[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[House]
[Pages 548-625]
[From the U.S. Government Publishing Office, www.gpo.gov]




    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2003

  The SPEAKER pro tempore (Mr. Sessions). Pursuant to House Resolution 
503 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 
Senate bill, S. 1920.

                              {time}  1343


                     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 
Senate bill (S. 1920) to extend for 6 months the period for which 
chapter 12 of title 11 of the United States Code is reenacted, with Mr. 
LaHood in the chair.
  The Clerk read the title of the Senate bill.
  The CHAIRMAN. Pursuant to the rule, the Senate bill is considered as 
having been read the first time.
  Under the rule, the gentleman from Wisconsin (Mr. Sensenbrenner) and 
the gentleman from North Carolina (Mr. Watt) each will control 30 
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, the amendment in the nature of a substitute to S. 1920 
made in order by the rule replaces the text of that bill with the text 
of H.R. 975, the bankruptcy bill passed by the House by an overwhelming 
bipartisan vote of 315-113 on March 19, 2003.
  The administration has without qualification endorsed this 
legislation. Nevertheless, this bill has languished in the other body 
now for almost a year. The question that has been asked is, why are we 
engaged in what admittedly may appear to be a redundant undertaking? 
While the other body is often described as the saucer in which the 
coffee cools, H.R. 975 has become nearly frozen in that proverbial 
saucer.

                              {time}  1345

  Today I seek to reignite congressional consideration of bankruptcy 
reform.
  Some of my colleagues may also ask, ``Why now? What's the rush?'' 
There are many answers. A major reason is that the current bankruptcy 
system is broken, and it gets worse every day that we fail to act. 
Bankruptcy filings continue to break record after record, straining the 
system's resources. The proliferation of bankruptcy filings is not just 
a temporary event, but part of a consistent upward trend. In 4 years, 
the number of bankruptcy filings has jumped by 150 percent to nearly 
1.7 million cases as of fiscal year 2003.
  Another reason has to do with the growing extent of fraud and abuse 
in the current bankruptcy system. Bankruptcy relief should be available 
to honest debtors, but current law allows, if not encourages, dishonest 
debtors to file abusive bankruptcies that overburden the system. 
According to the Justice Department, bankruptcy fraud and abuse is 
``serious and far-reaching.''
  While some debtors fraudulently conceal assets, others try to 
discharge debt despite their ability to repay their obligations. The 
current system is overburdened and ill equipped to aggressively detect 
and deter identity theft and other basic forms of bankruptcy fraud, let 
alone more creative schemes such as the so-called ``credit card bust-
outs.'' The Justice Department reports that debtors are obtaining 
credit cards despite having little or no income, incurring huge debts, 
paying those debts with worthless checks, and then filing for 
bankruptcy relief to discharge their massive liabilities. We need to 
give our law enforcement agencies and the judiciary the tools necessary 
to fight fraud and abuse in the bankruptcy system.
  A third reason, I admit, has to do with money. According to some 
analyses, the increase in consumer bankruptcy filings has significant 
adverse financial consequences for our Nation's economy and the 
economic well-being of our citizens. For instance, it has been 
estimated that in 1997 alone, more than $40 billion of debt was 
discharged as a result of bankruptcy cases. These losses, according to 
one estimate, translate into a $400 annual ``tax'' on every household 
in our Nation in the form of higher prices and higher interest rates. 
For the sake of our family farmers, we ought to relieve them of this 
$400 tax so that they can do a better job in producing food and fiber 
for our Nation's tables as well as for export.
  More importantly, there are moral reasons for supporting the need for 
bankruptcy reform. The current system allows deadbeat parents to use 
bankruptcy to avoid their child support obligations. Likewise, it 
permits corporate criminals to use bankruptcy to shield their mansions 
from the claims of those whom they have defrauded.
  Let me be perfectly clear. If this bill is voted down in the 
substitute amendment that has been made in order by the Committee on 
Rules, deadbeat parents will have a better opportunity to use 
bankruptcy to escape their court-ordered child support enforcement 
obligations. That means that the people who are opposing this move are 
giving these deadbeat parents a get-out-of-obligation-free card so that 
they can stiff their custodial former spouses. We plug that loophole.
  Furthermore, this bill plugs the so-called ``homestead exemption'' 
that has allowed corporate criminals to be able to use bankruptcy to 
shield their assets and huge mansions in the States that have unlimited 
homestead exemptions from bankruptcy and leave employees in the lurch, 
employees that could use those assets to be able to allow them to find 
new jobs as a result of a corporation going bankrupt as a result of 
executive and management abuse.
  Perhaps among the most important reasons to support bankruptcy reform 
is that it will help some of the most needy and deserving members of 
our society. As the title of the bill indicates, these reforms are not 
just about preventing abuse, but they also provide long overdue 
consumer protections. For example, domestic support claimants will 
receive very much-needed, special protections under this legislation. 
These reforms will ensure that families with pensions and education 
IRAs will not have to use these assets to pay creditors. Those 
protections will not be there if this bill is voted down.
  As part of their monthly credit card billing statements, consumers 
will be given more meaningful disclosures about the consequences of 
making minimum monthly payments. It will require the appointment of an 
ombudsman to serve as a watchdog for patients in health care facilities 
in bankruptcy. It more than doubles employee priority wage claims.
  If this bill is voted down, those that vote ``no'' turn their back on 
all of

[[Page 549]]

these improvements. These are just a few examples of the many benefits 
that consumers will finally be able to enjoy once bankruptcy reforms 
are enacted.
  I urge my colleagues to move forward with bankruptcy reform. This is 
a comprehensive bill. It is a good bill. It does not hurt the ability 
of somebody who is truly down and out to be able to file for bankruptcy 
and get their discharge and start anew. But what it will do is plug the 
loophole of those who wish to use the Bankruptcy Code as a financial 
planning tool, a financial planning tool that ends up stiffing every 
family that pays their bills on time and, as agreed upon, $400 a year 
in a hidden tax. That is a hidden tax that the lack of bankruptcy 
reform has stuck on all of our constituents who ought to be our special 
interest.
  I urge my colleagues to support the enactment of the amendment in the 
nature of a substitute to S. 1920.
  Mr. Chairman, I reserve the balance of my time.
  Mr. WATT. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, let me begin by offering my unequivocal support for S. 
1920 that would provide for an extension of chapter 12 of the 
Bankruptcy Code which expired last December. That piece of legislation 
is noncontroversial and necessary to ensure that the farmers in our 
country have access to the bankruptcy protections they so earnestly 
deserve as they struggle to keep our food supply thriving and to 
maintain their farms.
  As ranking member of the Subcommittee on Commercial and 
Administrative Law and a former conferee on H.R. 975, I continue to 
oppose the substance of H.R. 975 and further believe that the current 
maneuver to force the hand of the Senate is irresponsible and will only 
result in further delay in extending the family farmer protections 
everyone agrees should be extended.
  The gentleman from Wisconsin's amendment tacks on to this otherwise 
noncontroversial bill H.R. 975, the product of a conference on which I 
served last term minus the negotiated provision that would prevent 
those who commit acts of violence against women and abortion clinics 
from avoiding penalties by declaring bankruptcy. This bill did not pass 
last year, and I believe it will meet the same fate this year. 
Therefore, the only result will be that the family farmer will be held 
hostage to efforts to leverage support for the larger bankruptcy 
reform.
  My opposition to H.R. 975 has not changed. I believe that the omnibus 
bankruptcy reform bill is an unfortunate convergence of expedience and 
politics. There obviously is abuse in the bankruptcy system and reform 
is necessary, but I continue to believe that H.R. 975 is not a rational 
way to respond to abuse to set up a separate set of rules for what is, 
in effect, a pauper's bankruptcy court system and a different set of 
rules for a higher income bankruptcy court system.
  Mr. Chairman, I believe that we should stop playing games with the 
family farmer. Like the National Farmers Union, and I quote from their 
letter to the House leadership, I ``reject this legislative strategy as 
an insensitive, cruel and malicious effort that will only serve to 
increase the level of distress of farm families who are already 
experiencing severe financial difficulties.'' I urge my colleagues to 
vote against this bill and for a process that will respect the plight 
of the farmers of this country.
  In response to the comments of the gentleman from Wisconsin, let me 
submit to this body that the primary reason we have an increasing 
number of bankruptcies, although there may be some abuse and I do not 
argue with that, but the primary reason we are having an increase in 
the number of bankruptcies in this country is job loss and economics 
which is being driven by this administration.
  Second, I want to know how many times the House has to beat itself on 
the chest on this issue and try to force this issue. We have got a bill 
that is already in conference, I thought, in the other body; and this 
bill, if the Senate wanted to take it up, would take it up. So what are 
we doing beating our chests again this year saying we support 
bankruptcy reform?
  And finally, I would just submit that this is an effort to find 
someone to blame for the failure to pass the bankruptcy reform 
legislation. The last time I checked, the Republicans were in control 
of the House, the Republicans were in control of the Senate, the 
Republicans were in control of the Presidency. It would seem to me, if 
you are in control of this process and you want to pass the bankruptcy 
reform bill, you would pass the bankruptcy reform bill and we would not 
be here going through this charade, blaming it on somebody else for 
failure to pass this bill. It is a convenient way to blame others, but 
it is a terrible way to do business.

                                       National Farmers Union,

                                                 January 23, 2004.
     Hon. Dennis J. Hastert,
     Speaker, House of Representatives, Washington, DC.
     Hon. Nancy Pelosi,
     Democratic Leader, House of Representatives, Washington, DC.
       Dear Speaker Hastert and Democratic Leader Pelosi: On 
     behalf of the family farmer and rancher members of the 
     National Farmers Union I write to encourage the House of 
     Representatives to immediately adopt the language contained 
     in S. 1920 which passed the Senate late last year and 
     extended the chapter 12 provisions of title 11 of the United 
     States Code for an additional six months retroactive to 
     January 1, 2004.
       The Chapter 12 provisions, which allow the development of 
     alternative financial reorganization plans for farmers and 
     ranchers within the bankruptcy code, expired at the end of 
     2003 when the House failed to take action on the Senate bill 
     even though these provisions have been considered non-
     controversial by both parties over the course of several 
     years. Any delay in approving an extension of Chapter 12 
     places agricultural producers and their families who are 
     faced with bankruptcy in a serious and untenable position.
       We understand there are some in Congress who wish to 
     utilize the extension of the agriculture provisions as a 
     means to leverage support for a broader bankruptcy reform 
     measure that contains highly controversial and divisive 
     provisions unrelated to the farm bankruptcy law. We reject 
     this legislative strategy as an insensitive, cruel and 
     malicious effort that will only serve to increase the level 
     of distress of farm families who are already experiencing 
     severe financial difficulties.
       Thank you for your attention to this important issue.
           Sincerely,
                                            David J. Frederickson,
                                                        President.

  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  There have been times when I have been the chairman of the committee 
where we have given the other body a choice. I seem to recall that in 
the last Congress the House passed two versions of the visa and border 
security bill. One contained provisions extending section 245(i) of the 
Immigration and Nationality Act and one did not, and the Senate chose 
to take up the bill that did not contain section 245(i) and passed it. 
Both bills, I believe, were supported both by the gentleman from North 
Carolina and myself. So sometimes giving the other body a choice speeds 
things along, and that is what this bill proposes to do.
  Mr. Chairman, I yield 1 minute to the gentlewoman from Tennessee 
(Mrs. Blackburn).
  Mrs. BLACKBURN. Mr. Chairman, I would like to rise in support of the 
amendment and to commend the chairman of the Committee on the Judiciary 
for offering this important amendment.
  As we have noted, last March this body did pass important bankruptcy 
reform; and that is very important to my folks in Tennessee, but 
unfortunately it has languished over on the Senate side. I have heard 
from credit unions and banks in Tennessee. Their message is very clear. 
Bankruptcy is all too often used as the first resort instead of the 
last resort, and this makes it increasingly difficult for them to 
operate in a State where small business is our major employer. As the 
number of bankruptcy filings continues to rise, bankruptcy losses have 
a heavier impact upon those credit union members and on the banks who 
are fiscally responsible. What we have seen since 1998 when 
bankruptcies topped 1 million in their filings, they are up over 150 
percent. We know the trend is continuing upward.

[[Page 550]]

  I do feel this amendment is a compassionate one. People who seek 
bankruptcy because of job loss, medical problems, divorce and other 
personal problems will be unaffected.
  Mr. Chairman, it is time for us to move forward.


                      Announcement by the Chairman

  The CHAIRMAN. Members are reminded not to criticize the Senate.

                              {time}  1400

  Mr. WATT. Mr. Chairman, I yield 4 minutes to the gentleman from New 
York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, I rise to plead for our Nation's family 
farmers and family fishing operations. And some people may ask why the 
representative from Manhattan and Brooklyn is rising to plead for 
family farmers. When I was a child, we had a family farm which we lost 
to foreclosure because of policies similar to what the majority party 
is urging on us today. This is the 11th time we have been here to 
debate a temporary extension of chapter 12. To string farmers along, 
especially in these very hard times, is simply unconscionable; but this 
is even worse. Instead of passing this bill last year, the chapter 12 
extension bill, when we could have sent it directly to the President, 
the majority refused to act and allow chapter 12 to sunset. Even now 
they refuse to act and instead are using family farmers again to try to 
pass an overall bankruptcy bill that is not going to pass again because 
the Senate will not go along with it; so they are just using it as a 
charade and putting at risk all the farmers. But a bill that should not 
pass anyway. A bill whose main and essentially only effect is to enable 
the big banks and the credit card companies to reach their hands into 
the pockets of low- and middle-income people who, because usually of 
either a divorce or being laid off from their jobs or health emergency, 
are in bankruptcy and at that time to enable the big banks and the 
credit card companies to put their hands into these low- and middle-
income pockets and take more money out of it for the big banks and the 
credit card companies in 60 or 70 different ways. That is what this 
bill does. And this bill is a lot more important, the majority would 
have us believe, than extending chapter 12 for the benefits of family 
farmers and family fishing operators.
  Even if we pass this bill as amended by putting on the entire 
bankruptcy reform bill, so-called, on the back of the chapter 12 
extension, and even if the Senate agrees to allow the House to 
circumvent them entirely, family farmers would still have to sit and 
wait while Congress fiddles.
  We do have another choice. We could reject this maneuver entirely and 
send the 6-month extension to the President today. We could adopt the 
gentlewoman from Wisconsin's (Ms. Baldwin) substitute and enact a part 
of this bill that is both uncontroversial and necessary immediately to 
make chapter 12 permanent and update it to provide needed relief. But 
the Republican leadership appears unwilling to do either. They appear 
intent on using the plight of family farmers yet again to advance the 
agenda of the credit industry and to do so by threatening and hurting 
the family farmers by engaging in a legislative maneuver that has 
already resulted in chapter 12's expiring and that they know will now 
result in its being allowed to lapse further.
  This is simply wrong. I urge my colleagues to reject this outrageous 
stunt. This bill has been on the verge of passing ``any minute'' since 
1997. How much longer must our farmers and fishermen and women wait? 
They have waited long enough. I urge my colleagues to support the 
gentlewoman from Wisconsin and save our family farms and stop using the 
plight of the family farmers to try to put the entire agenda of the 
banks and the credit card companies on the backs of the family farmers. 
Pass a family farm bill; then bring in a bankruptcy bill. We will 
debate it on the merits or demerits of that, I would say the demerits; 
but stop trying to put that entire burden on the family farmers' backs 
because their backs are already broken.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 5 minutes to the gentleman 
from Alabama (Mr. Bachus).
  Mr. BACHUS. Mr. Chairman, I thank the chairman for yielding me this 
time.
  Mr. Chairman, I rise in strong support of this bill and would urge 
this body to adopt it. I would like to adopt the words of Edith Jones, 
who served on the Bankruptcy Commission and is on the Fifth Circuit 
Court of Appeals, when she said ``bankruptcy reform legislation is 
essential to restoring integrity to personal and business bankruptcies, 
redressing the imbalances and opportunities for manipulation that 
plague current law, and encouraging individual responsibility in 
financial affairs.'' However, and I say this to the gentleman from 
Wisconsin (Chairman Sensenbrenner), he has done an outstanding job on 
this legislation. It is very much a thankless job, and it is with some 
hesitancy that I rise simply to point out one provision that I share 
with Judge Jones when she says, however, ``Section 414, in removing 
investment bankers from a rigorous standard of disinterestedness, is 
out of character with the rest of this important legislation and should 
be eliminated.''
  Section 414 of the present legislation, I think, is a large snake. It 
is the proverbial fox in the henhouse. And what section 414 does is it 
eliminates the disinterested rule. That rule has existed in bankruptcy 
law for 66 years. Under current law, a person that advises the trustee 
must be ``disinterested'' in order to avoid conflicts of interest. 
Section 414 eliminates that exclusion. Consequently, section 414 would 
allow the same entities that may be engaged in negligence or even fraud 
prior to bankruptcy to advise the trustee during the bankruptcy 
process.
  Our experience alone with the recent wave of corporate scandals means 
that we need to carefully examine any provision that would weaken the 
conflict of interest standards. Weakening those standards in the 
bankruptcy code promotes conflicts of interest rather than corporate 
reform.
  Let me quote the Wall Street Journal addressing this section 414: 
``Relaxing the disinterestedness rules will serve to reward firms that 
had some part of the company's demise . . . By allowing firms that 
helped the company into bankruptcy continue to stay on the payroll, the 
firms are being rewarded for essentially failing at the task for which 
they were hired.''
  Eliot Spitzer has testified against section 414. He says, ``The 
inherent conflict of interest created by section 414 and the perverse 
incentives created by such a section ought to be clear to all,'' and I 
would agree with him. And here we have the Attorney General of New York 
and we have the very conservative Judge Jones agreeing on this point, 
as did almost all the bankruptcy commissioners.
  No convincing case has been made for drastically weakening the 
current standard as section 414 does. Indeed, one would be hard pressed 
to offer any public policy rationale for this change. As Judge Jones 
said, section 414 is totally out of character with the rest of this 
important legislation. And I include a copy of her letter.
  Let me conclude by saying that section 414, which is contrary to the 
legislation's goal of creating a fair and more streamlined bankruptcy 
system, must be addressed at conference. Nonetheless, I strongly 
support this much-needed bankruptcy reform legislation which will limit 
abuses of the bankruptcy system without affecting bankruptcy protection 
to all who truly need it.

