and pay their own bills on time.
  The Bankruptcy Abuse Prevention and Consumer Protection Act ends this 
practice by requiring bankruptcy filers to pay back nondischargeable 
debts made in the period immediately prior to their filing.
  While ending the abuses of our bankruptcy laws, the act is strongly 
pro-consumer in other ways as well. This legislation, for example, 
helps children by strengthening protections in the law that prioritize 
child support and alimony payments.
  Additionally, H.R. 333 protects consumers from bankruptcy mills that 
encourage folks to file for bankruptcy without fully informing them of 
their rights and the potential harms that bankruptcy can cause.
  This legislation also includes language that I strongly support to 
restore fairness and equity to the relationship between the U.S. 
Trustee and private-standing bankruptcy trustees. Specifically, the 
language will provide private trustees the right to seek judicial 
review in court in certain cases following an administrative hearing on 
the record of U.S. Trustee actions related to trustee expenses and 
trustee removal.
  This compromise, worked out between the U.S. Trustee's office and 
representatives of the private bankruptcy trustees, will provide 
fairness to those who dedicate themselves to their duties as private 
trustees while ensuring that the U.S. Trustee is subject to the same 
checks and balances as other government agencies.
  Mr. Chairman, bankruptcy should remain available to the folks who 
truly need it. But those who can afford to repay their debts should not 
be able to stick other folks with the tab. Enactment of this carefully 
crafted legislation will send a big signal toward those who would abuse 
our bankruptcy system that the free ride is over.
  I want to commend the gentleman from Wisconsin (Mr. Sensenbrenner), 
the chairman of the Committee on the Judiciary, for moving this 
important legislation quickly to the floor, as well as the gentleman 
from Pennsylvania (Mr. Gekas) for his outstanding work on this issue.
  I urge my colleagues to support this fair and reasonable bill and to 
oppose the Democratic substitute.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 2 minutes to the 
gentleman from New York (Mr. LaFalce).
  Mr. LaFALCE. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Mr. Chairman, this is the wrong bill at the wrong time. It is driven, 
not by the public interest, it is driven by lobbyists primarily for the 
creditor industry that exists and walks the halls of the Capitol and 
has for years and years and years.
  Most individuals who go into bankruptcy go there because they have 
lost a job, they have accumulated huge medical expenses, they have been 
through a divorce, et cetera, and for another major reason, because of 
the predatory practices of the credit industry; predatory practices 
with respect to the purchase and mortgage of one's home or a home 
equity loan; predatory practices with respect to the car that one buys 
or leases; predatory practices with respect to the credit card that one 
uses for almost everything in life today; predatory practices even with 
respect to one's virtual identity, the most personal information about 
oneself.