                          U.S. Court of Appeals Fifth Circuit,

                                                   March 11, 2003.
     Hon. F. James Sensenbrenner, Jr.,
     Chairman, House Committee on the Judiciary, Rayburn House 
         Office Building, Washington, DC.
       Dear Mr. Chairman: I understand that the House Committee on 
     the Judiciary will consider H.R. 975, bankruptcy reform 
     legislation, on the morning of March 11, 2003. I also 
     understand that the Committee may consider whether or not to 
     retain Section 414 of the bill, which would amend the 
     ``disinterested person'' standard codified at 11 U.S.C. 
     Sec. 101(14). As a former member of the National Bankruptcy 
     Review Commission and, in that capacity, a consistent 
     advocate of maintaining strict disinterestedness standards 
     for bankruptcy professionals, I urge the Committee not to 
     change existing

[[Page 551]]

     law. I support Congressman Bachus's effort to remove Section 
     414.
       The National Bankruptcy Review Commission was asked to 
     recommend a modification of the disinterestedness standard in 
     order to accommodate, as I recall, the geographic growth and 
     increasing sophistication of professional firms of all kinds 
     involved in Chapter 11 bankruptcy practice. Despite fervent 
     lobbying by prominent bankruptcy professionals and scholars, 
     the Commission resisted making such a recommendation. We 
     voted (by a lopsided majority, I believe) to retain the 
     standard as it has existed since the 1930's.
       The Commission report cites two reasons for retaining a 
     strict prophylactic standard for all bankruptcy 
     professionals. These are worth brief restatement. First, such 
     a standard can alone protect integrity in the bankruptcy 
     process. If professionals who have previously been associated 
     with the debtor continue to work for the debtor during a 
     bankruptcy case, they will often be subject to conflicting 
     loyalties that undermine their foremost fiduciary duty to the 
     creditors. Strict disinterestedness, required by current law, 
     eliminates such conflicts or potential conflicts.
       Second, enforcing a strict standard of disinterestedness is 
     necessary to maintain public confidence in the integrity of 
     the bankruptcy system. A bankruptcy case should not be 
     subject to the criticism that professional fees are generated 
     to no purpose or for a bad purpose such as delay. The courts' 
     efforts to ensure that fees remain reasonable are enhanced 
     when, because of the complete disinterestedness of 
     participating professionals, no hidden motives may be imputed 
     to the actors in the case.
       One need not focus solely on today's high-profile 
     bankruptcy cases to realize that the challenge of maintaining 
     disinterested professional services has permeated modern 
     corporate reorganization law. The Commission, for instance, 
     voted to retain the original standard in the wake of the 
     criminal conviction of a prominent bankruptcy lawyer and 
     several well-known instances in which law firms were required 
     to disgorge part of their fees--all for violating 
     disinterestedness standards. Given the ongoing nature of the 
     problem, I do not see how any professional group can 
     advocate, consistent with the public interest, eliminating 
     the statutory requirement of disinterestedness. Moreover, as 
     it appears likely that many future complex bankruptcy cases 
     will arise in which the role of investment bankers will have 
     to be explored, it seems particularly unwise to grant that 
     group--alone among bankruptcy professionals--a status 
     insulated from the strict disinterestedness requirement.
       Since the close of the Commission's work in October 1997, I 
     have been a proponent of the bankruptcy reform legislation 
     that has been repeatedly passed by Congress. I still believe 
     the bankruptcy reform legislation is essential to restoring 
     integrity to personal and business bankruptcies, redressing 
     the imbalances and opportunities for manipulation that plague 
     current law, and encouraging individual responsibility in 
     financial affairs. Section 414, in removing investment 
     bankers from a rigorous standard of disinterestedness, is out 
     of character with the rest of this important legislation, 
     however, and it should be eliminated.
           Very truly yours,
                                                   Edith H. Jones.

  Mr. WATT. Mr. Chairman, I yield myself 30 seconds.
  I am a little perplexed by the gentleman's statement. He was yielded 
4 minutes. He took 3 minutes and 50 seconds to talk about the problems 
with the bill and 10 seconds to praise the bill; yet he is going to 
support it. If there is no public policy justification for this 
provision, it seems to me that the gentleman would be voting against 
this bill.
  Mr. Chairman, I yield 4 minutes to the gentlewoman from the District 
of Columbia (Ms. Norton).
  Ms. NORTON. Mr. Chairman, I thank the gentleman for yielding me this 
time, and I want to thank the chairman and all who have worked so hard 
on this bill and have been delayed for so long.
  I rise to take strong exception to putting this bill once again in 
jeopardy by reinserting anti-choice language, language that was agreed 
upon in a bipartisan fashion and that again would put this bill in 
jeopardy.
  As I understand the anti-choice movement, and I respect them for the 
view which I believe is sincere, the movement disavows violence. Each 
and every time there is violence in their name, the movement is clear 
that violence shall not occur in their name. And not only do I not have 
any reason to doubt them, I have every reason to believe they are 
sincere.
  Why in the world then would we want to take out the bipartisan Hatch-
Schumer language that was agreed upon and do so unilaterally? After 
all, the point of this bill is to remedy the abuse of the bankruptcy 
laws. Is it not an abuse to avoid a lawful judgment of a court of law 
rendered through imposition of fines after finding that a party had, 
for example, committed violence? Would anybody condone going into 
bankruptcy in order to avoid that lawful judgment? I see no reason why 
anybody would want to sign up for that, much less jeopardize this bill.
  Mr. Chairman, I just want to say at the beginning of this session we 
have gotten to the point where bipartisan compromise does not matter 
anymore in this House. We know conference reports do not matter. We 
know that Democrats did not even get to conference. But the notion that 
Mr. Schumer and Mr. Hatch could reach a compromise on something as 
controversial in its underlying content as choice and then have that 
torn up by the House should be unthinkable. I do not think Mr. Hatch 
would have agreed to it, and as I understood it, the gentleman from 
Illinois (Mr. Hyde) agreed to it, that it was a kind of compromise. The 
gentleman from Wisconsin (Mr. Sensenbrenner), all of them agreed that 
this was what should be done to get the bill through. Why throw it in 
their face and in our face by taking that compromise out of the bill? 
This used to be known as breaking one's word; and one thing I thought 
good politicians, let alone ethical men and women, never did was to 
break their word. This is a breaking of the word. I ask them to 
reconsider. Please let us begin this session, 2004, bright. Let us not 
go back to the bad old days of 2003.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentlewoman 
from Pennsylvania (Ms. Hart).
  Ms. HART. Mr. Chairman, I thank the gentleman from Wisconsin 
(Chairman Sensenbrenner) for his patience with trying to get this 
bankruptcy legislation through in a form that can be supported across 
the board and in fact in a form where it deals with the issue of 
bankruptcy. The Congress has been working on this legislation for a 
number of years, actually since before I got here; and this passage of 
this bill is long overdue.
  Since Congress began working on this legislation, bankruptcy filings 
continue to rise. In fact, data recently released by the Administrative 
Office of United States Courts showed personal bankruptcies continued 
to rise at a record-setting pace of 7.4 percent last year.
  Some of this is necessary. Some of this is abuse of the bankruptcy 
system. It has had a negative impact on our economy, amounting to a 
loss of $110 million a day. The abuse of the bankruptcy code continues 
with opportunistic filings and abusive loopholes in the code. One most 
notable, as I serve on the Committee on Financial Services, dealing 
with corporate crooks, this bill closes the mansion loophole for greedy 
corporate culprits.

                              {time}  1415

  Under current bankruptcy law, debtors living in certain States can 
shield from their creditors virtually all of the equity in their homes. 
That includes a $3 million estate.
  Congress spent a considerable amount of time discussing the issue of 
corporate responsibility, and this bill closes that loophole to 
continue the work we began last year. Some debtors have moved to 
particular States in order to take advantage of this loophole. This 
bill closes the loophole. It requires those debtors to reside in the 
State for at least 2 years before they can claim a homestead exemption; 
they have to have owned that home for at least 40 months; and most 
importantly, it caps the amount at $125,000, a reasonable amount for a 
family to keep a roof over their heads, but certainly not $3 million 
that they can just save from their prosecution.
  This legislation also helps women and children in bankruptcy. It 
prioritizes the collection and payment of spousal and child support, 
giving them the highest payment priority under the bankruptcy law. The 
legislation also allows child and domestic violence proceedings to 
continue, notwithstanding the debtor's filing for bankruptcy 
protection.
  Mr. Chairman, it is crazy for us not to move this bill at our, 
finally, hopefully, last opportunity.

[[Page 552]]


  Mr. WATT. Mr. Chairman, I yield 5 minutes to the gentleman from 
Michigan (Mr. Conyers) the ranking member of Committee on the 
Judiciary.
  Mr. CONYERS. Mr. Chairman, I thank the gentleman from North Carolina, 
the manager of the bill, and I rise and take this time not to go over a 
piece of legislation that has been around here since 1997, started in 
1996 with a commission, has been up and down and around, and here we 
are today taking the bill up yet another time.
  Well, is it sufficient that 35 national organizations, civil rights 
groups, unions, public interest research groups, consumer 
organizations, women's organizations, law organizations, the 
Neighborhood Assistance Corporation, Legal Defense and Education Fund, 
34 organizations, I would appreciate it if anybody could tell me why 
they think all of these organizations do not get the picture, do not 
understand why this bill should be rejected yet another time?
  But my emphasis this evening is upon the parliamentary process by 
which the bankruptcy bill was brought to the floor today, and that is 
to say that the bill is being brought to a conference and the Senate 
has never passed this bill. This bill is being brought on the sham of a 
Chapter 12, 6-month, noncontroversial extension entitled ``The Debts of 
the Family Farmer,'' and that is being used to force a several-hundred-
page bill into conference.
  The Senate has not acted. It is shameful that the leadership, the 
Committee on Rules of this House, would permit this bill, as large, as 
controversial, as complex as it is, to be taken, that little tale, and 
brought in here yet again. In other words, we are holding the farm 
families of America hostage by substituting the controversial omnibus 
bankruptcy bill to push anticonsumer changes to bankruptcy laws and 
bypass the Senate debate on the bill.
  So I would like to point out that there happens to be a very big 
problem on the other side. Notwithstanding the parliamentary 
shenanigans in the House, again with this attempt to end-run around the 
Senate, the antichoice lawmakers have to answer this one question: Why 
do they oppose the compromise of Hyde-Schumer that would hold people 
who illegally harass, intimidate, commit crimes of violence, blockade 
and blow up clinics and innocent people, who abuse the bankruptcy 
system, to evade their lawful debts?
  Will somebody on this floor, to whom I will yield, explain to me why 
they would support criminal conduct as a reason not to allow this bill 
to go through? I will yield to anybody.
  And I would like someone else, further, to explain to me, who has 
stronger views on abortion than the gentleman from Illinois (Chairman 
Hyde) of the Committee on International Relations? He is the cosponsor 
of the bill that you are trying so desperately to keep this provision 
out of.
  I think this is another example of the disgraceful, dishonest tactics 
being used in this House to get through anything by any means 
necessary, and I object to it very strenuously.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, the gentleman from Michigan (Mr. Conyers) is very right 
in saying that there were extensive negotiations relative to the so-
called Hatch-Schumer abortion protestors' amendment during the 
conference in the last Congress. Those negotiations lasted the better 
part of a year. There were both public and private meetings with the 
principals involved.
  At the end of the process, the gentleman from Illinois (Mr. Hyde) and 
the Senator from New York, Mr. Schumer, reached an agreement on 
compromise language that was put into the conference report on H.R. 
333, which was the bankruptcy bill in the last Congress.
  The gentleman from Illinois (Mr. Hyde) lived up to his word. He 
supported the rule that made that conference report in order. 
Unfortunately, that rule was rejected on November 14, 2002, by a roll 
call vote of 172 ``yes'' to 243 ``no.'' I notice my friend from 
Michigan was one of the 243 that voted ``no.'' If he wanted to get that 
language enacted into law, he could have supported bringing up the 
conference report on H.R. 333. For whatever reason, he chose not to do 
so.
  But to answer the arguments that he made on the merits, it is that 
fines and forfeitures from offenses, both criminal and civil, have 
never been dischargeable in bankruptcy, irrespective of the offense 
that gave rise to the fine and forfeiture being imposed. So to say that 
the omission of language relating to abortion clinic protestors is a 
way of shielding criminal activity is a complete red herring. Fines and 
forfeitures that are imposed on abortion clinic protestors in a court 
of law are not dischargeable in bankruptcy today under the existing law 
nor, should this bill be enacted, under the provisions of this bill.
  Now, having said that, I feel very strongly that abortion really 
should not become an issue in the debate on a bankruptcy bill. The 
position of this House has always been that abortion is not a part of 
the bankruptcy debate. There is a time and place to debate issues 
relating to abortion, but this is not it.
  The other body has always disagreed. At some times in the last 
Congress we had a provision in the conference report that did reach a 
compromise on this issue. The House refused to consider it. There are 
other times when the conference in previous Congresses omitted the 
Schumer language that was passed by the Senate, and the conference 
report was passed by the Senate by a vote of 70-to-28 on December 7, 
2000. That bill would have become law without the abortion clinic 
protestor language, except that President Clinton pocket-vetoed the 
bill.
  So I just do not like to see the entire issue of abortion being mixed 
into it. But I think that the arguments that are made that the omission 
of the Hyde-Schumer language is an issue of bad faith is a complete red 
herring. We were not able to pass the bill with it in; we were able to 
pass it without it.
  Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Michigan 
(Mr. Smith).
  Mr. SMITH of Michigan. Mr. Chairman, with regard to the original bill 
that came over from the Senate, the gentlewoman from Wisconsin (Ms. 
Baldwin) and I, have introduced, cosponsored, about six bills either to 
make the Chapter 12 permanent or to at least extend it. I would just 
like to tell my colleagues that in calling the bankruptcy judges that 
handled these farm cases, there has never been a farm case thrown out 
because the law expired. Sometimes it has been reacting late, but we 
have always made it retroactive in every case so those farmers that 
wanted to use the provisions of Chapter 12 have been able to do that.
  So I would like to make Chapter 12 permanent, but I would also like 
to make some of the corrections that incorporate some of my language in 
a larger bankruptcy bill. I hope we can do that. I think it is 
important for our financial institutions to have some of the additional 
concerns that are addressed in this bill. This bill will also at the 
same time expand the availability of loaned money, of available credit 
money, to more people.
  So I would hope we would pass the bill as provided by the Committee 
on Rules and send the bankruptcy bill in total over to the Senate and, 
hopefully, resolve it in conference for final passage.
  Mr. WATT. Mr. Chairman, I yield myself such time as I may consume.
  Mr. CONYERS. Mr. Chairman, will the gentleman yield?
  Mr. WATT. I yield to the gentleman from Michigan.
  Mr. CONYERS. Mr. Chairman, I thank the gentleman for yielding to me.
  I would just like to respond to the distinguished chairman of the 
Committee on the Judiciary, the gentleman from Wisconsin (Mr. 
Sensenbrenner), who feels very strongly that the abortion consideration 
has no place in this bill.
  Well, I will be happy to report that to the predecessor chairman of 
the Committee on the Judiciary, the gentleman

[[Page 553]]

from Illinois (Mr. Hyde). He will be happy to know that you do not feel 
it does and that a whole group of Senators, not to mention a fairly 
substantial number of Members of the House, all think that it does, and 
to think that by running an end-run around this provision with an 
arcane debt farmers provision, it is not going to work.
  Now, for my friend, the gentleman from Michigan (Mr. Smith), who has 
served with great distinction in the Congress, I will be happy to let 
his farmers know that everything is okay, that the provision has 
expired; but somehow he can get into court, or somebody, and they can 
just continue on, that with the judges, even though the provision has 
no effect, that the farmers are okay. I am sure they will be very 
comforted to hear that.
  Mr. WATT. Reclaiming my time, Mr. Chairman, let me also just make a 
couple of responses to the statement of the gentleman from Wisconsin 
(Mr. Sensenbrenner).
  Number one, it is interesting that the chairman thinks that the 
abortion issue should not be part of the bankruptcy bill. Seemingly, 
everybody who abuses the bankruptcy process other than people who have 
had judgments against them for destroying or damaging bankruptcy 
clinics would be an appropriate subject for this. I thought this whole 
thing was to try to get to people who are abusing the system. If that 
is not an abuse, then I am not sure I understand what it is.
  Second, in response to the gentleman's comments about this bill 
preserving criminal discharges, this is not about criminal discharges, 
this is about people who have gotten judgments against abortion clinic 
bombers or damagers, civil judgments, and had those defendants thumb 
their noses at those judgments by saying ``I am just going to declare 
bankruptcy so I do not have to pay this judgment.''

                              {time}  1430

  So if that is not an abuse, then I do not understand what an abuse 
is. If this bill is about dealing with abuse, then it seems to me 
people who fall into the category of abortion clinic abusers of the 
process should be equally accountable.
  Mr. Chairman, I yield 4 minutes to the gentleman from Virginia (Mr. 
Scott).
  Mr. SCOTT of Virginia. Mr. Chairman, I rise in opposition to the bill 
in its present form. Instead of passing the bipartisan bill to help 
family farmers, we have substituted a controversial bill that violates 
traditional bankruptcy principles.
  For centuries, American bankruptcy laws had the principle that if 
people get over their heads in debt, they can cash in all of their 
assets, pay off all the debts they can, and then get a fresh start. For 
policy reasons, a few assets have historically been exempted and a few 
debts have historically been nondischargeable, especially those that 
have been incurred by fraud, a result of crime, or through abuse of the 
bankruptcy system. Yet the principle has always been the same: cash in 
all you have and get a fresh start.
  This bill violates the basic principle. People who incurred debts 
because of illness, unemployment, business failure and have debts they 
can never pay off will be denied an opportunity to get a fresh start. 
They will be stripped of every penny of income after basic expenses of 
food and rent without reasonable allowance for unforeseen emergencies 
such as automobile repairs, which will inevitably come up. People in 
these circumstances will be in economic slavery for 5 years and will 
probably be worse off at the end of 5 years than they were before.
  The bill has no rational measure of determining a person's ability to 
pay off debts. If someone can pay off $10,000 in his debts over 5 
years, that is $167 a month, then he is not entitled to a discharge. A 
person could cosign a spouse's business loan only to have the spouse 
die or disappear. If that person has a $50,000 salary, he may find 
himself owing $1 million, never even able to make interest payments, 
and that person would be denied relief under this bill. A person with 
hospital bills could have hospital bills of hundreds of thousands of 
dollars. That person will be denied relief under this bill. This will 
cause many Americans who have unforeseen business failures, health 
problems, or unemployment to find themselves unable to pay their debts 
and be trapped with no way out. And for 5 years that person would have 
nothing to lose.
  Mr. Chairman, if our goal is to create a situation where people are 
stressed out with nothing to lose and to maximize the chances that a 
person would totally lose control and terrorize a community or its 
coworkers, this is it. Last year in Washington, D.C., we saw the impact 
of financial distress. A North Carolina farmer drove his tractor into 
the pond near the National Mall and was quoted as saying, ``I am broke. 
I am busted. I am out.'' No one in the community is safe when we have 
increased the number of neighbors who feel like they have nothing to 
lose.
  Finally, Mr. Chairman, we have to consider the impact the bill will 
have on small business entrepreneurs. How many people will be willing 
to take a chance on a new business if any failure will result not just 
in bankruptcy but no relief for the family for 5 years? No bank in the 
future will lend a business any cash, especially one in financial 
distress that actually needs the money without the personal signature 
of the owner. And so who will risk not only loss of everything but also 
risk family poverty with no relief for 5 years if the business fails?
  Long ago we decided that there would be no debtors prisons in 
America. This bill represents an effort to take a giant step backwards 
towards that bygone era.
  So I urge my colleagues to reject this bill in its present form so 
that we can return to the original bill and help family farmers.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  The gentleman from North Carolina (Mr. Watt) seemed to imply that 
because this bill does not contain the so- called Schumer language as 
compromised, people who protested abortion clinics will end up being 
able to stiff the owners and operators and the folks who work at that 
clinic of any judgment that might be obtained.
  Now, the current law, Bankruptcy Code section 523(a)(6) makes 
nondischargeable debts incurred by willful or malicious injury by the 
debtor to another entity or to the property of another entity. That law 
is not changed in this bill. So if somebody trashes an abortion clinic 
for whatever reason and gets a civil judgment against them, that civil 
judgment is nondischargeable because the actions were willful and 
malicious.
  Mr. Chairman, again, I looked at this roll call when the rule was 
voted down to bring up the legislation that did what the gentleman 
wanted to do, and that was the compromise Schumer-Hyde language in last 
Congress's bankruptcy bill. We did what my colleague asked, and he 
still voted ``no.''
  So I think that the arguments that have been made are really a red 
herring to try to defeat an overall bankruptcy reform that the House 
has supported overwhelmingly on many occasions since this issue first 
came up at least 7 years ago.
  Mr. Chairman, I yield 2 minutes to the gentleman from Utah (Mr. 
Cannon).
  Mr. CANNON. Mr. Chairman, first of all I would like to associate 
myself with the comments of the gentleman from Wisconsin (Mr. 
Sensenbrenner) on these two points that he has just made and then point 
out in response to the gentleman from Virginia (Mr. Scott) this bill is 
about getting money from people who have it. It is not about oppressing 
the poor. And I think the structure of the bill, if you look at it 
fairly, will show that I rise in support of Senate 1920.
  The amendment in the nature of a substitute of the gentleman from 
Wisconsin (Mr. Sensenbrenner) merely makes technical corrections to 
H.R. 975, which was passed by the House early last year. Given the 
uncontroversial nature of these revisions, I urge my colleagues to 
support the amendment.
  Last March the House passed H.R. 975 by an overwhelming bipartisan 
vote of

[[Page 554]]

315 to 113. The administration has endorsed this legislation. The House 
has voted affirmatively on five separate occasions to pass this bill. 
Today we are reconsidering this bill in an attempt to reignite a 
stalled process. We must take action. America's bankruptcy system is, 
in fact, broken. It gets worse every day with more filings that break 
record after record, putting an enormous strain on the judiciary's 
resources. I have seen numbers that indicate the exponential growth to 
the number of bankruptcy filings.
  I believe the increase in consumer bankruptcy filings will have 
adverse financial consequences for the American economy. In 1997 alone, 
more than $40 billion was discharged as a result of bankruptcy cases. 
This loss translates into a $400 annual tax on every household in our 
Nation in the form of higher prices and higher interest rates.
  I urge my colleagues to support the enactment of the amendment in the 
nature of a substitute to S. 1920.
  Mr. SCOTT of Virginia. Mr. Chairman, will the gentleman yield?
  Mr. CANNON. I yield to the gentleman from Virginia.
  Mr. SCOTT of Virginia. Mr. Chairman, if the gentleman from Utah (Mr. 
Cannon) suggested that what I said was not accurate, I ask what did I 
say that was not accurate?
  Mr. CANNON. Mr. Chairman, reclaiming my time, what I would like to 
point out is if you look at the structure of the bill, this is not 
intended to keep people in slavery or economic servitude. It is 
intended to take money from those people who are gaming the system who 
have a large ability to earn income.
  Mr. SCOTT of Virginia. If the gentleman would yield, I said that 
people who have $2 million in debt that could pay $10,000 of that debt 
that they obviously can never pay will not be able to get relief under 
this bill. Is that true?
  Mr. WATT. Mr. Chairman, I yield as much time as he may consume to the 
gentleman from Virginia (Mr. Scott) to pursue this discussion.
  Mr. SCOTT of Virginia. Mr. Chairman, I said that somebody who can pay 
off $10,000 but can never pay off the $2 million, are they denied 
relief under this bill?
  Mr. CANNON. Mr. Chairman, if the gentleman will continue to yield, 
will they be able to pay off the $10,000?
  Mr. SCOTT of Virginia. They can pay $10,000 on a $2 million debt. The 
fact is they can never pay off the debt. They will be denied relief 
under the bill. Is that right?
  Mr. CANNON. If they can pay off $10,000? In other words, is it 
possible that someone who owes millions and millions of dollars in debt 
may be held responsible for $10,000? We would certainly hope so.
  Mr. SCOTT of Virginia. Mr. Chairman, reclaiming my time, so that 
someone who owes $2 million in debt can pay $10,000 and can never pay 
it will be in economic slavery because every dime they make over food 
and rent will go into the fund to help pay the $10,000.
  Mr. WATT. Mr. Chairman, I yield such time as he may consume to the 
gentleman from New York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, I think the gentleman from Utah (Mr. 
Cannon) misunderstands the question of the gentleman from Virginia (Mr. 
Scott). The question as I understand it was not if someone owes $2 
million and can pay $10,000 should be then forced to pay $10,000. Yes. 
The question was, is it not true that under this bill if he owes $2 
million, can afford to pay only $10,000, he can never get relief even 
if he pays the $10,000 he can afford to.
  Mr. CANNON. Mr. Chairman, will the gentleman yield?
  Mr. NADLER. I yield to the gentleman from Utah.
  Mr. CANNON. Mr. Chairman, it is my understanding of this bill that 
the court can impose a structured pay-out. And that is $10,000, and he 
can pay $10,000, then he is relieved under the bill.
  Mr. SCOTT of Virginia. Mr. Chairman, if the gentleman will yield, so 
every dime that they make over food and rent goes into the fund to help 
pay the $10,000. If that is all they can pay, they have to pay that so 
they are down to food and rent for 5 years although they can only pay 
$10,000 on a $2 million debt. They cannot get relief from the $2 
million under this bill. And the gentleman agrees with that.
  Mr. CANNON. Mr. Chairman, I believe I understand the gentleman's 
question, and the point is that the person can get discharged in the 
course of bankruptcy including a payment, but that payment is not 
related to what his grocery bill is. It is related to what he can earn 
and presumably based upon the judgment and discretion of the court what 
should be paid in addition to a general discharge.
  Mr. WATT. Mr. Chairman, it is obvious that maybe all of my colleagues 
need to read this bill. Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I am prepared to close the general 
debate.
  Mr. WATT. Mr. Chairman, I yield myself the balance of the time, 
although I doubt that I will use it.
  Let me just correct a couple of things that have been put out here 
that seem to me to need correction. First of all, child support and 
alimony are already nondischargeable and all of the women's and 
children's advocacy groups oppose this bill. So do not be misled by 
this claim that somehow or another this bill is going to do something 
to help women's and children's advocacy groups with child support.
  Second, the implication has been made that there is somehow a cap on 
the homestead exemption in this bill, and that is not the case. We 
tried to get one on several occasions. It has never worked. It has 
always failed. And so anybody who is proceeding on the assumption that 
there is some kind of cap in this bill should dissuade themselves of 
that notion.
  Having made those corrections and comments, Mr. Chairman, I presume 
the gentleman from Wisconsin (Mr. Sensenbrenner) will have the last 
word. I encourage my colleagues to vote against the bill on the grounds 
that it will play Russian roulette with family farmers. We ought to 
proceed with the family farmer bill, which needs to be extended to 
protect family farmers and not get them caught up in all of this other 
politics about abortion and in a larger bankruptcy reform bill.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of my 
time.
  Mr. Chairman, the bill that is in the substitute made in order by the 
Committee on Rules, which is the version of the bill that passed the 
House last March by about a three to one margin, is better for family 
farmers than what the Senate sent over to us. But the Senate sent over 
to us what is merely a 6-month extension of chapter 12 of the 
bankruptcy code.
  The substitute amendment made in order at the Committee on Rules 
makes chapter 12 permanent. So you have a choice of saying that the 
other body's bill should be on the President's desk tonight, which 
means we will go through this entire debate again in 6 months, the end 
of June, when the Senate bill's provisions expire, or we will be able 
to pass this bill and take care of the chapter 12 problem permanently.
  To protect our family farmers and to give them certainty in the law, 
let us do the permanent extension, pass the substitute amendment, and 
then pass the bill with its other provisions because that will protect 
everybody from being stiffed by the $400 per household that is passed 
down in the cost of higher goods and services and interest rates as a 
result of the current bankruptcy system.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I rise in opposition to S. 
1920, the bill to extend for 6 months the period for which Chapter 12 
of Title 11 of the United States Code is reenacted. This legislation 
covers a significant amount of ground-consumer filings, small business 
bankruptcy, ancillary and cross-border cases, financial contract 
provisions, amendments to chapter 12 governing family farmer 
reorganization, and health care and employee benefits. These issues 
affect many constituents; therefore, we as creators of legislation must 
not take lightly the consideration of its passage. On its face, S. 1920 
temporarily extends Chapter 12, the family

[[Page 555]]

farmer bankruptcy protection provision, for 6 months, retroactive to 
January 1, 2004 through June 30, 2004.
  If we allow the amendment offered by Mr. Sensenbrenner to pass 
favorably, it will essentially incorporate H.R. 975, the Bankruptcy 
Abuse Prevention and Consumer Protection Act. H.R. 975 passed the House 
last March by vote of 315 but did not surpass the Senate by virtue of a 
contentious debate related to preventing abortion protesters from 
filing for bankruptcy to avoid civil fines and judgment.
  H.R. 975 is a significant departure from the current bankruptcy laws 
that would make it more difficult for individuals to obtain relief from 
their debts through bankruptcy proceedings. Attorneys practicing in 
this field would be faced with more complicated technical requirements, 
and judgment debtors would be faced with additional filing requirements 
and a ``means test.''
  The ``means test'' entails the use of a formula for debtors to 
determine their eligibility for Chapter 7 or Chapter 13 bankruptcy 
relief based on their ability to repay debt, relying in part on 
Internal Revenue Service (IRS) calculations of estimated living 
expenses. Debtors whose remaining income over a 5-year period--after 
allowable expenses are deducted--is sufficient to repay at least 25 
percent of their unsecured debt or $100 a month over 5 years, whichever 
is greater, or $10,000, would not be eligible for relief under Chapter 
7. Under the measure, the current monthly income of the debtor would be 
calculated using the 6-month period ending on the last day of the month 
immediately before the bankruptcy filing was made. Monthly income would 
not include Social Security benefits and payments to victims of war 
crimes or crimes against humanity, or victims or international or 
domestic terrorism. Under the measure, if a debtor's income meets or 
exceeds the means-test threshold, there would be a ``presumption of 
abuse.'' Under current law, there is a presumption in favor of granting 
the debtor a discharge'' i.e., forgiving the debt, so this proposal 
will severely curtail the rights currently enjoyed by taxpayers. Under 
this measure, debtors can refute the presumption of abuse by 
demonstrating ``special circumstances'' that justify additional 
expenses or adjustment to their income to challenge the means-test 
formula. The debtors would have to itemize and document each additional 
expense or income adjustment--a very onerous and laborious ordeal.
  This legislation is simply the wrong measure proffered at the wrong 
time. It will do nothing to address the critical problems facing our 
country. It will unfairly benefit the credit card and banking 
industries, rewarding large financial institutions-those paid for by 
those least able to afford it. The bill includes an extreme means test 
to determine whether a family can file for bankruptcy protection that 
helps them get out of debt, or whether the family must enter into a 
stringent repayment plan under Chapter 13 of the IRS Code.
  Currenlty, less than one-third of Chapter 13 plans are successfully 
completed, and this rigid ``one-size-fits-all'' means test would result 
in an even greater number of failed repayment plans, increased 
administrative costs to the courts, and unnecessary constraints on 
families in genuine need of bankruptcy relief. The bill, along with the 
amendment that incorporates H.R. 975 hurts families. The problem with 
escalating personal bankruptcy filings is not that families are abusing 
the bankruptcy system. Ninety percent of bankruptcies are attributable 
to a crisis in the debtor's family such job loss, divorce, or excessive 
medical bills. In addition, credit card companies are extending credit 
far too easily. Credit card companies want all the benefits of a 
deregulated credit industry, with high interest rates and low minimum-
payment requirements. They continue to irresponsibility extend credit 
to already debt-laden consumers and then run to Congress for help to 
apply pressure to consumers already struggling in this troubled 
economy.
  While the bill purports to elevate the priority of child support 
payments, in reality, credit card companies would receive repayment of 
debt at the same rate as child support obligations. Those provisions 
would have a severe impact on the most vulnerable members of society, 
including women and children who rely on alimony and child support 
payments to live. The bill's homestead exemption cap does little to 
address the problem of wealthy debtors shielding their assets from 
creditors by purchasing million-dollars homes. Sophisticated, wealthy 
debtors can easily plan ahead and evade the cap. Under the bill, with a 
little planning, chief executive officers like Ken Lay, formerly of 
Enron, would be able to keep their homes, while lower-income renters--
the former janitors at Enron, for example--could end up homeless.
  The bill also imposes artificial deadlines and cumbersome new 
paperwork requirements on small businesses trying to reorganize and 
unnecessarily limits the discretion of bankruptcy judges in crafting 
the best possible result for small business debtors and creditors. The 
overbroad requirements called for will force many viable small 
businesses to permanently close their doors. The bill is great for 
credit card companies, but bad for everyone else. In fact, it hurts 
those who most need the second chance offered by bankruptcy.
  I do, however, support amendment No. 2 of House Report No. 108-407 
offered by Ms. Baldwin of Wisconsin. This amendment would make Chapter 
12 of Title 11 of the U.S. Bankruptcy Code that deals with ``family 
farmer'' reorganization permanent and would expand the eligibility 
requirements found within that Chapter. The number of Chapter 12 
filings has risen in the past two years. Allowing this law to lapse 
would be irresponsible for us as legislators. Farmers with debts up to 
$1.5 million can qualify for Chapter 12 protection if 80 percent of 
that debt is related to farm operations. In normal bankruptcy 
proceedings, all assets are subject to liquidation, but under Chapter 
12, land and equipment is exempt, allowing a family farmer to keep 
farming.
  From its incipiency, this has always been a bad bill--one that kicks 
honest debtors when they are already down on their luck--but the timing 
could not be worse. The policy message that is being conveyed with this 
legislative scheme amounts to a slap in the face of the families of our 
brave men and women in uniform who fought and are still fighting in the 
expensive ``Operation Iraqi Freedom,'' a war that has to date not been 
substantially justified. This bill should be defeated so that Congress 
instead of using the public's time and money to pay back credit card 
companies for their campaign contributions, can get back to work 
addressing the very real problems facing our country.
  For the reasons stated above, Mr. Chairman, I oppose this bill.
  Mr. OXLEY. Mr. Chairman, I rise today in support of S. 1920, and the 
amendment offered by the distinguished chairman of the Committee on the 
Judiciary, the gentleman from Wisconsin (Mr. Sensenbrenner).
  As you know, the gentleman's amendment consists of the text of H.R. 
975, the Bankruptcy Abuse Prevention and Consumer Protection Act of 
2003. That bill was additionally referred to the Committee on Financial 
Services, which I chair, based on its jurisdiction over banks and 
banking, credit, and securities and exchanges.
  Mr. Chairman, this legislation is vitally important to the Nation. In 
particular, those provisions addressing the ``netting'' of financial 
contracts are an important part of ensuring that our economic recovery 
continues, as the Chairman of the Federal Reserve Board of Governors, 
Alan Greenspan, has said time and time again.
  Accordingly, I wholeheartedly support any effort to move this 
legislation forward to enactment. For the record, I am submitting an 
exchange of letters between the Chairman of the Committee on the 
Judiciary and myself regarding H.R. 975. I appreciate his willingness 
to work constructively with the Committee on Financial Services and 
look forward to working with him to achieve enactment of these 
important reforms.

                                         House of Representatives,


                              Committee on Financial Services,

                                   Washington, DC, March 14, 2003.
     Hon. F. James Sensenbrenner, Jr.,
     Chairman, Committee on the Judiciary
     Washington, DC.
       Dear Jim: On March 12, 2003, the Committee on the Judiciary 
     ordered reported H.R. 975, the Bankruptcy Abuse Prevention 
     and Consumer Protection Act of 2003. As you know, the 
     Committee on Financial Services was granted an additional 
     referral upon the bill's introduction pursuant to the 
     Committee's jurisdiction under Rule X of the Rules of the 
     House of Representatives over banks and banking, credit, and 
     securities and exchanges.
       Because of your willingness to consult with the Committee 
     on Financial Services regarding this matter, your continuing 
     support for our requested changes, and the need to move this 
     legislation expeditiously, I will waive consideration of the 
     bill by the Financial Services Committee. By agreeing to 
     waive its consideration of the bill, the Financial Services 
     Committee does not waive its jurisdiction over H.R. 975. In 
     addition, the Committee on Financial Services reserves its 
     authority to seek conferees on any provisions of the bill 
     that are within the Financial Services Committee's 
     jurisdiction during any House-Senate conference that may be 
     convened on this legislation. I ask your commitment to 
     support any request by the Committee on Financial Services 
     for conferees on H.R. 975 or related legislation.
       I request that you include this letter and your response as 
     part of your committee's report on the bill and the 
     Congressional Record during consideration of the legislation 
     on the House floor.

[[Page 556]]

       Thank you for your attention to these matters.
           Sincerely,
                                                 Michael G. Oxley,
     Chairman.
                                  ____

                                         House of Representatives,


                                   Committee on the Judiciary,

                                   Washington, DC, March 17, 2003.
     Hon. Michael G. Oxley,
     Chairman, Committee on Financial Services,
     House of Representatives, Washington, DC.
       Dear Michael: This letter responds to your letter dated 
     March 14, 2003, concerning H.R. 975, the ``Bankruptcy Abuse 
     Prevention and Consumer Protection Act of 2003.''
       I agree that the bill contains matters within the Financial 
     Services Committee's jurisdiction and appreciate your 
     willingness to be discharged from further consideration of 
     H.R. 975 so we may proceed to the floor.
       Pursuant to your request, a copy of your letter and this 
     letter will be included in the report of the Committee on the 
     Judiciary on H.R. 975.
           Sincerely,
                                       F. James Sensenbrenner, Jr.
                                                         Chairman.