                              {time}  1330

  This Congress, for 6 years now, has not done a single thing about 
those predatory practices, has not even looked at them in hearings, 
refuses to take them up on the floor of the House, refuses to make 
amendments in order to rectify them; and yet our colleagues come before 
us with the bill basically drafted by the credit card industry.
  I called some friends of mine, referees in bankruptcy and asked them 
what they thought of the bill before us. Terrible. I called some 
friends of mine, attorneys for major lending institutions specializing 
in one issue and one issue only, bankruptcy; and I asked them what they 
thought of it. They said, terrible.
  This bill today in the House will pass, it will probably go before 
President Bush for his signature; but it is a terrible bill. And what 
is even more terrible is that my Republican colleagues have not even 
attempted to deal with the real problems that exist in the real world, 
the predatory practices of the credit industry.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 3\1/2\ minutes to 
the gentleman from Massachusetts (Mr. Delahunt), a member of the 
Committee on the Judiciary.
  Mr. DELAHUNT. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  I keep hearing from the proponents how the benefits of this bill will 
flow to the American people. Well, if they believe that, I have a 
bridge that I want to sell them.
  At one of our subcommittee hearings on this legislation last year I 
asked each of the panelists, and there were nine, whether the bill 
would result in lower interest rates to consumers. Every single one of 
them admitted probably not. Well, I appreciated their honesty. By the 
way, there is ample empirical evidence, hard evidence, to suggest that 
consumers will not benefit at all by this bill.
  The American people should know that in 1996, a Harvard University 
study pointed out that between 1980 and 1982 the Federal funds rate 
fell from 13.4 percent to 3.5 percent, a drop of nearly 10 percentage 
points. The average credit card interest rates went the other way. It 
rose from nearly 17.3 percent to 17.9 percent. The bottom line, the 
credit card industry will be the only beneficiary of this proposal, and 
to suggest otherwise does not hold water.
  So if my colleagues' concern is about credit card company profits, by 
all means vote for this bill. Be assured, however, if there is a 
concern that these companies are doing very well, if there are any 
doubts, pick up a copy of the January 26, 2001, edition of USA Today. 
The headline reads, and I am quoting, ``Adding fees, new ones, raising 
old ones, and credit card profits are soaring.'' Credit card industry 
profit rose to a 5-year high last year. In fact, credit cards are one 
of the most profitable businesses in banking, according to a CEO in a 
consulting firm that advises credit card issuers.
  The American people should also know that as profits rose, several 
major credit card issuers, including Chase and Providian, agreed to pay 
hefty penalties to settle complaints related to unfair late fees and 
other practices. And just this past week in Business Week, that 
liberal, liberal magazine, an article reflects how MBNA not only 
provided substantial contributions to both parties and to individual 
Members, but the MBNA credit card, which I understand is the third 
largest in the country, recently paid about $8 million for unfair 
practices and deceptive advertising.
  So given that the credit card companies will be the chief 
beneficiaries of this public subsidy, because that is exactly what it 
is, exactly what it is, it seems to me there ought to be at least a 
quid pro quo. Let us require responsible corporate behavior and 
continue the decline that we have witnessed over the past 2 years in 
bankruptcy filings, the 170,000 fewer in 2000 than existed in 1998; and 
let us support the substitute.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 1 minute to the gentleman 
from California (Mr. Royce).
  Mr. ROYCE. Mr. Chairman, the time has come for bankruptcy reform. 
This will be the third time that Congress has passed a bankruptcy 
reform bill in our effort to get this through.
  Our bankruptcy laws do play an important and necessary role in 
protecting Americans who really need them, and that is the key. That 
should

[[Page 2628]]