  Mr. CANTOR. Mr. Chairman, I rise today to speak in favor of 
bankruptcy reform, an issue this body has voted in favor of time and 
time again.
  This reform is long overdue and will go a long way to stop abuses of 
the bankruptcy code.
  This measure will permanently extend the agricultural chapter of the 
bankruptcy code and will add new protections for the American people, 
including a ``bill of rights'' for those who file for bankruptcy.
  Additionally, this measure will provide new protections for parents 
and will strengthen their ability to collect child support. This 
legislation will also fix the system so that high income debtors 
attempting to protect their excessive lifestyles will be held 
accountable and not continue to live lavishly at the expense of working 
families.
  By establishing a means test for those who file for bankruptcy, this 
legislation will ensure that those who can repay their debts will no 
longer be able to abuse the system. These abuses negatively affect the 
economy by raising the price of goods while simultaneously lowering the 
availability of credit. This measure is a victory for the majority of 
Americans who play by the rules over those who choose to play by their 
own.
  Mr. Chairman, the time has come for us to pass bankruptcy reform. 
These reforms are necessary to protect the American people; and I urge 
passage of this legislation.
  Mr. BISHOP of Georgia. Mr. Chairman, I rise today in support of S. 
1920 and for the rule which preserves the institution of bankruptcy, 
and provides an important safety net for American families, 
individuals, and businesses.
  At first glance, the bill before us, S. 1920, provides for a 6 month 
extension of Chapter 12 bankruptcy protection for America's family 
farmers. I am again happy to support this greatly needed extension, but 
there's more to this bill than that.
  The rule that we are also considering today substitutes into S. 1920 
the text of the much larger bankruptcy reform bill (H.R. 975) which we 
in the House passed on March 19, 2003 by a vote of 315-113. This was 
great news and progress in preserving the institution of bankruptcy 
protection. Unfortunately, the bill has not yet been taken up in the 
Senate--not surprisingly since previous House versions of bankruptcy 
protection have died on the vine in the Senate when extraneous 
provisions were included.
  So today we have an opportunity for a second bite at that apple. The 
provisions in S. 1920 (and H.R. 975 by incorporation) preserve 
bankruptcy by ensuring this protection to those who really need it as a 
result of unforeseeable medical bills, unemployment, and other 
legitimate needs. I am also extremely pleased that it also includes a 
permanent extension of Chapter 12 family farmer bankruptcy protection, 
and I'd like to also acknowledge the efforts of Representative Baldwin, 
whose amendment we are also considering, similarly makes permanent this 
important protection. Importantly, H.R. 975 ensures that more family 
farmers will be eligible for Chapter 12 by easing some of the income 
and debt limitations that currently restrict access to this type of 
bankruptcy relief. While reasonable minds may differ as to the best 
vehicle for family farmer bankruptcy protection, currently family 
farmers are without the bankruptcy protection they need. This is 
completely unacceptable.
  Broadly speaking, Mr. Chairman, the bankruptcy system in America is 
broken and needs to be fixed. Bankruptcy filings have soared in recent 
years, with thousands of filers who are capable of repaying their 
debts, simply walking away from their debts and obligations through the 
current bankruptcy filing system.
  We need a greater and more sustainable safety net for all Americans, 
and we need it now. The bill before us protects those who truly need it 
most, while also including protections for business so that they can 
get back on track and get back to work.
  This bill is a good deal for Americans, Mr. Chairman, saving American 
taxpayers billions of dollars each and every year. It is a powerful and 
greatly needed measure that protects consumers and creditors against 
those who would abuse the system, while ensuring a fresh start to those 
who legitimately need the safety net that is the bankruptcy system.
  Let me be perfectly clear--one way or another, we must pass family 
farmer bankruptcy protection now in order to lift up America's farmers 
by making this protection permanent. I believe that the bill before us 
holds this promise. But if this bill fails for any number of political 
obstacles between the House and the Senate, we must still honor our 
responsibility to ensure that our family farmers are protected. I know 
that I will, and I urge my colleagues to do the same.
  Mr. BEREUTER. Mr. Chairman, this Member rises today to express his 
support for S. 1920, as amended. The Rules Committee has reported-out a 
rule (H. Res. 503) which upon passage, automatically modifies this bill 
by substituting the text of H.R. 975 which the House passed on March 
19, 2003. This Member was a cosponsor of this earlier passed measure.
  It is important to note that bankruptcy reforms bills have passed 
both the House and Senate in the 105th, 106th, and 107th Congresses. In 
the 105th Congress, the House passed a bankruptcy reform conference 
report, while the Senate failed to pass the conference report. In the 
106th Congress, former President Bill Clinton pocket vetoed a 
bankruptcy reform conference report. During the 107th Congress, the 
rule under which the bankruptcy reform conference report was to be 
considered was defeated in the House because of a tenuous connection 
drawn to the subject of abortion clinics by conferees from the other 
body.
  This Member would thank the distinguished gentleman from Wisconsin 
(Mr. Sensenbrenner), the Chairman of the Judiciary Committee, for his 
efforts in bringing, S. 1920, as amended to the House Floor for 
consideration. This Member supports S. 1920, as amended, for numerous 
reasons; however, the most important reasons include the following:
  First, this Member supports the provision 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 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 this 
legislation 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 this legislation, 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 actual expenses for the care and support of an elderly, chronically 
ill, or disabled member of the debtor's household or immediate family.
  Third, this Member supports the permanent extension of Chapter 12 
bankruptcy in this legislation 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 to reorganize

[[Page 557]]

their assets in manner which balances the interests of creditors and 
the future success of the involved farmer.
  It is important to note that S. 1920, as passed by the other body on 
November 25, 2003, would extend Chapter 12 bankruptcy for family farms 
and ranches through July 1, 2004. Chapter 12 bankruptcy expired on 
January 1, 2004.
  If Chapter 12 bankruptcy provisions are not permanently extended for 
family farmers, its expiration on January 1, 2004, would continue to be 
a 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.
  Lastly, this Member supports the provisions in this legislation, 
which requires that people convicted of a felony or who owe a debt from 
a securities fraud violation in the 5 years before filing for 
bankruptcy cannot claim an unlimited homestead exemption. This Member 
believes that this provision in the conference report is imperative in 
light of the recent corporate scandals at Enron and WorldCom. For 
example, this provision would apply to the $7 million penthouse in 
Houston of Kenneth Lay (if he still owns it), the former chairman of 
Enron, if he both files for personal bankruptcy in the future and owes 
a debt due to any conviction of securities fraud. In addition, this 
provision may also be relevant to Scott D. Sullivan, the former chief 
financial officer of WorldCom, who at one time was building a $15 
million mansion in Boca Raton, Florida.
  In closing, for these aforementioned reasons and many others, this 
Member urges his colleagues to support S. 1920, as amended.
  Mr. SMITH of Texas. Mr. Chairman I support this bill. It allows 
consumers to benefit from the changes to the bankruptcy system that 
were approved by this House last year.
  It's time for Congress to enact permanent meaningful bankruptcy 
reform. Recent surveys show that 70 percent of Americans support 
reforming our nation's bankruptcy laws. Unless we take action, 
consumers will continue to be negatively impacted by the current system 
and fraudulent filings will continue to be rewarded rather than 
discouraged.
  In 1980, 300,000 bankruptcy petitions were filed. This past year, 
over 1.2 million were reported during just the first nine months. Many 
of these filings are legitimate attempts by debtors to pay their debts 
and obtain a fresh start. However, bankruptcy is too often used as a 
way to avoid responsibilities.
  Unnecessary Bankruptcy filings continue to increase at dramatic 
rates. This is bad for consumers and bad for our economy. The costs of 
these filings are passed on to America's businesses and consumers, who 
should not have to absorb these debts. We must ensure that debtors 
actually belong in bankruptcy and are not using the system to avoid 
their obligations.
  This legislation encourages personal responsibility, protects 
consumers, and ensures that bankruptcy is used only as a last resort 
and is not abused by those who can afford to repay their debts.
  Bankruptcy reform is good for consumers, family farmers, and our 
economy. I urge my colleagues to support this bill.
  Mr. SENSENBRENNER. Mr. Chairman, I yield back the balance of my time.

                              {time}  1445

  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
consisting of the text of H.R. 975 as passed by the House shall be 
considered as an original bill for the purpose of amendment under the 
5-minute rule and shall be considered read.
  The text of the amendment in the nature of a substitute is as 
follows:

                                H.R. 975

       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 2003''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

                    TITLE I--NEEDS-BASED BANKRUPTCY

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

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation agreement practices.
Sec. 204. Preservation of claims and defenses upon sale of predatory 
              loans.
Sec. 205. GAO study and report on reaffirmation agreement process.

                   Subtitle B--Priority Child Support

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

                 Subtitle C--Other Consumer Protections

Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Protection of personally identifiable information.
Sec. 232. Consumer privacy ombudsman.
Sec. 233. Prohibition on disclosure of name of minor children.

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

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

[[Page 558]]

Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
Sec. 329. Clarification of postpetition wages and benefits.
Sec. 330. Delay of discharge during pendency of certain proceedings.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

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

            Subtitle B--Small Business Bankruptcy Provisions

Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment 
              of trustee.
Sec. 443. Study of operation of title 11, United States Code, with 
              respect to small businesses.
Sec. 444. Payment of interest.
Sec. 445. Priority for administrative expenses.
Sec. 446. Duties with respect to a debtor who is a plan administrator 
              of an employee benefit plan.
Sec. 447. Appointment of committee of retired employees.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

                       TITLE VI--BANKRUPTCY DATA

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

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

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

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

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

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

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

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
Sec. 1004. Definition of family farmer.
Sec. 1005. Elimination of requirement that family farmer and spouse 
              receive over 50 percent of income from farming operation 
              in year prior to bankruptcy.
Sec. 1006. Prohibition of retroactive assessment of disposable income.
Sec. 1007. Family fishermen.

              TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

Sec. 1101. Definitions.
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health 
              care business and other administrative expenses.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Exclusion from program participation not subject to 
              automatic stay.

                    TITLE XII--TECHNICAL AMENDMENTS

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

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a 
              dwelling.
Sec. 1303. Disclosures related to ``introductory rates''.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance 
              charges.
Sec. 1307. Dual use debit card.

[[Page 559]]

Sec. 1308. Study of bankruptcy impact of credit extended to dependent 
              students.
Sec. 1309. Clarification of clear and conspicuous.

      TITLE XIV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1401. Effective date; application of amendments.

            TITLE XV--PREVENTING CORPORATE BANKRUPTCY ABUSE

Sec. 1501. Employee wage and benefit priorities.
Sec. 1502. Fraudulent transfers and obligations.
Sec. 1503. Payment of insurance benefits to retired employees.
Sec. 1504. 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 so redesignated by subparagraph 
     (A) of this paragraph--
       (i) in the first sentence--

       (I) by striking ``but not at the request or suggestion of'' 
     and inserting ``trustee (or bankruptcy administrator, if 
     any), or'';
       (II) by inserting ``, or, with the debtor's consent, 
     convert such a case to a case under chapter 11 or 13 of this 
     title,'' after ``consumer debts''; and
       (III) by striking ``a substantial abuse'' and inserting 
     ``an abuse''; and

       (ii) by striking the next to last sentence; and
       (C) by adding at the end the following:
       ``(2)(A)(i) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter, the court shall presume abuse exists if the 
     debtor's current monthly income reduced by the amounts 
     determined under clauses (ii), (iii), and (iv), and 
     multiplied by 60 is not less than the lesser of--
       ``(I) 25 percent of the debtor's nonpriority unsecured 
     claims in the case, or $6,000, whichever is greater; or
       ``(II) $10,000.
       ``(ii)(I) The debtor's monthly expenses shall be the 
     debtor's applicable monthly expense amounts specified under 
     the National Standards and Local Standards, and the debtor's 
     actual monthly expenses for the categories specified as Other 
     Necessary Expenses issued by the Internal Revenue Service for 
     the area in which the debtor resides, as in effect on the 
     date of the order for relief, for the debtor, the dependents 
     of the debtor, and the spouse of the debtor in a joint case, 
     if the spouse is not otherwise a dependent. Notwithstanding 
     any other provision of this clause, the monthly expenses of 
     the debtor shall not include any payments for debts. In 
     addition, the debtor's monthly expenses shall include the 
     debtor's reasonably necessary expenses incurred to maintain 
     the safety of the debtor and the family of the debtor from 
     family violence as identified under section 309 of the Family 
     Violence Prevention and Services Act, or other applicable 
     Federal law. The expenses included in the debtor's monthly 
     expenses described in the preceding sentence shall be kept 
     confidential by the court. In addition, if it is demonstrated 
     that it is reasonable and necessary, the debtor's monthly 
     expenses may also include an additional allowance for food 
     and clothing of up to 5 percent of the food and clothing 
     categories as specified by the National Standards issued by 
     the Internal Revenue Service.
       ``(II) In addition, the debtor's monthly expenses may 
     include, if applicable, the continuation of actual expenses 
     paid by the debtor that are reasonable and necessary for care 
     and support of an elderly, chronically ill, or disabled 
     household member or member of the debtor's immediate family 
     (including parents, grandparents, siblings, children, and 
     grandchildren of the debtor, the dependents of the debtor, 
     and the spouse of the debtor in a joint case who is not a 
     dependent) and who is unable to pay for such reasonable and 
     necessary expenses.
       ``(III) In addition, for a debtor eligible for chapter 13, 
     the debtor's monthly expenses may include the actual 
     administrative expenses of administering a chapter 13 plan 
     for the district in which the debtor resides, up to an amount 
     of 10 percent of the projected plan payments, as determined 
     under schedules issued by the Executive Office for United 
     States Trustees.
       ``(IV) In addition, the debtor's monthly expenses may 
     include the actual expenses for each dependent child less 
     than 18 years of age, not to exceed $1,500 per year per 
     child, to attend a private or public elementary or secondary 
     school if the debtor provides documentation of such expenses 
     and a detailed explanation of why such expenses are 
     reasonable and necessary, and why such expenses are not 
     already accounted for in the National Standards, Local 
     Standards, or Other Necessary Expenses referred to in 
     subclause (I).
       ``(V) In addition, the debtor's monthly expenses may 
     include an allowance for housing and utilities, in excess of 
     the allowance specified by the Local Standards for housing 
     and utilities issued by the Internal Revenue Service, based 
     on the actual expenses for home energy costs if the debtor 
     provides documentation of such actual expenses and 
     demonstrates that such actual expenses are reasonable and 
     necessary.
       ``(iii) The debtor's average monthly payments on account of 
     secured debts shall be calculated as the sum of--
       ``(I) the total of all amounts scheduled as contractually 
     due to secured creditors in each month of the 60 months 
     following the date of the petition; and
       ``(II) any additional payments to secured creditors 
     necessary for the debtor, in filing a plan under chapter 13 
     of this title, to maintain possession of the debtor's primary 
     residence, motor vehicle, or other property necessary for the 
     support of the debtor and the debtor's dependents, that 
     serves as collateral for secured debts;
     divided by 60.

       ``(iv) The debtor's expenses for payment of all priority 
     claims (including priority child support and alimony claims) 
     shall be calculated as the total amount of debts entitled to 
     priority, divided by 60.
       ``(B)(i) In any proceeding brought under this subsection, 
     the presumption of abuse may only be rebutted by 
     demonstrating special circumstances that justify additional 
     expenses or adjustments of current monthly income for which 
     there is no reasonable alternative.
       ``(ii) In order to establish special circumstances, the 
     debtor shall be required to itemize each additional expense 
     or adjustment of income and to provide--
       ``(I) documentation for such expense or adjustment to 
     income; and
       ``(II) a detailed explanation of the special circumstances 
     that make such expenses or adjustment to income necessary and 
     reasonable.
       ``(iii) The debtor shall attest under oath to the accuracy 
     of any information provided to demonstrate that additional 
     expenses or adjustments to income are required.
       ``(iv) The presumption of abuse may only be rebutted if the 
     additional expenses or adjustments to income referred to in 
     clause (i) cause the product of the debtor's current monthly 
     income reduced by the amounts determined under clauses (ii), 
     (iii), and (iv) of subparagraph (A) when multiplied by 60 to 
     be less than the lesser of--
       ``(I) 25 percent of the debtor's nonpriority unsecured 
     claims, or $6,000, whichever is greater; or
       ``(II) $10,000.
       ``(C) As part of the schedule of current income and 
     expenditures required under section 521, the debtor shall 
     include a statement of the debtor's current monthly income, 
     and the calculations that determine whether a presumption 
     arises under subparagraph (A)(i), that show how each such 
     amount is calculated.
       ``(3) In considering under paragraph (1) whether the 
     granting of relief would be an abuse of the provisions of 
     this chapter in a case in which the presumption in 
     subparagraph (A)(i) of such paragraph does not arise or is 
     rebutted, the court shall consider--
       ``(A) whether the debtor filed the petition in bad faith; 
     or
       ``(B) the totality of the circumstances (including whether 
     the debtor seeks to reject a personal services contract and 
     the financial need for such rejection as sought by the 
     debtor) of the debtor's financial situation demonstrates 
     abuse.
       ``(4)(A) The court, on its own initiative or on the motion 
     of a party in interest, in accordance with the procedures 
     described in rule 9011 of the Federal Rules of Bankruptcy 
     Procedure, may order the attorney for the debtor to reimburse 
     the trustee for all reasonable costs in prosecuting a motion 
     filed under section 707(b), including reasonable attorneys' 
     fees, if--
       ``(i) a trustee files a motion for dismissal or conversion 
     under this subsection; and
       ``(ii) the court--
       ``(I) grants such motion; and
       ``(II) finds that the action of the attorney for the debtor 
     in filing under this chapter violated rule 9011 of the 
     Federal Rules of Bankruptcy Procedure.
       ``(B) If the court finds that the attorney for the debtor 
     violated rule 9011 of the Federal Rules of Bankruptcy 
     Procedure, the court, on its own initiative or on the motion 
     of a party in interest, in accordance with such procedures, 
     may order--
       ``(i) the assessment of an appropriate civil penalty 
     against the attorney for the debtor; and
       ``(ii) the payment of such civil penalty to the trustee, 
     the United States trustee (or the bankruptcy administrator, 
     if any).
       ``(C) The signature of an attorney on a petition, pleading, 
     or written motion shall constitute a certification that the 
     attorney has--
       ``(i) performed a reasonable investigation into the 
     circumstances that gave rise to the petition, pleading, or 
     written motion; and

[[Page 560]]

       ``(ii) determined that the petition, pleading, or written 
     motion--
       ``(I) is well grounded in fact; and
       ``(II) is warranted by existing law or a good faith 
     argument for the extension, modification, or reversal of 
     existing law and does not constitute an abuse under paragraph 
     (1).
       ``(D) The signature of an attorney on the petition shall 
     constitute a certification that the attorney has no knowledge 
     after an inquiry that the information in the schedules filed 
     with such petition is incorrect.
       ``(5)(A) Except as provided in subparagraph (B) and subject 
     to paragraph (6), the court, on its own initiative or on the 
     motion of a party in interest, in accordance with the 
     procedures described in rule 9011 of the Federal Rules of 
     Bankruptcy Procedure, may award a debtor all reasonable costs 
     (including reasonable attorneys' fees) in contesting a motion 
     filed by a party in interest (other than a trustee or United 
     States trustee (or bankruptcy administrator, if any)) under 
     this subsection if--
       ``(i) the court does not grant the motion; and
       ``(ii) the court finds that--
       ``(I) the position of the party that filed the motion 
     violated rule 9011 of the Federal Rules of Bankruptcy 
     Procedure; or
       ``(II) the attorney (if any) who filed the motion did not 
     comply with the requirements of clauses (i) and (ii) of 
     paragraph (4)(C), and the motion was made solely for the 
     purpose of coercing a debtor into waiving a right guaranteed 
     to the debtor under this title.
       ``(B) A small business that has a claim of an aggregate 
     amount less than $1,000 shall not be subject to subparagraph 
     (A)(ii)(I).
       ``(C) For purposes of this paragraph--
       ``(i) the term `small business' means an unincorporated 
     business, partnership, corporation, association, or 
     organization that--
       ``(I) has fewer than 25 full-time employees as determined 
     on the date on which the motion is filed; and
       ``(II) is engaged in commercial or business activity; and
       ``(ii) the number of employees of a wholly owned subsidiary 
     of a corporation includes the employees of--
       ``(I) a parent corporation; and
       ``(II) any other subsidiary corporation of the parent 
     corporation.
       ``(6) Only the judge or United States trustee (or 
     bankruptcy administrator, if any) may file a motion under 
     section 707(b), if the current monthly income of the debtor, 
     or in a joint case, the debtor and the debtor's spouse, as of 
     the date of the order for relief, when multiplied by 12, is 
     equal to or less than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4.
       ``(7)(A) No judge, United States trustee (or bankruptcy 
     administrator, if any), trustee, or other party in interest 
     may file a motion under paragraph (2) if the current monthly 
     income of the debtor and the debtor's spouse combined, as of 
     the date of the order for relief when multiplied by 12, is 
     equal to or less than--
       ``(i) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(ii) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(iii) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4.
       ``(B) In a case that is not a joint case, current monthly 
     income of the debtor's spouse shall not be considered for 
     purposes of subparagraph (A) if--
       ``(i)(I) the debtor and the debtor's spouse are separated 
     under applicable nonbankruptcy law; or
       ``(II) the debtor and the debtor's spouse are living 
     separate and apart, other than for the purpose of evading 
     subparagraph (A); and
       ``(ii) the debtor files a statement under penalty of 
     perjury--
       ``(I) specifying that the debtor meets the requirement of 
     subclause (I) or (II) of clause (i); and
       ``(II) disclosing the aggregate, or best estimate of the 
     aggregate, amount of any cash or money payments received from 
     the debtor's spouse attributed to the debtor's current 
     monthly income.''.
       (b) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (10) the 
     following:
       ``(10A) `current monthly income'--
       ``(A) means the average monthly income from all sources 
     that the debtor receives (or in a joint case the debtor and 
     the debtor's spouse receive) without regard to whether such 
     income is taxable income, derived during the 6-month period 
     ending on--
       ``(i) the last day of the calendar month immediately 
     preceding the date of the commencement of the case if the 
     debtor files the schedule of current income required by 
     section 521(a)(1)(B)(ii); or
       ``(ii) the date on which current income is determined by 
     the court for purposes of this title if the debtor does not 
     file the schedule of current income required by section 
     521(a)(1)(B)(ii); and
       ``(B) includes any amount paid by any entity other than the 
     debtor (or in a joint case the debtor and the debtor's 
     spouse), on a regular basis for the household expenses of the 
     debtor or the debtor's dependents (and in a joint case the 
     debtor's spouse if not otherwise a dependent), but excludes 
     benefits received under the Social Security Act, payments to 
     victims of war crimes or crimes against humanity on account 
     of their status as victims of such crimes, and payments to 
     victims of international terrorism (as defined in section 
     2331 of title 18) or domestic terrorism (as defined in 
     section 2331 of title 18) on account of their status as 
     victims of such terrorism;''.
       (c) United States Trustee and Bankruptcy Administrator 
     Duties.--Section 704 of title 11, United States Code, is 
     amended--
       (1) by inserting ``(a)'' before ``The trustee
     shall--''; and
       (2) by adding at the end the following:
       ``(b)(1) With respect to a debtor who is an individual in a 
     case under this chapter--
       ``(A) the United States trustee (or the bankruptcy 
     administrator, if any) shall review all materials filed by 
     the debtor and, not later than 10 days after the date of the 
     first meeting of creditors, file with the court a statement 
     as to whether the debtor's case would be presumed to be an 
     abuse under section 707(b); and
       ``(B) not later than 5 days after receiving a statement 
     under subparagraph (A), the court shall provide a copy of the 
     statement to all creditors.
       ``(2) The United States trustee (or bankruptcy 
     administrator, if any) shall, not later than 30 days after 
     the date of filing a statement under paragraph (1), either 
     file a motion to dismiss or convert under section 707(b) or 
     file a statement setting forth the reasons the United States 
     trustee (or the bankruptcy administrator, if any) does not 
     consider such a motion to be appropriate, if the United 
     States trustee (or the bankruptcy administrator, if any) 
     determines that the debtor's case should be presumed to be an 
     abuse under section 707(b) and the product of the debtor's 
     current monthly income, multiplied by 12 is not less than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner; or
       ``(B) in the case of a debtor in a household of 2 or more 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals.''.
       (d) Notice.--Section 342 of title 11, United States Code, 
     is amended by adding at the end the following:
       ``(d) In a case under chapter 7 of this title in which the 
     debtor is an individual and in which the presumption of abuse 
     arises under section 707(b), the clerk shall give written 
     notice to all creditors not later than 10 days after the date 
     of the filing of the petition that the presumption of abuse 
     has arisen.''.
       (e) Nonlimitation of Information.--Nothing in this title 
     shall limit the ability of a creditor to provide information 
     to a judge (except for information communicated ex parte, 
     unless otherwise permitted by applicable law), United States 
     trustee (or bankruptcy administrator, if any), or trustee.
       (f) Dismissal for Certain Crimes.--Section 707 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(c)(1) In this subsection--
       ``(A) the term `crime of violence' has the meaning given 
     such term in section 16 of title 18; and
       ``(B) the term `drug trafficking crime' has the meaning 
     given such term in section 924(c)(2) of title 18.
       ``(2) Except as provided in paragraph (3), after notice and 
     a hearing, the court, on a motion by the victim of a crime of 
     violence or a drug trafficking crime, may when it is in the 
     best interest of the victim dismiss a voluntary case filed 
     under this chapter by a debtor who is an individual if such 
     individual was convicted of such crime.
       ``(3) The court may not dismiss a case under paragraph (2) 
     if the debtor establishes by a preponderance of the evidence 
     that the filing of a case under this chapter is necessary to 
     satisfy a claim for a domestic support obligation.''.
       (g) Confirmation of Plan.--Section 1325(a) of title 11, 
     United States Code, is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period and inserting 
     a semicolon; and
       (3) by inserting after paragraph (6) the following:
       ``(7) the action of the debtor in filing the petition was 
     in good faith;''.
       (h) Applicability of Means Test to Chapter 13.--Section 
     1325(b) of title 11, United States Code, is amended--
       (1) in paragraph (1)(B), by inserting ``to unsecured 
     creditors'' after ``to make payments''; and

[[Page 561]]

       (2) by striking paragraph (2) and inserting the following:
       ``(2) For purposes of this subsection, the term `disposable 
     income' means current monthly income received by the debtor 
     (other than child support payments, foster care payments, or 
     disability payments for a dependent child made in accordance 
     with applicable nonbankruptcy law to the extent reasonably 
     necessary to be expended for such child) less amounts 
     reasonably necessary to be expended--
       ``(A)(i) for the maintenance or support of the debtor or a 
     dependent of the debtor, or for a domestic support 
     obligation, that first becomes payable after the date the 
     petition is filed; and
       ``(ii) for charitable contributions (that meet the 
     definition of `charitable contribution' under section 
     548(d)(3) to a qualified religious or charitable entity or 
     organization (as defined in section 548(d)(4)) in an amount 
     not to exceed 15 percent of gross income of the debtor for 
     the year in which the contributions are made; and
       ``(B) if the debtor is engaged in business, for the payment 
     of expenditures necessary for the continuation, preservation, 
     and operation of such business.
       ``(3) Amounts reasonably necessary to be expended under 
     paragraph (2) shall be determined in accordance with 
     subparagraphs (A) and (B) of section 707(b)(2), if the debtor 
     has current monthly income, when multiplied by 12, greater 
     than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4.''.
       (i) Special Allowance for Health Insurance.--Section 
     1329(a) of title 11, United States Code, is amended--
       (1) in paragraph (2) by striking ``or'' at the end;
       (2) in paragraph (3) by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(4) reduce amounts to be paid under the plan by the 
     actual amount expended by the debtor to purchase health 
     insurance for the debtor (and for any dependent of the debtor 
     if such dependent does not otherwise have health insurance 
     coverage) if the debtor documents the cost of such insurance 
     and demonstrates that--
       ``(A) such expenses are reasonable and necessary;
       ``(B)(i) if the debtor previously paid for health 
     insurance, the amount is not materially larger than the cost 
     the debtor previously paid or the cost necessary to maintain 
     the lapsed policy; or
       ``(ii) if the debtor did not have health insurance, the 
     amount is not materially larger than the reasonable cost that 
     would be incurred by a debtor who purchases health insurance, 
     who has similar income, expenses, age, and health status, and 
     who lives in the same geographical location with the same 
     number of dependents who do not otherwise have health 
     insurance coverage; and
       ``(C) the amount is not otherwise allowed for purposes of 
     determining disposable income under section 1325(b) of this 
     title;
     and upon request of any party in interest, files proof that a 
     health insurance policy was purchased.''.
       (j) Adjustment of Dollar Amounts.--Section 104(b) of title 
     11, United States Code, is amended by striking ``and 
     523(a)(2)(C)'' each place it appears and inserting 
     ``523(a)(2)(C), 707(b), and 1325(b)(3)''.
       (k) Definition of `Median Family Income'.--Section 101 of 
     title 11, United States Code, is amended by inserting after 
     paragraph (39) the following:
       ``(39A) `median family income' means for any year--
       ``(A) the median family income both calculated and reported 
     by the Bureau of the Census in the then most recent year; and
       ``(B) if not so calculated and reported in the then current 
     year, adjusted annually after such most recent year until the 
     next year in which median family income is both calculated 
     and reported by the Bureau of the Census, to reflect the 
     percentage change in the Consumer Price Index for All Urban 
     Consumers during the period of years occurring after such 
     most recent year and before such current year;''.
       (k) Clerical Amendment.--The table of sections for chapter 
     7 of title 11, United States Code, is amended by striking the 
     item relating to section 707 and inserting the following:

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

     SEC. 103. SENSE OF CONGRESS AND STUDY.

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

     SEC. 104. NOTICE OF ALTERNATIVES.

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

     SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

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

     SEC. 106. CREDIT COUNSELING.

       (a) Who May Be a Debtor.--Section 109 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(h)(1) Subject to paragraphs (2) and (3), and 
     notwithstanding any other provision of this section, an 
     individual may not be a debtor under this title unless such 
     individual has, during the 180-day period preceding the date 
     of filing of the petition by such individual, received from 
     an approved nonprofit budget and credit counseling agency 
     described in section 111(a) an individual or group briefing 
     (including a briefing conducted by telephone or on the 
     Internet) that outlined the opportunities for available 
     credit counseling and assisted such individual in performing 
     a related budget analysis.
       ``(2)(A) Paragraph (1) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee (or the bankruptcy administrator, if any) determines 
     that the approved nonprofit budget

[[Page 562]]

     and credit counseling agencies for such district are not 
     reasonably able to provide adequate services to the 
     additional individuals who would otherwise seek credit 
     counseling from such agencies by reason of the requirements 
     of paragraph (1).
       ``(B) The United States trustee (or the bankruptcy 
     administrator, if any) who makes a determination described in 
     subparagraph (A) shall review such determination not later 
     than 1 year after the date of such determination, and not 
     less frequently than annually thereafter. Notwithstanding the 
     preceding sentence, a nonprofit budget and credit counseling 
     agency may be disapproved by the United States trustee (or 
     the bankruptcy administrator, if any) at any time.
       ``(3)(A) Subject to subparagraph (B), the requirements of 
     paragraph (1) shall not apply with respect to a debtor who 
     submits to the court a certification that--
       ``(i) describes exigent circumstances that merit a waiver 
     of the requirements of paragraph (1);
       ``(ii) states that the debtor requested credit counseling 
     services from an approved nonprofit budget and credit 
     counseling agency, but was unable to obtain the services 
     referred to in paragraph (1) during the 5-day period 
     beginning on the date on which the debtor made that request; 
     and
       ``(iii) is satisfactory to the court.
       ``(B) With respect to a debtor, an exemption under 
     subparagraph (A) shall cease to apply to that debtor on the 
     date on which the debtor meets the requirements of paragraph 
     (1), but in no case may the exemption apply to that debtor 
     after the date that is 30 days after the debtor files a 
     petition, except that the court, for cause, may order an 
     additional 15 days.''.
       (b) Chapter 7 Discharge.--Section 727(a) of title 11, 
     United States Code, is amended--
       (1) in paragraph (9), by striking ``or'' at the end;
       (2) in paragraph (10), by striking the period and inserting 
     ``; or''; and
       (3) by adding at the end the following:
       ``(11) after filing the petition, the debtor failed to 
     complete an instructional course concerning personal 
     financial management described in section 111, except that 
     this paragraph shall not apply with respect to a debtor who 
     resides in a district for which the United States trustee (or 
     the bankruptcy administrator, if any) determines that the 
     approved instructional courses are not adequate to service 
     the additional individuals who would otherwise be required to 
     complete such instructional courses under this section (The 
     United States trustee (or the bankruptcy administrator, if 
     any) who makes a determination described in this paragraph 
     shall review such determination not later than 1 year after 
     the date of such determination, and not less frequently than 
     annually thereafter.).''.
       (c) Chapter 13 Discharge.--Section 1328 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(g)(1) The court shall not grant a discharge under this 
     section to a debtor unless after filing a petition the debtor 
     has completed an instructional course concerning personal 
     financial management described in section 111.
       ``(2) Paragraph (1) shall not apply with respect to a 
     debtor who resides in a district for which the United States 
     trustee (or the bankruptcy administrator, if any) determines 
     that the approved instructional courses are not adequate to 
     service the additional individuals who would otherwise be 
     required to complete such instructional course by reason of 
     the requirements of paragraph (1).
       ``(3) The United States trustee (or the bankruptcy 
     administrator, if any) who makes a determination described in 
     paragraph (2) shall review such determination not later than 
     1 year after the date of such determination, and not less 
     frequently than annually thereafter.''.
       (d) Debtor's Duties.--Section 521 of title 11, United 
     States Code, is amended--
       (1) by inserting ``(a)'' before ``The debtor shall--''; and
       (2) by adding at the end the following:
       ``(b) In addition to the requirements under subsection (a), 
     a debtor who is an individual shall file with the court--
       ``(1) a certificate from the approved nonprofit budget and 
     credit counseling agency that provided the debtor services 
     under section 109(h) describing the services provided to the 
     debtor; and
       ``(2) a copy of the debt repayment plan, if any, developed 
     under section 109(h) through the approved nonprofit budget 
     and credit counseling agency referred to in paragraph (1).''.
       (e) General Provisions.--
       (1) In general.--Chapter 1 of title 11, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 111. Nonprofit budget and credit counseling agencies; 
       financial management instructional courses

       ``(a) The clerk shall maintain a publicly available list 
     of--
       ``(1) nonprofit budget and credit counseling agencies that 
     provide 1 or more services described in section 109(h) 
     currently approved by the United States trustee (or the 
     bankruptcy administrator, if any); and
       ``(2) instructional courses concerning personal financial 
     management currently approved by the United States trustee 
     (or the bankruptcy administrator, if any), as applicable.
       ``(b) The United States trustee (or bankruptcy 
     administrator, if any) shall only approve a nonprofit budget 
     and credit counseling agency or an instructional course 
     concerning personal financial management as follows:
       ``(1) The United States trustee (or bankruptcy 
     administrator, if any) shall have thoroughly reviewed the 
     qualifications of the nonprofit budget and credit counseling 
     agency or of the provider of the instructional course under 
     the standards set forth in this section, and the services or 
     instructional courses that will be offered by such agency or 
     such provider, and may require such agency or such provider 
     that has sought approval to provide information with respect 
     to such review.
       ``(2) The United States trustee (or bankruptcy 
     administrator, if any) shall have determined that such agency 
     or such instructional course fully satisfies the applicable 
     standards set forth in this section.
       ``(3) If a nonprofit budget and credit counseling agency or 
     instructional course did not appear on the approved list for 
     the district under subsection (a) immediately before approval 
     under this section, approval under this subsection of such 
     agency or such instructional course shall be for a 
     probationary period not to exceed 6 months.
       ``(4) At the conclusion of the applicable probationary 
     period under paragraph (3), the United States trustee (or 
     bankruptcy administrator, if any) may only approve for an 
     additional 1-year period, and for successive 1-year periods 
     thereafter, an agency or instructional course that has 
     demonstrated during the probationary or applicable subsequent 
     period of approval that such agency or instructional course--
       ``(A) has met the standards set forth under this section 
     during such period; and
       ``(B) can satisfy such standards in the future.
       ``(5) Not later than 30 days after any final decision under 
     paragraph (4), an interested person may seek judicial review 
     of such decision in the appropriate district court of the 
     United States.
       ``(c)(1) The United States trustee (or the bankruptcy 
     administrator, if any) shall only approve a nonprofit budget 
     and credit counseling agency that demonstrates that it will 
     provide qualified counselors, maintain adequate provision for 
     safekeeping and payment of client funds, provide adequate 
     counseling with respect to client credit problems, and deal 
     responsibly and effectively with other matters relating to 
     the quality, effectiveness, and financial security of the 
     services it provides.
       ``(2) To be approved by the United States trustee (or the 
     bankruptcy administrator, if any), a nonprofit budget and 
     credit counseling agency shall, at a minimum--
       ``(A) have a board of directors the majority of which--
       ``(i) are not employed by such agency; and
       ``(ii) will not directly or indirectly benefit financially 
     from the outcome of the counseling services provided by such 
     agency;
       ``(B) if a fee is charged for counseling services, charge a 
     reasonable fee, and provide services without regard to 
     ability to pay the fee;
       ``(C) provide for safekeeping and payment of client funds, 
     including an annual audit of the trust accounts and 
     appropriate employee bonding;
       ``(D) provide full disclosures to a client, including 
     funding sources, counselor qualifications, possible impact on 
     credit reports, and any costs of such program that will be 
     paid by such client and how such costs will be paid;
       ``(E) provide adequate counseling with respect to a 
     client's credit problems that includes an analysis of such 
     client's current financial condition, factors that caused 
     such financial condition, and how such client can develop a 
     plan to respond to the problems without incurring negative 
     amortization of debt;
       ``(F) provide trained counselors who receive no commissions 
     or bonuses based on the outcome of the counseling services 
     provided by such agency, and who have adequate experience, 
     and have been adequately trained to provide counseling 
     services to individuals in financial difficulty, including 
     the matters described in subparagraph (E);
       ``(G) demonstrate adequate experience and background in 
     providing credit counseling; and
       ``(H) have adequate financial resources to provide 
     continuing support services for budgeting plans over the life 
     of any repayment plan.
       ``(d) The United States trustee (or the bankruptcy 
     administrator, if any) shall only approve an instructional 
     course concerning personal financial management--
       ``(1) for an initial probationary period under subsection 
     (b)(3) if the course will provide at a minimum--
       ``(A) trained personnel with adequate experience and 
     training in providing effective instruction and services;
       ``(B) learning materials and teaching methodologies 
     designed to assist debtors in