be the key: need. And this bill makes the existing bankruptcy system a 
needs-based system addressing the flaw in the current system that 
encourages people to file for bankruptcy and walk away from their debts 
regardless of whether they are able to repay any portion of what they 
owe. It does this while protecting those who truly need protection. 
They are exempted under the bill.
  The cost to all of us in terms of what is going on in these filings 
is great. This is a cost borne not only by the business community and 
the property owners but by the consumers who pay their bills 
responsibly. By some estimates, it takes 33 responsible consumers to 
pay for just one bankruptcy of convenience.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 2 minutes to the 
gentleman from Massachusetts (Mr. Tierney).
  Mr. TIERNEY. Mr. Chairman, I thank the gentleman for yielding me this 
time. I also thank the gentleman from Michigan (Mr. Conyers) and the 
gentleman from New York (Mr. Nadler), as well as their staffs, for 
including language on an amendment that I submitted on health care to 
this bill.
  We have heard for some time now supporters of this bill urging us to 
believe that we face a bankruptcy fraud epidemic, with an exponentially 
increasing number of debtors who, but for the fact they are in 
bankruptcy, otherwise would pay their debts. Instead we find out, as 
one study says, that some 3.6 percent of chapter 7 debtors would hardly 
be able to pay any more of their bills if bankruptcy were not an 
option. That hardly constitutes a bankruptcy fraud epidemic, as 
advocates of the bill claim. More often, filing for bankruptcy is not a 
way out for scam artists, but a critical source of relief for common 
people trapped in unfortunate, and sometimes dire, circumstances.
  Among the many egregious shortcomings of this particular bill is the 
absence of a definitive provision to allow the coverage of reasonable 
medical expenses whether a debtor does or does not have health 
insurance coverage. Certainly we all share the goal of ensuring that 
the bankruptcy system is not used as a shield for irresponsible 
spending decisions. But debt repayment should not preempt reasonable 
and necessary medical expenses. Currently, H.R. 333 in fact does that.
  The health language contained in our substitute would allow debtors 
to cover reasonable medical expenses in the event of bankruptcy. 
Without this amendment, this protection is not guaranteed. The IRS 
guidelines that form the basis for the means test in this reform 
legislation can change from year to year. Right now these guidelines 
make it possible but do not guarantee allowance of reasonable medical 
expenses. In fact, three out of four debtors cite serious medical 
problems or exorbitant health care costs as the reason for their filing 
for bankruptcy. In 1999, a half million middle-class families were 
forced into bankruptcy for these reasons alone.
  It does not make sense to deny people who have the financial 
wherewithal to pay for these medical expenses, when they should be able 
to file bankruptcy in the first place and be able to afford vital 
health care costs. This is a vital component of this bill, Mr. 
Chairman. Real bankruptcy reform should be about not eliminating 
opportunity but making sure people can stop having themselves 
financially devastated particularly because of medical problems.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 1 minute to the 
gentlewoman from California (Mrs. Davis).
  Mrs. DAVIS of California. Mr. Chairman, I rise in strong support of 
the well-fashioned Democratic alternative and to clarify also a 
mistake.
  Unfortunately, Mr. Chairman, staff inadvertently added me as a 
cosponsor rather than the correct Davis. As the chairman knows, there 
are several of us here now. I respectfully request the record show I am 
not a cosponsor.
  Mr. Chairman, I rise in strong support of the well fashioned 
Democratic alternative and to clarify my intentions with regard to H.R. 
333, the Bankruptcy Abuse Prevention and Consumer Protection Act. On 
January 31, due to a clerical error, I was added as a cosponsor to H.R. 
333. Evidently, it was intended to list my like-named colleague from 
Virginia. I was never contacted by the sponsor regarding cosponsorship 
and did not wish to do so.
  It is somewhat rare that there are more members with the name Davis--
five this term--than Smith, Lee or Jones, the usual winners.
  With that confusion behind us, I want to express my strong support 
for the Democratic alternative fashioned and sponsored by several of my 
colleagues. There is no doubt that the bankruptcy system needs reform, 
however, we must ensure that we do not handicap well-meaning members of 
our society who have fallen on hard times. Most consumers who file for 
bankruptcy are not deadbeats, but instead are working families who have 
experienced a catastrophic event such as illness, job loss, or a recent 
divorce. The Democratic alternative seeks to remove many of the 
provisions of the original bill that may hurt lower and middle income 
families who are in financial difficulty by tilting the playing field 
against working families and small businesses in favor of creditors.
  Mr. WATT of North Carolina. Would the chairman advise us of the 
amount of time remaining?
  The CHAIRMAN pro tempore (Mr. LaHood). The gentleman from North 
Carolina (Mr. Watt) has 4 minutes remaining, and the gentleman from 
Wisconsin (Mr. Sensenbrenner) has 14 minutes remaining.
  Mr. WATT of North Carolina. Mr. Chairman, I yield 3 minutes to the 
gentleman from New York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, earlier today I spoke of my general views 
on this terrible bill. I want to comment on a remark the chairman of 
the committee made during the debate on this technical amendment 
concerning language proposed by the gentleman from California (Mr. 
Schiff) and initially accepted by the majority that would protect 
legally separated spouses from having the income of their spouses 
attributed to them in calculating how much they can repay their 
creditors.
  The gentleman from California (Mr. Schiff) testified in support of 
the Sensenbrenner amendment in front of the Committee on Rules 
yesterday because of the inclusion of his language and what he thought 
was a simple clarification. In fact, his language, unknown to him, had 
been dropped from the amendment. The members of the majority on the 
Committee on Rules sat silently while he testified in favor of the 
amendment and never once disclosed to him or to any member of the 
Committee on Rules minority or the Committee on the Judiciary minority 
that in fact that language was removed from the manager's amendment.
  Now the chairman tells us the Schiff amendment is not technical or 
clarifying but is in fact a controversial and substantive change. That 
is a startling admission. Is it really his intent that a woman who has 
been abused and is now separated from her husband and is living in fear 
and poverty must still count her abuser's income as a resource to be 
given to her creditors? I can see why some people in the banking 
industry might support this, but is there a single member of the 
majority who thinks that making it clear that the victim cannot be 
charged with the income of her abuser is anything more than a 
clarification or that it in fact reflects a controversial proposition?
  If they really do think so, why did they fail at least to do the 
minority the courtesy of being honest about dropping the Schiff 
amendment rather than allowing our colleague from California to testify 
in support of the manager's amendment thinking his language was still 
included within it?
  Mr. Chairman, our substitute attempts to make this bill a little more 
humane, or a little less inhumane I should say, by softening the 
inflexible means test which the former chairman of the committee, the 
gentleman from Illinois (Mr. Hyde), objected to and attempted to change 
last year. Evidently, the IRS is more popular on the other side of the 
aisle than the rhetoric would indicate since they would put into this 
bill the IRS guidelines to determine how much a debtor can afford to 
repay, the same IRS guidelines they found too harsh and instructed the 
IRS not to use with respect to tax cheats.
  The substitute amendment drops the special interest amendment that 
benefits those wealthy investors I mentioned earlier. It makes sure the 
debtor