[[Page 563]]

     understanding personal financial management and that are 
     consistent with stated objectives directly related to the 
     goals of such instructional course;
       ``(C) adequate facilities situated in reasonably convenient 
     locations at which such instructional course is offered, 
     except that such facilities may include the provision of such 
     instructional course by telephone or through the Internet, if 
     such instructional course is effective; and
       ``(D) the preparation and retention of reasonable records 
     (which shall include the debtor's bankruptcy case number) to 
     permit evaluation of the effectiveness of such instructional 
     course, including any evaluation of satisfaction of 
     instructional course requirements for each debtor attending 
     such instructional course, which shall be available for 
     inspection and evaluation by the Executive Office for United 
     States Trustees, the United States trustee (or the bankruptcy 
     administrator, if any), or the chief bankruptcy judge for the 
     district in which such instructional course is offered; and
       ``(2) for any 1-year period if the provider thereof has 
     demonstrated that the course meets the standards of paragraph 
     (1) and, in addition--
       ``(A) has been effective in assisting a substantial number 
     of debtors to understand personal financial management; and
       ``(B) is otherwise likely to increase substantially the 
     debtor's understanding of personal financial management.
       ``(e) The district court may, at any time, investigate the 
     qualifications of a nonprofit budget and credit counseling 
     agency referred to in subsection (a), and request production 
     of documents to ensure the integrity and effectiveness of 
     such agency. The district court may, at any time, remove from 
     the approved list under subsection (a) a nonprofit budget and 
     credit counseling agency upon finding such agency does not 
     meet the qualifications of subsection (b).
       ``(f) The United States trustee (or the bankruptcy 
     administrator, if any) shall notify the clerk that a 
     nonprofit budget and credit counseling agency or an 
     instructional course is no longer approved, in which case the 
     clerk shall remove it from the list maintained under 
     subsection (a).
       ``(g)(1) No nonprofit budget and credit counseling agency 
     may provide to a credit reporting agency information 
     concerning whether a debtor has received or sought 
     instruction concerning personal financial management from 
     such agency.
       ``(2) A nonprofit budget and credit counseling agency that 
     willfully or negligently fails to comply with any requirement 
     under this title with respect to a debtor shall be liable for 
     damages in an amount equal to the sum of--
       ``(A) any actual damages sustained by the debtor as a 
     result of the violation; and
       ``(B) any court costs or reasonable attorneys' fees (as 
     determined by the court) incurred in an action to recover 
     those damages.''.
       (2) Clerical amendment.--The table of sections for chapter 
     1 of title 11, United States Code, is amended by adding at 
     the end the following:

``111. Nonprofit budget and credit counseling agencies; financial 
              management instructional courses.''.

       (f) Limitation.--Section 362 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(i) If a case commenced under chapter 7, 11, or 13 is 
     dismissed due to the creation of a debt repayment plan, for 
     purposes of subsection (c)(3), any subsequent case commenced 
     by the debtor under any such chapter shall not be presumed to 
     be filed not in good faith.
       ``(j) On request of a party in interest, the court shall 
     issue an order under subsection (c) confirming that the 
     automatic stay has been terminated.''.

     SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY EXPENSES.

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

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

     SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.

       (a) Reduction of Claim.--Section 502 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(k)(1) The court, on the motion of the debtor and after a 
     hearing, may reduce a claim filed under this section based in 
     whole on an unsecured consumer debt by not more than 20 
     percent of the claim, if--
       ``(A) the claim was filed by a creditor who unreasonably 
     refused to negotiate a reasonable alternative repayment 
     schedule proposed on behalf of the debtor by an approved 
     nonprofit budget and credit counseling agency described in 
     section 111;
       ``(B) the offer of the debtor under subparagraph (A)--
       ``(i) was made at least 60 days before the date of the 
     filing of the petition; and
       ``(ii) provided for payment of at least 60 percent of the 
     amount of the debt over a period not to exceed the repayment 
     period of the loan, or a reasonable extension thereof; and
       ``(C) no part of the debt under the alternative repayment 
     schedule is nondischargeable.
       ``(2) The debtor shall have the burden of proving, by clear 
     and convincing evidence, that--
       ``(A) the creditor unreasonably refused to consider the 
     debtor's proposal; and
       ``(B) the proposed alternative repayment schedule was made 
     prior to expiration of the 60-day period specified in 
     paragraph (1)(B)(i).''.
       (b) Limitation on Avoidability.--Section 547 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(h) The trustee may not avoid a transfer if such transfer 
     was made as a part of an alternative repayment schedule 
     between the debtor and any creditor of the debtor created by 
     an approved nonprofit budget and credit counseling agency.''.

     SEC. 202. EFFECT OF DISCHARGE.

       Section 524 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(i) The willful failure of a creditor to credit payments 
     received under a plan confirmed under this title, unless the 
     order confirming the plan is revoked, the plan is in default, 
     or the creditor has not received payments required to be made 
     under the plan in the manner required by the plan (including 
     crediting the amounts required under the plan), shall 
     constitute a violation of an injunction under subsection 
     (a)(2) if the act of the creditor to collect and failure to 
     credit payments in the manner required by the plan caused 
     material injury to the debtor.
       ``(j) Subsection (a)(2) does not operate as an injunction 
     against an act by a creditor that is the holder of a secured 
     claim, if--
       ``(1) such creditor retains a security interest in real 
     property that is the principal residence of the debtor;
       ``(2) such act is in the ordinary course of business 
     between the creditor and the debtor; and
       ``(3) such act is limited to seeking or obtaining periodic 
     payments associated with a valid security interest in lieu of 
     pursuit of in rem relief to enforce the lien.''.

     SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION AGREEMENT 
                   PRACTICES.

       (a) In General.--Section 524 of title 11, United States 
     Code, as amended section 202, is amended--
       (1) in subsection (c), by striking paragraph (2) and 
     inserting the following:
       ``(2) the debtor received the disclosures described in 
     subsection (k) at or before the time at which the debtor 
     signed the agreement;''; and
       (2) by adding at the end the following:
       ``(k)(1) The disclosures required under subsection (c)(2) 
     shall consist of the disclosure statement described in 
     paragraph (3), completed as required in that paragraph, 
     together with the agreement specified in subsection (c), 
     statement, declaration, motion and order described, 
     respectively, in paragraphs (4) through (8), and shall be the 
     only disclosures required in connection with entering into 
     such agreement.
       ``(2) Disclosures made under paragraph (1) shall be made 
     clearly and conspicuously and in writing. The terms `Amount 
     Reaffirmed' and `Annual Percentage Rate' shall be disclosed 
     more conspicuously than other terms, data or information 
     provided in connection with this disclosure, except that the 
     phrases `Before agreeing to reaffirm a debt, review these 
     important disclosures' and `Summary of Reaffirmation 
     Agreement' may be equally conspicuous. Disclosures may be 
     made in a different order and may use terminology different 
     from that set forth in paragraphs (2) through (8), except 
     that the terms `Amount Reaffirmed' and `Annual Percentage 
     Rate' must be used where indicated.
       ``(3) The disclosure statement required under this 
     paragraph shall consist of the following:
       ``(A) The statement: `Part A: Before agreeing to reaffirm a 
     debt, review these important disclosures:';
       ``(B) Under the heading `Summary of Reaffirmation 
     Agreement', the statement: `This Summary is made pursuant to 
     the requirements of the Bankruptcy Code';
       ``(C) The `Amount Reaffirmed', using that term, which shall 
     be--
       ``(i) the total amount of debt that the debtor agrees to 
     reaffirm by entering into an agreement of the kind specified 
     in subsection (c), and
       ``(ii) the total of any fees and costs accrued as of the 
     date of the disclosure statement, related to such total 
     amount.
       ``(D) In conjunction with the disclosure of the `Amount 
     Reaffirmed', the statements--
       ``(i) `The amount of debt you have agreed to reaffirm'; and
       ``(ii) `Your credit agreement may obligate you to pay 
     additional amounts which may come due after the date of this 
     disclosure. Consult your credit agreement.'.
       ``(E) The `Annual Percentage Rate', using that term, which 
     shall be disclosed as--
       ``(i) if, at the time the petition is filed, the debt is an 
     extension of credit under an open

[[Page 564]]

     end credit plan, as the terms `credit' and `open end credit 
     plan' are defined in section 103 of the Truth in Lending Act, 
     then--
       ``(I) the annual percentage rate determined under 
     paragraphs (5) and (6) of section 127(b) of the Truth in 
     Lending Act, as applicable, as disclosed to the debtor in the 
     most recent periodic statement prior to entering into an 
     agreement of the kind specified in subsection (c) or, if no 
     such periodic statement has been given to the debtor during 
     the prior 6 months, the annual percentage rate as it would 
     have been so disclosed at the time the disclosure statement 
     is given to the debtor, or to the extent this annual 
     percentage rate is not readily available or not applicable, 
     then
       ``(II) the simple interest rate applicable to the amount 
     reaffirmed as of the date the disclosure statement is given 
     to the debtor, or if different simple interest rates apply to 
     different balances, the simple interest rate applicable to 
     each such balance, identifying the amount of each such 
     balance included in the amount reaffirmed, or
       ``(III) if the entity making the disclosure elects, to 
     disclose the annual percentage rate under subclause (I) and 
     the simple interest rate under subclause (II);
       ``(ii) if, at the time the petition is filed, the debt is 
     an extension of credit other than under an open end credit 
     plan, as the terms `credit' and `open end credit plan' are 
     defined in section 103 of the Truth in Lending Act, then--
       ``(I) the annual percentage rate under section 128(a)(4) of 
     the Truth in Lending Act, as disclosed to the debtor in the 
     most recent disclosure statement given to the debtor prior to 
     the entering into an agreement of the kind specified in 
     subsection (c) with respect to the debt, or, if no such 
     disclosure statement was given to the debtor, the annual 
     percentage rate as it would have been so disclosed at the 
     time the disclosure statement is given to the debtor, or to 
     the extent this annual percentage rate is not readily 
     available or not applicable, then
       ``(II) the simple interest rate applicable to the amount 
     reaffirmed as of the date the disclosure statement is given 
     to the debtor, or if different simple interest rates apply to 
     different balances, the simple interest rate applicable to 
     each such balance, identifying the amount of such balance 
     included in the amount reaffirmed, or
       ``(III) if the entity making the disclosure elects, to 
     disclose the annual percentage rate under (I) and the simple 
     interest rate under (II).
       ``(F) If the underlying debt transaction was disclosed as a 
     variable rate transaction on the most recent disclosure given 
     under the Truth in Lending Act, by stating `The interest rate 
     on your loan may be a variable interest rate which changes 
     from time to time, so that the annual percentage rate 
     disclosed here may be higher or lower.'.
       ``(G) If the debt is secured by a security interest which 
     has not been waived in whole or in part or determined to be 
     void by a final order of the court at the time of the 
     disclosure, by disclosing that a security interest or lien in 
     goods or property is asserted over some or all of the debts 
     the debtor is reaffirming and listing the items and their 
     original purchase price that are subject to the asserted 
     security interest, or if not a purchase-money security 
     interest then listing by items or types and the original 
     amount of the loan.
       ``(H) At the election of the creditor, a statement of the 
     repayment schedule using 1 or a combination of the 
     following--
       ``(i) by making the statement: `Your first payment in the 
     amount of $___ is due on ___ but the future payment amount 
     may be different. Consult your reaffirmation agreement or 
     credit agreement, as applicable.', and stating the amount of 
     the first payment and the due date of that payment in the 
     places provided;
       ``(ii) by making the statement: `Your payment schedule will 
     be:', and describing the repayment schedule with the number, 
     amount, and due dates or period of payments scheduled to 
     repay the debts reaffirmed to the extent then known by the 
     disclosing party; or
       ``(iii) by describing the debtor's repayment obligations 
     with reasonable specificity to the extent then known by the 
     disclosing party.
       ``(I) The following statement: `Note: When this disclosure 
     refers to what a creditor ``may'' do, it does not use the 
     word ``may'' to give the creditor specific permission. The 
     word ``may'' is used to tell you what might occur if the law 
     permits the creditor to take the action. If you have 
     questions about your reaffirming a debt or what the law 
     requires, consult with the attorney who helped you negotiate 
     this agreement reaffirming a debt. If you don't have an 
     attorney helping you, the judge will explain the effect of 
     your reaffirming a debt when the hearing on the reaffirmation 
     agreement is held.'.
       ``(J)(i) The following additional statements:
       ```Reaffirming a debt is a serious financial decision. The 
     law requires you to take certain steps to make sure the 
     decision is in your best interest. If these steps are not 
     completed, the reaffirmation agreement is not effective, even 
     though you have signed it.
       ```1. Read the disclosures in this Part A carefully. 
     Consider the decision to reaffirm carefully. Then, if you 
     want to reaffirm, sign the reaffirmation agreement in Part B 
     (or you may use a separate agreement you and your creditor 
     agree on).
       ```2. Complete and sign Part D and be sure you can afford 
     to make the payments you are agreeing to make and have 
     received a copy of the disclosure statement and a completed 
     and signed reaffirmation agreement.
       ```3. If you were represented by an attorney during the 
     negotiation of your reaffirmation agreement, the attorney 
     must have signed the certification in Part C.
       ```4. If you were not represented by an attorney during the 
     negotiation of your reaffirmation agreement, you must have 
     completed and signed Part E.
       ```5. The original of this disclosure must be filed with 
     the court by you or your creditor. If a separate 
     reaffirmation agreement (other than the one in Part B) has 
     been signed, it must be attached.
       ```6. If you were represented by an attorney during the 
     negotiation of your reaffirmation agreement, your 
     reaffirmation agreement becomes effective upon filing with 
     the court unless the reaffirmation is presumed to be an undue 
     hardship as explained in Part D.
       ```7. If you were not represented by an attorney during the 
     negotiation of your reaffirmation agreement, it will not be 
     effective unless the court approves it. The court will notify 
     you of the hearing on your reaffirmation agreement. You must 
     attend this hearing in bankruptcy court where the judge will 
     review your reaffirmation agreement. The bankruptcy court 
     must approve your reaffirmation agreement as consistent with 
     your best interests, except that no court approval is 
     required if your reaffirmation agreement is for a consumer 
     debt secured by a mortgage, deed of trust, security deed, or 
     other lien on your real property, like your home.
       ```Your right to rescind (cancel) your reaffirmation 
     agreement. You may rescind (cancel) your reaffirmation 
     agreement at any time before the bankruptcy court enters a 
     discharge order, or before the expiration of the 60-day 
     period that begins on the date your reaffirmation agreement 
     is filed with the court, whichever occurs later. To rescind 
     (cancel) your reaffirmation agreement, you must notify the 
     creditor that your reaffirmation agreement is rescinded (or 
     canceled).
       ```What are your obligations if you reaffirm the debt? A 
     reaffirmed debt remains your personal legal obligation. It is 
     not discharged in your bankruptcy case. That means that if 
     you default on your reaffirmed debt after your bankruptcy 
     case is over, your creditor may be able to take your property 
     or your wages. Otherwise, your obligations will be determined 
     by the reaffirmation agreement which may have changed the 
     terms of the original agreement. For example, if you are 
     reaffirming an open end credit agreement, the creditor may be 
     permitted by that agreement or applicable law to change the 
     terms of that agreement in the future under certain 
     conditions.
       ```Are you required to enter into a reaffirmation agreement 
     by any law? No, you are not required to reaffirm a debt by 
     any law. Only agree to reaffirm a debt if it is in your best 
     interest. Be sure you can afford the payments you agree to 
     make.
       ```What if your creditor has a security interest or lien? 
     Your bankruptcy discharge does not eliminate any lien on your 
     property. A ``lien'' is often referred to as a security 
     interest, deed of trust, mortgage or security deed. Even if 
     you do not reaffirm and your personal liability on the debt 
     is discharged, because of the lien your creditor may still 
     have the right to take the security property if you do not 
     pay the debt or default on it. If the lien is on an item of 
     personal property that is exempt under your State's law or 
     that the trustee has abandoned, you may be able to redeem the 
     item rather than reaffirm the debt. To redeem, you make a 
     single payment to the creditor equal to the current value of 
     the security property, as agreed by the parties or determined 
     by the court.'.
       ``(ii) In the case of a reaffirmation under subsection 
     (m)(2), numbered paragraph 6 in the disclosures required by 
     clause (i) of this subparagraph shall read as follows:
       ```6. If you were represented by an attorney during the 
     negotiation of your reaffirmation agreement, your 
     reaffirmation agreement becomes effective upon filing with 
     the court.'.
       ``(4) The form of such agreement required under this 
     paragraph shall consist of the following:
       ```Part B: Reaffirmation Agreement. I (we) agree to 
     reaffirm the debts arising under the credit agreement 
     described below.
       ```Brief description of credit agreement:
       ```Description of any changes to the credit agreement made 
     as part of this reaffirmation agreement:
       ```Signature:  Date:
       ```Borrower:
       ```Co-borrower, if also reaffirming these debts:
       ```Accepted by creditor:
       ```Date of creditor acceptance:'.
       ``(5) The declaration shall consist of the following:
       ``(A) The following certification:
       ```Part C: Certification by Debtor's Attorney (If Any).

[[Page 565]]

       ```I hereby certify that (1) this agreement represents a 
     fully informed and voluntary agreement by the debtor; (2) 
     this agreement does not impose an undue hardship on the 
     debtor or any dependent of the debtor; and (3) I have fully 
     advised the debtor of the legal effect and consequences of 
     this agreement and any default under this agreement.
       ```Signature of Debtor's Attorney:  Date:'.
       ``(B) If a presumption of undue hardship has been 
     established with respect to such agreement, such 
     certification shall state that in the opinion of the 
     attorney, the debtor is able to make the payment.
       ``(C) In the case of a reaffirmation agreement under 
     subsection (m)(2), subparagraph (B) is not applicable.
       ``(6)(A) The statement in support of such agreement, which 
     the debtor shall sign and date prior to filing with the 
     court, shall consist of the following:
       ```Part D: Debtor's Statement in Support of Reaffirmation 
     Agreement.
       ```1. I believe this reaffirmation agreement will not 
     impose an undue hardship on my dependents or me. I can afford 
     to make the payments on the reaffirmed debt because my 
     monthly income (take home pay plus any other income received) 
     is $___, and my actual current monthly expenses including 
     monthly payments on post-bankruptcy debt and other 
     reaffirmation agreements total $___, leaving $___ to make the 
     required payments on this reaffirmed debt. I understand that 
     if my income less my monthly expenses does not leave enough 
     to make the payments, this reaffirmation agreement is 
     presumed to be an undue hardship on me and must be reviewed 
     by the court. However, this presumption may be overcome if I 
     explain to the satisfaction of the court how I can afford to 
     make the payments here: ___.
       ```2. I received a copy of the Reaffirmation Disclosure 
     Statement in Part A and a completed and signed reaffirmation 
     agreement.'.
       ``(B) Where the debtor is represented by an attorney and is 
     reaffirming a debt owed to a creditor defined in section 
     19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of 
     support of the reaffirmation agreement, which the debtor 
     shall sign and date prior to filing with the court, shall 
     consist of the following:
       ```I believe this reaffirmation agreement is in my 
     financial interest. I can afford to make the payments on the 
     reaffirmed debt. I received a copy of the Reaffirmation 
     Disclosure Statement in Part A and a completed and signed 
     reaffirmation agreement.'.
       ``(7) The motion that may be used if approval of such 
     agreement by the court is required in order for it to be 
     effective, shall be signed and dated by the movant and shall 
     consist of the following:
       ```Part E: Motion for Court Approval (To be completed only 
     if the debtor is not represented by an attorney.). I (we), 
     the debtor(s), affirm the following to be true and correct:
       ```I am not represented by an attorney in connection with 
     this reaffirmation agreement.
       ```I believe this reaffirmation agreement is in my best 
     interest based on the income and expenses I have disclosed in 
     my Statement in Support of this reaffirmation agreement, and 
     because (provide any additional relevant reasons the court 
     should consider):
       ```Therefore, I ask the court for an order approving this 
     reaffirmation agreement.'.
       ``(8) The court order, which may be used to approve such 
     agreement, shall consist of the following:
       ```Court Order: The court grants the debtor's motion and 
     approves the reaffirmation agreement described above.'.
       ``(l) Notwithstanding any other provision of this title the 
     following shall apply:
       ``(1) A creditor may accept payments from a debtor before 
     and after the filing of an agreement of the kind specified in 
     subsection (c) with the court.
       ``(2) A creditor may accept payments from a debtor under 
     such agreement that the creditor believes in good faith to be 
     effective.
       ``(3) The requirements of subsections (c)(2) and (k) shall 
     be satisfied if disclosures required under those subsections 
     are given in good faith.
       ``(m)(1) Until 60 days after an agreement of the kind 
     specified in subsection (c) is filed with the court (or such 
     additional period as the court, after notice and a hearing 
     and for cause, orders before the expiration of such period), 
     it shall be presumed that such agreement is an undue hardship 
     on the debtor if the debtor's monthly income less the 
     debtor's monthly expenses as shown on the debtor's completed 
     and signed statement in support of such agreement required 
     under subsection (k)(6)(A) is less than the scheduled 
     payments on the reaffirmed debt. This presumption shall be 
     reviewed by the court. The presumption may be rebutted in 
     writing by the debtor if the statement includes an 
     explanation that identifies additional sources of funds to 
     make the payments as agreed upon under the terms of such 
     agreement. If the presumption is not rebutted to the 
     satisfaction of the court, the court may disapprove such 
     agreement. No agreement shall be disapproved without notice 
     and a hearing to the debtor and creditor, and such hearing 
     shall be concluded before the entry of the debtor's 
     discharge.
       ``(2) This subsection does not apply to reaffirmation 
     agreements where the creditor is a credit union, as defined 
     in section 19(b)(1)(A)(iv) of the Federal Reserve Act.''.
       (b) Law Enforcement.--
       (1) In general.--Chapter 9 of title 18, United States Code, 
     is amended by adding at the end the following:

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

       ``(a) In General.--The Attorney General of the United 
     States shall designate the individuals described in 
     subsection (b) to have primary responsibility in carrying out 
     enforcement activities in addressing violations of section 
     152 or 157 relating to abusive reaffirmations of debt. In 
     addition to addressing the violations referred to in the 
     preceding sentence, the individuals described under 
     subsection (b) shall address violations of section 152 or 157 
     relating to materially fraudulent statements in bankruptcy 
     schedules that are intentionally false or intentionally 
     misleading.
       ``(b) United States Attorneys and Agents of the Federal 
     Bureau of Investigation.--The individuals referred to in 
     subsection (a) are--
       ``(1) the United States attorney for each judicial district 
     of the United States; and
       ``(2) an agent of the Federal Bureau of Investigation for 
     each field office of the Federal Bureau of Investigation.
       ``(c) Bankruptcy Investigations.--Each United States 
     attorney designated under this section shall, in addition to 
     any other responsibilities, have primary responsibility for 
     carrying out the duties of a United States attorney under 
     section 3057.
       ``(d) Bankruptcy Procedures.--The bankruptcy courts shall 
     establish procedures for referring any case that may contain 
     a materially fraudulent statement in a bankruptcy schedule to 
     the individuals designated under this section.''.
       (2) Clerical amendment.--The table of sections for chapter 
     9 of title 18, United States Code, is amended by adding at 
     the end the following:

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

     SEC. 204. PRESERVATION OF CLAIMS AND DEFENSES UPON SALE OF 
                   PREDATORY LOANS.

       Section 363 of title 11, United States Code, is amended--
       (1) by redesignating subsection (o) as subsection (p), and
       (2) by inserting after subsection (n) the following:
       ``(o) Notwithstanding subsection (f), if a person purchases 
     any interest in a consumer credit transaction that is subject 
     to the Truth in Lending Act or any interest in a consumer 
     credit contract (as defined in section 433.1 of title 16 of 
     the Code of Federal Regulations (January 1, 2002), as amended 
     from time to time), and if such interest is purchased through 
     a sale under this section, then such person shall remain 
     subject to all claims and defenses that are related to such 
     consumer credit transaction or such consumer credit contract, 
     to the same extent as such person would be subject to such 
     claims and defenses of the consumer had such interest been 
     purchased at a sale not under this section.''.

     SEC. 205. GAO STUDY AND REPORT ON REAFFIRMATION AGREEMENT 
                   PROCESS.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of the reaffirmation agreement process 
     that occurs under title 11 of the United States Code, to 
     determine the overall treatment of consumers within the 
     context of such process, and shall include in such study 
     consideration of--
       (1) the policies and activities of creditors with respect 
     to reaffirmation agreements; and
       (2) whether consumers are fully, fairly, and consistently 
     informed of their rights pursuant to such title.
       (b) Report to the Congress.--Not later than 18 months after 
     the date of the enactment of this Act, the Comptroller 
     General shall submit to the President pro tempore of the 
     Senate and the Speaker of the House of Representatives a 
     report on the results of the study conducted under subsection 
     (a), together with recommendations for legislation (if any) 
     to address any abusive or coercive tactics found in 
     connection with the reaffirmation agreement process that 
     occurs under title 11 of the United States Code.

                   Subtitle B--Priority Child Support

     SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

       Section 101 of title 11, United States Code, is amended--
       (1) by striking paragraph (12A); and
       (2) by inserting after paragraph (14) the following:
       ``(14A) `domestic support obligation' means a debt that 
     accrues before or after the date of the order for relief in a 
     case under this title, including interest that accrues on 
     that debt as provided under applicable nonbankruptcy law 
     notwithstanding any other provision of this title, that is--
       ``(A) owed to or recoverable by--

[[Page 566]]

       ``(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 the date of the order for relief in a case under this 
     title, by reason of applicable provisions of--
       ``(i) a separation agreement, divorce decree, or property 
     settlement agreement;
       ``(ii) an order of a court of record; or
       ``(iii) a determination made in accordance with applicable 
     nonbankruptcy law by a governmental unit; and
       ``(D) not assigned to a nongovernmental entity, unless that 
     obligation is assigned voluntarily by the spouse, former 
     spouse, child of the debtor, or such child's parent, legal 
     guardian, or responsible relative for the purpose of 
     collecting the debt;''.

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

       Section 507(a) of title 11, United States Code, is 
     amended--
       (1) by striking paragraph (7);
       (2) by redesignating paragraphs (1) through (6) as 
     paragraphs (2) through (7), respectively;
       (3) in paragraph (2), as so redesignated, by striking 
     ``First'' and inserting ``Second'';
       (4) in paragraph (3), as so redesignated, by striking 
     ``Second'' and inserting ``Third'';
       (5) in paragraph (4), as so redesignated--
       (A) by striking ``Third'' and inserting ``Fourth''; and
       (B) by striking the semicolon at the end and inserting a 
     period;
       (6) in paragraph (5), as so redesignated, by striking 
     ``Fourth'' and inserting ``Fifth'';
       (7) in paragraph (6), as so redesignated, by striking 
     ``Fifth'' and inserting ``Sixth'';
       (8) in paragraph (7), as so redesignated, by striking 
     ``Sixth'' and inserting ``Seventh''; and
       (9) by inserting before paragraph (2), as so redesignated, 
     the following:
       ``(1) First:
       ``(A) Allowed unsecured claims for domestic support 
     obligations that, as of the date of the filing of the 
     petition in a case under this title, are owed to or 
     recoverable by a spouse, former spouse, or child of the 
     debtor, or such child's parent, legal guardian, or 
     responsible relative, without regard to whether the claim is 
     filed by such person or is filed by a governmental unit on 
     behalf of such person, on the condition that funds received 
     under this paragraph by a governmental unit under this title 
     after the date of the filing of the petition shall be applied 
     and distributed in accordance with applicable nonbankruptcy 
     law.
       ``(B) Subject to claims under subparagraph (A), allowed 
     unsecured claims for domestic support obligations that, as of 
     the date of the filing of the petition, are assigned by a 
     spouse, former spouse, child of the debtor, or such child's 
     parent, legal guardian, or responsible relative to a 
     governmental unit (unless such obligation is assigned 
     voluntarily by the spouse, former spouse, child, parent, 
     legal guardian, or responsible relative of the child for the 
     purpose of collecting the debt) or are owed directly to or 
     recoverable by a governmental unit under applicable 
     nonbankruptcy law, on the condition that funds received under 
     this paragraph by a governmental unit under this title after 
     the date of the filing of the petition be applied and 
     distributed in accordance with applicable nonbankruptcy law.
       ``(C) If a trustee is appointed or elected under section 
     701, 702, 703, 1104, 1202, or 1302, the administrative 
     expenses of the trustee allowed under paragraphs (1)(A), (2), 
     and (6) of section 503(b) shall be paid before payment of 
     claims under subparagraphs (A) and (B), to the extent that 
     the trustee administers assets that are otherwise available 
     for the payment of such claims.''.

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

       Title 11, United States Code, is amended--
       (1) in section 1129(a), by adding at the end the following:
       ``(14) If the debtor is required by a judicial or 
     administrative order, or by statute, to pay a domestic 
     support obligation, the debtor has paid all amounts payable 
     under such order or such statute for such obligation that 
     first become payable after the date of the filing of the 
     petition.'';
       (2) in section 1208(c)--
       (A) in paragraph (8), by striking ``or'' at the end;
       (B) in paragraph (9), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(10) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date of the 
     filing of the petition.'';
       (3) in section 1222(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period 
     beginning on the date that the first payment is due under the 
     plan will be applied to make payments under the plan.'';
       (4) in section 1222(b)--
       (A) 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 1228(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims;'';
       (5) in section 1225(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) the debtor has paid all amounts that are required to 
     be paid under a domestic support obligation and that first 
     become payable after the date of the filing of the petition 
     if the debtor is required by a judicial or administrative 
     order, or by statute, to pay such domestic support 
     obligation.'';
       (6) in section 1228(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order, or by 
     statute, to pay a domestic support obligation, after such 
     debtor certifies that all amounts payable under such order or 
     such statute that are due on or before the date of the 
     certification (including amounts due before the petition was 
     filed, but only to the extent provided for by the plan) have 
     been paid'' after ``completion by the debtor of all payments 
     under the plan'';
       (7) in section 1307(c)--
       (A) in paragraph (9), by striking ``or'' at the end;
       (B) in paragraph (10), by striking the period at the end 
     and inserting ``; or''; and
       (C) by adding at the end the following:
       ``(11) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date of the 
     filing of the petition.'';
       (8) in section 1322(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period 
     beginning on the date that the first payment is due under the 
     plan will be applied to make payments under the plan.'';
       (9) in section 1322(b)--
       (A) in paragraph (9), by striking ``; and'' and inserting a 
     semicolon;
       (B) by redesignating paragraph (10) as paragraph (11); and
       (C) inserting after paragraph (9) the following:
       ``(10) provide for the payment of interest accruing after 
     the date of the filing of the petition on unsecured claims 
     that are nondischargeable under section 1328(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims; 
     and'';
       (10) in section 1325(a), as amended by section 102, by 
     inserting after paragraph (7) the following:
       ``(8) the debtor has paid all amounts that are required to 
     be paid under a domestic support obligation and that first 
     become payable after the date of the filing of the petition 
     if the debtor is required by a judicial or administrative 
     order, or by statute, to pay such domestic support 
     obligation; and'';
       (11) in section 1328(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order, or by 
     statute, to pay a domestic support obligation, after such 
     debtor certifies that all amounts payable under such order or 
     such statute that are due on or before the date of the 
     certification (including amounts due before the petition was 
     filed, but only to the extent provided for by the plan) have 
     been paid'' after ``completion by the debtor of all payments 
     under the plan''.

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

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

[[Page 567]]

       ``(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) of the collection of a domestic support obligation 
     from property that is not property of the estate;
       ``(C) with respect to the withholding of income that is 
     property of the estate or property of the debtor for payment 
     of a domestic support obligation under a judicial or 
     administrative order or a statute;
       ``(D) of the withholding, suspension, or restriction of a 
     driver's license, a professional or occupational license, or 
     a recreational license, under State law, as specified in 
     section 466(a)(16) of the Social Security Act;
       ``(E) of the reporting of overdue support owed by a parent 
     to any consumer reporting agency as specified in section 
     466(a)(7) of the Social Security Act;
       ``(F) of the interception of a tax refund, as specified in 
     sections 464 and 466(a)(3) of the Social Security Act or 
     under an analogous State law; or
       ``(G) of the enforcement of a medical obligation, as 
     specified under title IV of the Social Security Act;''.

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

       Section 523 of title 11, United States Code, is amended--
       (1) in subsection (a)--
       (A) by striking paragraph (5) and inserting the following:
       ``(5) for a domestic support obligation;''; and
       (B) by striking paragraph (18);
       (2) in subsection (c), by striking ``(6), or (15)'' each 
     place it appears and inserting ``or (6)''; and
       (3) in paragraph (15), as added by Public Law 103-394 (108 
     Stat. 4133)--
       (A) by inserting ``to a spouse, former spouse, or child of 
     the debtor and'' before ``not of the kind'';
       (B) by inserting ``or'' after ``court of record,''; and
       (C) by striking ``unless--'' and all that follows through 
     the end of the paragraph and inserting a semicolon.

     SEC. 216. CONTINUED LIABILITY OF PROPERTY.

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

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

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

     SEC. 218. DISPOSABLE INCOME DEFINED.

       Section 1225(b)(2)(A) of title 11, United States Code, is 
     amended by inserting ``or for a domestic support obligation 
     that first becomes payable after the date of the filing of 
     the petition'' after ``dependent of the debtor''.

     SEC. 219. COLLECTION OF CHILD SUPPORT.

       (a) Duties of Trustee Under Chapter 7.--Section 704 of 
     title 11, United States Code, as amended by section 102, is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (8), by striking ``and'' at the end;
       (B) in paragraph (9), by striking the period and inserting 
     a semicolon; and
       (C) by adding at the end the following:
       ``(10) if with respect to the debtor there is a claim for a 
     domestic support obligation, provide the applicable notice 
     specified in subsection (c); and''; and
       (2) by adding at the end the following:
       ``(c)(1) In a case described in subsection (a)(10) to which 
     subsection (a)(10) applies, the trustee shall--
       ``(A)(i) provide written notice to the holder of the claim 
     described in subsection (a)(10) of such claim and of the 
     right of such holder to use the services of the State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act for the State in which such 
     holder resides, for assistance in collecting child support 
     during and after the case under this title;
       ``(ii) include in the notice provided under clause (i) the 
     address and telephone number of such State child support 
     enforcement agency; and
       ``(iii) include in the notice provided under clause (i) an 
     explanation of the rights of such holder to payment of such 
     claim under this chapter;
       ``(B)(i) provide written notice to such State child support 
     enforcement agency of such claim; and
       ``(ii) include in the notice provided under clause (i) the 
     name, address, and telephone number of such holder; and
       ``(C) at such time as the debtor is granted a discharge 
     under section 727, provide written notice to such holder and 
     to such State child support enforcement agency of--
       ``(i) the granting of the discharge;
       ``(ii) the last recent known address of the debtor;
       ``(iii) the last recent known name and address of the 
     debtor's employer; and
       ``(iv) the name of each creditor that holds a claim that--
       ``(I) is not discharged under paragraph (2), (4), or (14A) 
     of section 523(a); or
       ``(II) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) The holder of a claim described in subsection 
     (a)(10) or the State child support enforcement agency of the 
     State in which such holder resides may request from a 
     creditor described in paragraph (1)(C)(iv) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable by reason of making such 
     disclosure.''.
       (b) Duties of Trustee Under Chapter 11.--Section 1106 of 
     title 11, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (6), by striking ``and'' at the end;
       (B) in paragraph (7), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(8) if with respect to the debtor there is a claim for a 
     domestic support obligation, provide the applicable notice 
     specified in subsection (c).''; and
       (2) by adding at the end the following:
       ``(c)(1) In a case described in subsection (a)(8) to which 
     subsection (a)(8) applies, the trustee shall--
       ``(A)(i) provide written notice to the holder of the claim 
     described in subsection (a)(8) of such claim and of the right 
     of such holder to use the services of the State child support 
     enforcement agency established under sections 464 and 466 of 
     the Social Security Act for the State in which such holder 
     resides, for assistance in collecting child support during 
     and after the case under this title; and
       ``(ii) include in the notice required by clause (i) the 
     address and telephone number of such State child support 
     enforcement agency;
       ``(B)(i) provide written notice to such State child support 
     enforcement agency of such claim; and
       ``(ii) include in the notice required by clause (i) the 
     name, address, and telephone number of such holder; and
       ``(C) at such time as the debtor is granted a discharge 
     under section 1141, provide written notice to such holder and 
     to such State child support enforcement agency of--
       ``(i) the granting of the discharge;
       ``(ii) the last recent known address of the debtor;
       ``(iii) the last recent known name and address of the 
     debtor's employer; and
       ``(iv) the name of each creditor that holds a claim that--
       ``(I) is not discharged under paragraph (2), (4), or (14A) 
     of section 523(a); or
       ``(II) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) The holder of a claim described in subsection 
     (a)(8) or the State child enforcement support agency of the 
     State in which such holder resides may request from a 
     creditor described in paragraph (1)(C)(iv) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable by reason of making such 
     disclosure.''.
       (c) Duties of Trustee Under Chapter 12.--Section 1202 of 
     title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(6) if with respect to the debtor there is a claim for a 
     domestic support obligation, provide the applicable notice 
     specified in subsection (c).''; and
       (2) by adding at the end the following:
       ``(c)(1) In a case described in subsection (b)(6) to which 
     subsection (b)(6) applies, the trustee shall--
       ``(A)(i) provide written notice to the holder of the claim 
     described in subsection (b)(6) of such claim and of the right 
     of such holder to use the services of the State child support 
     enforcement agency established under sections 464 and 466 of 
     the Social Security Act for the State in which such holder 
     resides, for assistance in collecting child support during 
     and after the case under this title; and
       ``(ii) include in the notice provided under clause (i) the 
     address and telephone number of such State child support 
     enforcement agency;
       ``(B)(i) provide written notice to such State child support 
     enforcement agency of such claim; and