[[Page 2629]]

has funds to support a foster child and pay for needed medical care. It 
modifies the bill to take up provisions that were secretly inserted 
into last year's conference report without any hearings or discussion 
that would hinder business reorganizations at a time when many more 
businesses are turning to chapter 11 to stay alive and preserve jobs 
and communities. It protects the privacy of the public from having 
their personal information disclosed or resold when a company goes into 
bankruptcy.
  Earlier, we agreed to an amendment to strike the names of children 
from online bankruptcy information. We did not have hearings on that. 
We have not had hearings on most of the special interest provisions in 
this bill. Why so much interest in hearings now? I sympathize with the 
chairman, who says he was not part of the deliberations in conference 
on this bill. Neither was I, and I was a conferee.
  One last word on child support. I do not want to hear again that this 
bill makes child support the first priority. No bankruptcy practitioner 
thinks that this bill in any way benefits children. At worst it will 
hinder the administration of the case. At best, it will do nothing. In 
ch. 13, all priority debts must be paid in full. In ch. 7, 98 percent 
of all cases are zero asset cases, so priority debts are almost never 
paid. It does nothing to help women whose debts are made non-
dischargeable by this bill, and it does nothing to help them compete in 
state court if the non-custodial parents' debts to Visa survive 
bankruptcy. It does give a new and perverse meaning to the phrase, 
``women and children first.''
  I urge adoption of this amendment which will somewhat improve this 
bill. I urge adoption of the motion to instruct which would provide 
basic privacy protections for individuals in the bankruptcy system 
while we wait for the bureaucracy to get off its keister, and I urge 
rejection of this terrible bill.
  Mr. WATT of North Carolina. Mr. Chairman, I yield myself the balance 
of my time.

                              {time}  1345

  Mr. Chairman, I am not going to belabor this. I do not have time to 
belabor it any further. There are a number of us who believe that the 
bankruptcy system has been abused, but we also know that it is abused 
by people who are above the means test in this bill and people who are 
below the means test in this bill. So why would you impose an arbitrary 
means test rather than going directly for the abusers of the system? 
And if it is not about setting up an arbitrary system, then why would 
you not make an exception for those who really can show by whatever 
burden of proof you want to impose that they got into financial straits 
that result in bankruptcy by no fault of their own because that is what 
bankruptcy was always about, and that is what it should continue to be 
about.
  We have tried to, in this amendment, soften the provisions. That has 
not occurred. The charade is over. We can now go forward.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of my 
time.
  Mr. Chairman, this bill has been percolated through the Congress for 
the last 4 years. It has probably been one of the most debated, amended 
and negotiated bills that have come before the Congress of the United 
States in the last 25 years. At the end of the last Congress, 
overwhelming majorities in both Houses approved this bill. It was a 
voice vote in the House, and the vote in the other body was 70-28. I 
think that shows that the vast majority of Members of both political 
parties are happy with the compromises that have been reached as a 
result of almost 4 years of painstaking and seemingly never ending 
negotiations.
  We hear an awful lot about the fact that bankruptcy reform is 
necessary. My friends on the other side of the aisle say, yes, we 
support bankruptcy reform but not this bill. That argument to me seems 
to be that the perfect is the enemy of the good. In any legislative 
body where compromise is the rule in order to pass legislation, the 
perfect is probably never attainable. This bill is a good bill. It is a 
bill that will make a dent on the $400 that every family in this 
country who pays their bills has to pay in increased taxes, increased 
costs for goods, increased costs for services as a result of about $44 
billion a year being written off in debt and bankruptcy.
  I think probably the best statement that was made during the debate 
came early on several hours ago, where our present bankruptcy laws are 
now being used by some as a financial planning tool. Bankruptcy should 
never be an item of financial planning. What it should be is a system 
of last resort, to allow people who have gotten in over their heads in 
debts to wipe the slate clean and to have a fresh start. This bill 
takes care of most of the abuses in the present bankruptcy system. It 
is a good bill. It is one that has been vetted by practically everybody 
who has been interested in this piece of legislation. It is not a 
perfect bill. I will be the first one to admit it. But it is a 
significant improvement.
  I would urge support for this bill and opposition to this last 
amendment that goes back to some of the practices of the bad old days.
  The CHAIRMAN pro tempore (Mr. LaHood). The question is on the 
amendment offered by the gentlewoman from Texas (Ms. Jackson-Lee).
  The question was taken; and the Chairman pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. WATT of North Carolina. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, the 
Chair will reduce to 5 minutes the period of time within which a vote, 
if ordered, will be taken on amendment No. 1 offered by the gentleman 
from Wisconsin (Mr. Sensenbrenner).
  The vote was taken by electronic device, and there were--ayes 160, 
noes 258, not voting 14, as follows:

                             [Roll No. 23]

                               AYES--158

     Abercrombie
     Allen
     Andrews
     Baca
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Berkley
     Berman
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Cummings
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank
     Gephardt
     Gonzalez
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Honda
     Hooley
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lowey
     Luther
     Maloney (NY)
     Markey
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Moore
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Ramstad
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Slaughter
     Solis
     Spratt
     Stark
     Stupak
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--251

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bentsen
     Bereuter
     Berry
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cantor
     Capito
     Carson (OK)
     Castle
     Chabot
     Chambliss
     Clement
     Coble
     Collins
     Combest
     Condit
     Cooksey
     Cox
     Crane
     Crenshaw
     Crowley
     Cubin
     Culberson
     Cunningham
     Davis (FL)
     Davis, Jo Ann
     Davis, Tom
     DeLay
     DeMint
     Diaz-Balart
     Dooley
     Doolittle
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Ford
     Fossella
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Gordon

[[Page 2630]]


     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill
     Hilleary
     Hobson
     Hoekstra
     Holt
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kerns
     King (NY)
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Larsen (WA)
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Manzullo
     Matheson
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Regula
     Rehberg
     Reynolds
     Riley
     Roemer
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ross
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Sanchez
     Sandlin
     Saxton
     Scarborough
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shows
     Simmons
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Souder
     Spence
     Stearns
     Stenholm
     Strickland
     Stump
     Sununu
     Sweeney
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Traficant
     Turner
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--13

     Ackerman
     Baird
     Cannon
     Cramer
     Deal
     Inslee
     Kingston
     McDermott
     Norwood
     Ros-Lehtinen
     Rothman
     Snyder
     Toomey

                              {time}  1415

  Mrs. KELLY, Ms. GRANGER, Messrs. BASS, GOSS, SHOWS, PORTMAN, 
CUNNINGHAM, TANCREDO, GARY MILLER of California, OSE, HOLT and SMITH of 
Michigan changed their vote from ``aye'' to ``no.''
  Messrs. BLAGOJEVICH, CUMMINGS, COSTELLO and HOLDEN changed their vote 
from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated against:
  Mr. RAMSTAD. Mr. Chairman, on rollcall No. 23 I inadvertently pressed 
the ``yea'' button. I meant to vote ``no.''


              Amendment No. 1 Offered by Mr. Sensenbrenner

  The CHAIRMAN pro tempore (Mr. LaHood). The pending business is the 
demand for a recorded vote on amendment No. 1 offered by the gentleman 
from Wisconsin (Mr. Sensenbrenner) on which further proceedings were 
postponed and on which the ayes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.

                              {time}  1415

  Mr. CONYERS. Mr. Chairman, I withdraw my demand for a recorded vote.
  The CHAIRMAN pro tempore (Mr. LaHood). The demand for a recorded vote 
on amendment No. 1 is withdrawn and the amendment is adopted by the 
previous voice vote.
  So the amendment was agreed to.
  The CHAIRMAN pro tempore. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Hansen) having assumed the chair, Mr. LaHood, Chairman pro tempore of 
the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration the bill (H.R. 333) 
to amend title 11, United States Code, and for other purposes, pursuant 
to House Resolution 71, he reported the bill back to the House with 
sundry amendments adopted in the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on any amendment? If not, the Chair will 
put them en gros.
  The amendments were agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Mr. Conyers

  Mr. CONYERS. Mr. Speaker, I offer a motion to recommit the bill, H.R. 
333, with instructions.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. CONYERS. Yes, sir.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Conyers moves to recommit the bill (H.R. 333) to the 
     Committee on the Judiciary, with instructions to report the 
     bill back to the House forthwith, with the following 
     amendment.
       Page 393, strike line 16 and all that follows through page 
     403, line 3, and insert the following (and conform the table 
     of contents accordingly):

     SEC. 1301. ISSUANCE OF CREDIT CARDS TO UNDERAGE CONSUMERS.

       Section 127(c) of the Truth in Lending Act (15 U.S.C. 
     1637(c)) is amended by inserting after paragraph (6) (as 
     added by section 1303 of this title) the following new 
     paragraph:
       ``(7) Applications from underage consumers.--
       ``(A) Prohibition on issuance.--No credit card may be 
     issued to, or open end credit plan established on behalf of, 
     any consumer who has not attained the age of 21, except in 
     response to a written request or application to the card 
     issuer that meets the requirements of subparagraph (B).
       ``(B) Application requirements.--An application to open a 
     credit card account by a consumer who has not reached the age 
     of 21 as of the date of submission of the application shall 
     require--
       ``(i) the signature of the parent or guardian of the 
     consumer indicating joint liability for debts incurred by the 
     consumer in connection with the account before the consumer 
     has reached the age of 21; or
       ``(ii) submission by the consumer of financial information 
     indicating an independent means of repaying any obligation 
     arising from the proposed extension of credit in connection 
     with the account.''.

  Mr. CONYERS (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion be considered as read and printed in the 
Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Michigan (Mr. Conyers) is recognized for 5 minutes in support of the 
motion.
  Mr. CONYERS. Mr. Speaker, I offer the motion to recommit on behalf of 
myself and the gentleman from New York (Mr. LaFalce).
  Our amendment would simply prohibit the issuance of credit cards to 
persons under age 21 unless a parent acts as co-signer or the minor can 
demonstrate an independent source to pay the debt.
  Right now, our credit card companies are sending millions of credit 
card solicitations to teenagers every year with sometimes $10,000 lines 
of credit. The credit cards offer these young people free gifts, toys, 
tee shirts. It is outrageous.
  Financial troubles caused by reckless lending to teens haunt some of 
them for the rest of their lives, costing them far more when they try 
to buy a car or home or take out future loans as they become 
responsible citizens.
  So this is not about fingerpointing. It is all our moral 
responsibility, our children's, ours as parents, Congress', and yes, 
even the credit card companies, too. This is a moral responsibility 
that none of us can shirk.
  So this commonsense amendment imposes a reasonable requirement on 
credit card companies that will help our young people immeasurably.
  Mr. Speaker, I yield to the gentleman from New York (Mr. LaFalce), 
the ranking member of the Committee on Financial Services.
  Mr. LaFALCE. Mr. Speaker, I thank the gentleman for yielding to me.
  Mr. Speaker, motions to recommit are usually considered fairly 
partisan in nature, and usually there are enormous differences between 
a motion to recommit and the main bill.
  This is not partisan, and the differences are not enormous. I hope

[[Page 2631]]

Members would vote their consciences on this.
  We take the main bill, and I do not like the main bill, I think it is 
pretty bad. I think there are dozens of predatory practices of the 
credit card industry we should have dealt with and we did not.
  But there is one in particular that is particularly offensive. That 
is preying on our youth, entering into agreements with colleges where 
the colleges will get money so they can come onto campus and market to 
these youth, flooding them with credit card solicitations, $3.5 billion 
totally. I cannot tell the Members exactly how many went to our college 
students under 21.
  These students are going to gambling establishments, they are going 
into their rooms using their laptop computers, they are engaging in 
Internet gambling. They are suffering enormous stress, financial and 
emotional, and there have been suicides, dropouts from colleges, 
because the credit card industry deviated from the standards they had 
just a few years ago: that is, show sufficient income yourself, or have 
your parents sign the applications. It is as simple as that.
  That is all we do. That is all we do in this motion to recommit, say 
if one is under 21, show independent means or have your parent co-sign. 
That is the least we could do to deal with the multitudinous predatory 
practices that exist in the credit card industry.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore. The gentleman from Wisconsin (Mr. 
Sensenbrenner) is recognized for 5 minutes.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to 
recommit and ask the Members to vote no on this motion.
  This motion to recommit proposes an amendment that does not deal with 
the Bankruptcy Code whatsoever, but amends the truth-in-lending act, as 
has been described by its proponents.
  In most States of this country, including my home State of Wisconsin, 
the age of majority is 18. When one achieves the age of 18, one is 
responsible for one's contracts, one can sue and be sued, one can vote, 
and in many cases can run for and be elected to public office.
  What this amendment proposes to say is that in terms of receiving 
solicitations for credit cards and receiving applications for credit 
cards, these adults are considered children for 3 more years. What it 
does is it paints with a broad brush every 18-, 19-, and 20-year-old 
and says, ``You have to go run to your parents or show independent 
financial means before you can apply for a credit card.''
  So the good kids who would use credit responsibly and learn how to 
use credit responsibly are not able to get credit cards, just like the 
bad kids who would use credit irresponsibly.
  I would submit to each Member of the House of Representatives that we 
should not be tarring kids with this broad brush; we should not be 
telling 18-, 19-, and 20-year-olds that they are adults for every 
purpose except just this one.
  I think what we should be doing is empowering our young people and 
giving them the educational tools to make good credit decisions, rather 
than simply saying, The door is shut for you.
  Mr. Speaker, I yield to the gentleman from Ohio (Mr. Oxley).
  Mr. OXLEY. I thank the gentleman for yielding.
  Mr. Speaker, I also rise in opposition to the motion.
  First let me associate myself with the remarks of the gentleman from 
Wisconsin, the chairman of the Committee on the Judiciary. As chairman 
of the Committee on Financial Services, I find some of the same 
concerns that the gentleman from Wisconsin has. We are again talking 
about people who are of legal age, 18.
  I thought it was interesting that the title is, issuance of credit 
cards to underage consumers. By whose definition are they under age? By 
Federal law, they can vote. By most State laws, as the gentleman from 
Wisconsin (Mr. Sensenbrenner) indicated, they can engage in contracts.
  These are, for the most part, responsible people. We are really 
dealing here with stereotypes that are unfortunate because many of 
these people are responsible and treat credit in a responsible way, and 
they learn from their experience.
  In Ohio, we had a young fellow just elected to the Ohio General 
Assembly just out of high school; he was 18 years old, a member of the 
Ohio General Assembly. Can Members imagine if he wanted to get a credit 
card to use, he would have to get his parents' consent. Here is a 
person who was duly elected by the people of Ohio to serve in the 
General Assembly.
  This is I think a well-meaning amendment, but certainly wrongly 
directed. I would ask that the motion be defeated.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. CONYERS. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of final passage.
  The vote was taken by electronic device, and there were--ayes 165, 
noes 253, not voting 14, as follows:

                             [Roll No. 24]

                               AYES--165

     Abercrombie
     Allen
     Andrews
     Baca
     Baldacci
     Barcia
     Becerra
     Berkley
     Berman
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doyle
     Duncan
     Edwards
     Emerson
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank
     Frost
     Gonzalez
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lowey
     Luther
     Maloney (NY)
     Markey
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Roemer
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Slaughter
     Solis
     Stark
     Strickland
     Stupak
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Weldon (PA)
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--253

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Baldwin
     Ballenger
     Barr
     Barrett
     Bartlett
     Barton
     Bass
     Bentsen
     Bereuter
     Berry
     Biggert
     Bilirakis
     Bishop
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carson (OK)
     Castle
     Chabot
     Chambliss
     Clement
     Coble
     Collins
     Combest
     Condit
     Cooksey
     Cox
     Crane
     Crenshaw
     Crowley
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     DeLay
     DeMint
     Diaz-Balart
     Dooley
     Doolittle
     Dreier
     Ehlers
     Ehrlich
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Ford
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood

[[Page 2632]]


     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Harman
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hinojosa
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kerns
     Kind (WI)
     King (NY)
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Larsen (WA)
     Latham
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Manzullo
     Matheson
     McCrery
     McHugh
     McInnis
     McKeon
     Menendez
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rivers
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ross
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Sanchez
     Sandlin
     Saxton
     Scarborough
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shows
     Simmons
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Souder
     Spence
     Spratt
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Traficant
     Turner
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--14

     Ackerman
     Baird
     Cramer
     Deal
     Dunn
     Gephardt
     Inslee
     Kingston
     McDermott
     Norwood
     Ros-Lehtinen
     Rothman
     Snyder
     Toomey

                              {time}  1449

  Messrs. Horn, McCrery and Regula changed their vote from ``aye'' to 
``no.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Hansen). The question is on the passage 
of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 306, 
nays 108, not voting 18, as follows:

                             [Roll No. 25]

                               YEAS--306

     Aderholt
     Akin
     Andrews
     Armey
     Baca
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Bartlett
     Barton
     Bass
     Bentsen
     Bereuter
     Berkley
     Berry
     Biggert
     Bilirakis
     Bishop
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Brown (FL)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Capps
     Carson (OK)
     Castle
     Chabot
     Chambliss
     Clement
     Clyburn
     Coble
     Collins
     Combest
     Condit
     Cooksey
     Costello
     Cox
     Crane
     Crenshaw
     Crowley
     Cubin
     Culberson
     Cunningham
     Davis (FL)
     Davis, Jo Ann
     Davis, Tom
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dicks
     Dooley
     Doolittle
     Dreier
     Duncan
     Edwards
     Ehlers
     Ehrlich
     Emerson
     English
     Etheridge
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Ford
     Fossella
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Graves
     Green (TX)
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Harman
     Hart
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill
     Hilleary
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Israel
     Issa
     Istook
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson (IL)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kerns
     Kind (WI)
     King (NY)
     Kirk
     Kleczka
     Knollenberg
     Kolbe
     LaHood
     Lampson
     Langevin
     Largent
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Manzullo
     Matheson
     McCarthy (MO)
     McCarthy (NY)
     McCrery
     McHugh
     McInnis
     McIntyre
     McKeon
     Meek (FL)
     Meeks (NY)
     Menendez
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Nussle
     Ortiz
     Osborne
     Ose
     Otter
     Oxley
     Pallone
     Pascrell
     Pastor
     Paul
     Pence
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pitts
     Platts
     Pombo
     Pomeroy
     Portman
     Price (NC)
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reyes
     Reynolds
     Riley
     Rivers
     Roemer
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ross
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Sandlin
     Saxton
     Scarborough
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Simmons
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Solis
     Souder
     Spence
     Spratt
     Stearns
     Stenholm
     Strickland
     Stump
     Sununu
     Sweeney
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Traficant
     Turner
     Upton
     Velazquez
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Wu
     Wynn
     Young (AK)
     Young (FL)

                               NAYS--108

     Abercrombie
     Allen
     Baldacci
     Baldwin
     Barrett
     Becerra
     Berman
     Blagojevich
     Bonior
     Borski
     Brady (PA)
     Brown (OH)
     Capuano
     Cardin
     Carson (IN)
     Clay
     Clayton
     Conyers
     Coyne
     Cummings
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dingell
     Doggett
     Doyle
     Engel
     Eshoo
     Evans
     Farr
     Fattah
     Filner
     Frank
     Gutierrez
     Hall (OH)
     Hilliard
     Hinchey
     Hoeffel
     Honda
     Jackson-Lee (TX)
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kucinich
     LaFalce
     Lantos
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Luther
     Maloney (NY)
     Markey
     Mascara
     Matsui
     McCollum
     McGovern
     McKinney
     McNulty
     Meehan
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Owens
     Payne
     Pelosi
     Rahall
     Rangel
     Rodriguez
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Slaughter
     Stark
     Stupak
     Thompson (MS)
     Thurman
     Tierney
     Udall (CO)
     Udall (NM)
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey

                             NOT VOTING--18

     Ackerman
     Baird
     Cramer
     Deal
     Dunn
     Gephardt
     Gilman
     Inslee
     Jackson (IL)
     Kingston
     McDermott
     Norwood
     Peterson (MN)
     Ros-Lehtinen
     Rothman
     Snyder
     Toomey
     Towns

                              {time}  1457

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. GILMAN. Mr. Speaker, earlier today, I was unavoidably delayed by 
official business during the vote on final passage for H.R. 333. 
Accordingly, I was unable to vote on rollcall No. 25. If I had been 
present I would have voted ``yea.''
  Mr. KINGSTON. Mr. Speaker, regrettably, I was unable to be in 
Washington on March 1, 2001 to cast a vote on H.R. 333, The Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2001, when it came to 
the House floor. At President Bush's request, I was attending an event 
in my home state of Georgia with the President. Had I been here, 
however, I would have voted in favor of the Bankruptcy Reform bill.

                          ____________________