[[Page 568]]

       ``(ii) include in the notice provided under clause (i) the 
     name, address, and telephone number of such holder; and
       ``(C) at such time as the debtor is granted a discharge 
     under section 1228, provide written notice to such holder and 
     to such State child support enforcement agency of--
       ``(i) the granting of the discharge;
       ``(ii) the last recent known address of the debtor;
       ``(iii) the last recent known name and address of the 
     debtor's employer; and
       ``(iv) the name of each creditor that holds a claim that--
       ``(I) is not discharged under paragraph (2), (4), or (14A) 
     of section 523(a); or
       ``(II) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) The holder of a claim described in subsection 
     (b)(6) or the State child support enforcement agency of the 
     State in which such holder resides may request from a 
     creditor described in paragraph (1)(C)(iv) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable by reason of making that 
     disclosure.''.
       (d) Duties of Trustee Under Chapter 13.--Section 1302 of 
     title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(6) if with respect to the debtor there is a claim for a 
     domestic support obligation, provide the applicable notice 
     specified in subsection (d).''; and
       (2) by adding at the end the following:
       ``(d)(1) In a case described in subsection (b)(6) to which 
     subsection (b)(6) applies, the trustee shall--
       ``(A)(i) provide written notice to the holder of the claim 
     described in subsection (b)(6) of such claim and of the right 
     of such holder to use the services of the State child support 
     enforcement agency established under sections 464 and 466 of 
     the Social Security Act for the State in which such holder 
     resides, for assistance in collecting child support during 
     and after the case under this title; and
       ``(ii) include in the notice provided under clause (i) the 
     address and telephone number of such State child support 
     enforcement agency;
       ``(B)(i) provide written notice to such State child support 
     enforcement agency of such claim; and
       ``(ii) include in the notice provided under clause (i) the 
     name, address, and telephone number of such holder; and
       ``(C) at such time as the debtor is granted a discharge 
     under section 1328, provide written notice to such holder and 
     to such State child support enforcement agency of--
       ``(i) the granting of the discharge;
       ``(ii) the last recent known address of the debtor;
       ``(iii) the last recent known name and address of the 
     debtor's employer; and
       ``(iv) the name of each creditor that holds a claim that--
       ``(I) is not discharged under paragraph (2) or (4) of 
     section 523(a); or
       ``(II) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) The holder of a claim described in subsection 
     (b)(6) or the State child support enforcement agency of the 
     State in which such holder resides may request from a 
     creditor described in paragraph (1)(C)(iv) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable by reason of making that 
     disclosure.''.

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

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

                 Subtitle C--Other Consumer Protections

     SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY 
                   FILINGS.

       Section 110 of title 11, United States Code, is amended--
       (1) in subsection (a)(1), by striking ``or an employee of 
     an attorney'' and inserting ``for the debtor or an employee 
     of such attorney under the direct supervision of such 
     attorney'';
       (2) in subsection (b)--
       (A) in paragraph (1), by adding at the end the following: 
     ``If a bankruptcy petition preparer is not an individual, 
     then an officer, principal, responsible person, or partner of 
     the bankruptcy petition preparer shall be required to--
       ``(A) sign the document for filing; and
       ``(B) print on the document the name and address of that 
     officer, principal, responsible person, or partner.''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2)(A) Before preparing any document for filing or 
     accepting any fees from a debtor, the bankruptcy petition 
     preparer shall provide to the debtor a written notice which 
     shall be on an official form prescribed by the Judicial 
     Conference of the United States in accordance with rule 9009 
     of the Federal Rules of Bankruptcy Procedure.
       ``(B) The notice under subparagraph (A)--
       ``(i) shall inform the debtor in simple language that a 
     bankruptcy petition preparer is not an attorney and may not 
     practice law or give legal advice;
       ``(ii) may contain a description of examples of legal 
     advice that a bankruptcy petition preparer is not authorized 
     to give, in addition to any advice that the preparer may not 
     give by reason of subsection (e)(2); and
       ``(iii) shall--
       ``(I) be signed by the debtor and, under penalty of 
     perjury, by the bankruptcy petition preparer; and
       ``(II) be filed with any document for filing.'';
       (3) in subsection (c)--
       (A) in paragraph (2)--
       (i) by striking ``(2) For purposes'' and inserting ``(2)(A) 
     Subject to subparagraph (B), for purposes''; and
       (ii) by adding at the end the following:
       ``(B) If a bankruptcy petition preparer is not an 
     individual, the identifying number of the bankruptcy petition 
     preparer shall be the Social Security account number of the 
     officer, principal, responsible person, or partner of the 
     bankruptcy petition preparer.''; and
       (B) by striking paragraph (3);
       (4) in subsection (d)--
       (A) by striking ``(d)(1)'' and inserting ``(d)''; and
       (B) by striking paragraph (2);
       (5) in subsection (e)--
       (A) by striking paragraph (2); and
       (B) by adding at the end the following:
       ``(2)(A) A bankruptcy petition preparer may not offer a 
     potential bankruptcy debtor any legal advice, including any 
     legal advice described in subparagraph (B).
       ``(B) The legal advice referred to in subparagraph (A) 
     includes advising the debtor--
       ``(i) whether--
       ``(I) to file a petition under this title; or
       ``(II) commencing a case under chapter 7, 11, 12, or 13 is 
     appropriate;
       ``(ii) whether the debtor's debts will be discharged in a 
     case under this title;
       ``(iii) whether the debtor will be able to retain the 
     debtor's home, car, or other property after commencing a case 
     under this title;
       ``(iv) concerning--
       ``(I) the tax consequences of a case brought under this 
     title; or
       ``(II) the dischargeability of tax claims;
       ``(v) whether the debtor may or should promise to repay 
     debts to a creditor or enter into a reaffirmation agreement 
     with a creditor to reaffirm a debt;
       ``(vi) concerning how to characterize the nature of the 
     debtor's interests in property or the debtor's debts; or
       ``(vii) concerning bankruptcy procedures and rights.'';
       (6) in subsection (f)--
       (A) by striking ``(f)(1)'' and inserting ``(f)''; and
       (B) by striking paragraph (2);
       (7) in subsection (g)--
       (A) by striking ``(g)(1)'' and inserting ``(g)''; and
       (B) by striking paragraph (2);
       (8) in subsection (h)--
       (A) by redesignating paragraphs (1) through (4) as 
     paragraphs (2) through (5), respectively;
       (B) by inserting before paragraph (2), as so redesignated, 
     the following:
       ``(1) The Supreme Court may promulgate rules under section 
     2075 of title 28, or the Judicial Conference of the United 
     States may prescribe guidelines, for setting a maximum 
     allowable fee chargeable by a bankruptcy petition preparer. A 
     bankruptcy petition preparer shall notify the debtor of any 
     such maximum amount before preparing any document for filing 
     for a debtor or accepting any fee from the debtor.'';
       (C) in paragraph (2), as so redesignated--
       (i) by striking ``Within 10 days after the date of the 
     filing of a petition, a bankruptcy petition preparer shall 
     file a'' and inserting ``A'';
       (ii) by inserting ``by the bankruptcy petition preparer 
     shall be filed together with the petition,'' after 
     ``perjury''; and
       (iii) by adding at the end the following: ``If rules or 
     guidelines setting a maximum fee for services have been 
     promulgated or prescribed under paragraph (1), the 
     declaration under this paragraph shall include a 
     certification that the bankruptcy petition preparer complied 
     with the notification requirement under paragraph (1).'';

[[Page 569]]

       (D) by striking paragraph (3), as so redesignated, and 
     inserting the following:
       ``(3)(A) The court shall disallow and order the immediate 
     turnover to the bankruptcy trustee any fee referred to in 
     paragraph (2) found to be in excess of the value of any 
     services--
       ``(i) rendered by the bankruptcy petition preparer during 
     the 12-month period immediately preceding the date of the 
     filing of the petition; or
       ``(ii) found to be in violation of any rule or guideline 
     promulgated or prescribed under paragraph (1).
       ``(B) All fees charged by a bankruptcy petition preparer 
     may be forfeited in any case in which the bankruptcy petition 
     preparer fails to comply with this subsection or subsection 
     (b), (c), (d), (e), (f), or (g).
       ``(C) An individual may exempt any funds recovered under 
     this paragraph under section 522(b).''; and
       (E) in paragraph (4), as so redesignated, by striking ``or 
     the United States trustee'' and inserting ``the United States 
     trustee (or the bankruptcy administrator, if any) or the 
     court, on the initiative of the court,'';
       (9) in subsection (i)(1), by striking the matter preceding 
     subparagraph (A) and inserting the following:
       ``(i)(1) If a bankruptcy petition preparer violates this 
     section or commits any act that the court finds to be 
     fraudulent, unfair, or deceptive, on the motion of the 
     debtor, trustee, United States trustee (or the bankruptcy 
     administrator, if any), and after notice and a hearing, the 
     court shall order the bankruptcy petition preparer to pay to 
     the debtor--'';
       (10) in subsection (j)--
       (A) in paragraph (2)--
       (i) in subparagraph (A)(i)(I), by striking ``a violation of 
     which subjects a person to criminal penalty'';
       (ii) in subparagraph (B)--

       (I) by striking ``or has not paid a penalty'' and inserting 
     ``has not paid a penalty''; and
       (II) by inserting ``or failed to disgorge all fees ordered 
     by the court'' after ``a penalty imposed under this 
     section,'';

       (B) by redesignating paragraph (3) as paragraph (4); and
       (C) by inserting after paragraph (2) the following:
       ``(3) The court, as part of its contempt power, may enjoin 
     a bankruptcy petition preparer that has failed to comply with 
     a previous order issued under this section. The injunction 
     under this paragraph may be issued on the motion of the 
     court, the trustee, or the United States trustee (or the 
     bankruptcy administrator, if any).''; and
       (11) by adding at the end the following:
       ``(l)(1) A bankruptcy petition preparer who fails to comply 
     with any provision of subsection (b), (c), (d), (e), (f), 
     (g), or (h) may be fined not more than $500 for each such 
     failure.
       ``(2) The court shall triple the amount of a fine assessed 
     under paragraph (1) in any case in which the court finds that 
     a bankruptcy petition preparer--
       ``(A) advised the debtor to exclude assets or income that 
     should have been included on applicable schedules;
       ``(B) advised the debtor to use a false Social Security 
     account number;
       ``(C) failed to inform the debtor that the debtor was 
     filing for relief under this title; or
       ``(D) prepared a document for filing in a manner that 
     failed to disclose the identity of the bankruptcy petition 
     preparer.
       ``(3) A debtor, trustee, creditor, or United States trustee 
     (or the bankruptcy administrator, if any) may file a motion 
     for an order imposing a fine on the bankruptcy petition 
     preparer for any violation of this section.
       ``(4)(A) Fines imposed under this subsection in judicial 
     districts served by United States trustees shall be paid to 
     the United States trustee, who shall deposit an amount equal 
     to such fines in a special account of the United States 
     Trustee System Fund referred to in section 586(e)(2) of title 
     28. Amounts deposited under this subparagraph shall be 
     available to fund the enforcement of this section on a 
     national basis.
       ``(B) Fines imposed under this subsection in judicial 
     districts served by bankruptcy administrators shall be 
     deposited as offsetting receipts to the fund established 
     under section 1931 of title 28, and shall remain available 
     until expended to reimburse any appropriation for the amount 
     paid out of such appropriation for expenses of the operation 
     and maintenance of the courts of the United States.''.

     SEC. 222. SENSE OF CONGRESS.

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

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

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

     SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

       (a) In General.--Section 522 of title 11, United States 
     Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and'';
       (iii) by adding at the end the following:
       ``(C) retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''; and
       (iv) by striking ``(2)(A) any property'' and inserting:
       ``(3) Property listed in this paragraph is--
       ``(A) any property'';
       (B) by striking paragraph (1) and inserting:
       ``(2) Property listed in this paragraph is property that is 
     specified under subsection (d), unless the State law that is 
     applicable to the debtor under paragraph (3)(A) specifically 
     does not so authorize.'';
       (C) by striking ``(b) Notwithstanding'' and inserting 
     ``(b)(1) Notwithstanding'';
       (D) by striking ``paragraph (2)'' each place it appears and 
     inserting ``paragraph (3)'';
       (E) by striking ``paragraph (1)'' each place it appears and 
     inserting ``paragraph (2)'';
       (F) by striking ``Such property is--''; and
       (G) by adding at the end the following:
       ``(4) For purposes of paragraph (3)(C) and subsection 
     (d)(12), the following shall apply:
       ``(A) If the retirement funds are in a retirement fund that 
     has received a favorable determination under section 7805 of 
     the Internal Revenue Code of 1986, and that determination is 
     in effect as of the date of the filing of the petition in a 
     case under this title, those funds shall be presumed to be 
     exempt from the estate.
       ``(B) If the retirement funds are in a retirement fund that 
     has not received a favorable determination under such section 
     7805, those funds are exempt from the estate if the debtor 
     demonstrates that--
       ``(i) no prior determination to the contrary has been made 
     by a court or the Internal Revenue Service; and
       ``(ii)(I) the retirement fund is in substantial compliance 
     with the applicable requirements of the Internal Revenue Code 
     of 1986; or
       ``(II) the retirement fund fails to be in substantial 
     compliance with the applicable requirements of the Internal 
     Revenue Code of 1986 and the debtor is not materially 
     responsible for that failure.
       ``(C) A direct transfer of retirement funds from 1 fund or 
     account that is exempt from taxation under section 401, 403, 
     408, 408A, 414, 457, or 501(a) of the Internal Revenue Code 
     of 1986, under section 401(a)(31) of the Internal Revenue 
     Code of 1986, or otherwise, shall not cease to qualify for 
     exemption under paragraph (3)(C) or subsection (d)(12) by 
     reason of such direct transfer.
       ``(D)(i) Any distribution that qualifies as an eligible 
     rollover distribution within the meaning of section 402(c) of 
     the Internal Revenue Code of 1986 or that is described in 
     clause (ii) shall not cease to qualify for exemption under 
     paragraph (3)(C) or subsection (d)(12) by reason of such 
     distribution.
       ``(ii) A distribution described in this clause is an amount 
     that--
       ``(I) has been distributed from a fund or account that is 
     exempt from taxation under section 401, 403, 408, 408A, 414, 
     457, or 501(a) of the Internal Revenue Code of 1986; and
       ``(II) to the extent allowed by law, is deposited in such a 
     fund or account not later than 60 days after the distribution 
     of such amount.''; and
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``subsection (b)(1)'' and inserting ``subsection (b)(2)''; 
     and
       (B) by adding at the end the following:
       ``(12) Retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, is amended--
       (1) in paragraph (17), by striking ``or'' at the end;
       (2) in paragraph (18), by striking the period and inserting 
     a semicolon; and
       (3) by inserting after paragraph (18) the following:
       ``(19) under subsection (a), of withholding of income from 
     a debtor's wages and collection of amounts withheld, under 
     the debtor's agreement authorizing that withholding and 
     collection for the benefit of a pension, profit-sharing, 
     stock bonus, or other plan established under section 401, 
     403, 408, 408A, 414, 457, or 501(c) of the Internal Revenue 
     Code of 1986, that is sponsored by the employer of the 
     debtor, or an affiliate, successor, or predecessor of such 
     employer--
       ``(A) to the extent that the amounts withheld and collected 
     are used solely for payments relating to a loan from a plan 
     under section 408(b)(1) of the Employee Retirement Income 
     Security Act of 1974 or is subject to section 72(p) of the 
     Internal Revenue Code of 1986; or
       ``(B) a loan from a thrift savings plan permitted under 
     subchapter III of chapter 84 of title 5, that satisfies the 
     requirements of section 8433(g) of such title;


[[Page 570]]


     but nothing in this paragraph may be construed to provide 
     that any loan made under a governmental plan under section 
     414(d), or a contract or account under section 403(b), of the 
     Internal Revenue Code of 1986 constitutes a claim or a debt 
     under this title;''.
       (c) Exceptions To Discharge.--Section 523(a) of title 11, 
     United States Code, as amended by section 215, is amended by 
     inserting after paragraph (17) the following:
       ``(18) owed to a pension, profit-sharing, stock bonus, or 
     other plan established under section 401, 403, 408, 408A, 
     414, 457, or 501(c) of the Internal Revenue Code of 1986, 
     under--
       ``(A) a loan permitted under section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974, or subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) a loan from a thrift savings plan permitted under 
     subchapter III of chapter 84 of title 5, that satisfies the 
     requirements of section 8433(g) of such title;

     but nothing in this paragraph may be construed to provide 
     that any loan made under a governmental plan under section 
     414(d), or a contract or account under section 403(b), of the 
     Internal Revenue Code of 1986 constitutes a claim or a debt 
     under this title; or''.
       (d) Plan Contents.--Section 1322 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(f) A plan may not materially alter the terms of a loan 
     described in section 362(b)(19) and any amounts required to 
     repay such loan shall not constitute `disposable income' 
     under section 1325.''.
       (e) Asset Limitation.--
       (1) Limitation.--Section 522 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(n) For assets in individual retirement accounts 
     described in section 408 or 408A of the Internal Revenue Code 
     of 1986, other than a simplified employee pension under 
     section 408(k) of such Code or a simple retirement account 
     under section 408(p) of such Code, the aggregate value of 
     such assets exempted under this section, without regard to 
     amounts attributable to rollover contributions under section 
     402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the 
     Internal Revenue Code of 1986, and earnings thereon, shall 
     not exceed $1,000,000 in a case filed by a debtor who is an 
     individual, except that such amount may be increased if the 
     interests of justice so require.''.
       (2) Adjustment of dollar amounts.--Paragraphs (1) and (2) 
     of section 104(b) of title 11, United States Code, are 
     amended by inserting ``522(n),'' after ``522(d),''.

     SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.

       (a) Exclusions.--Section 541 of title 11, United States 
     Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (4), by striking ``or'' at the end;
       (B) by redesignating paragraph (5) as paragraph (9); and
       (C) by inserting after paragraph (4) the following:
       ``(5) funds placed in an education individual retirement 
     account (as defined in section 530(b)(1) of the Internal 
     Revenue Code of 1986) not later than 365 days before the date 
     of the filing of the petition in a case under this title, 
     but--
       ``(A) only if the designated beneficiary of such account 
     was a child, stepchild, grandchild, or stepgrandchild of the 
     debtor for the taxable year for which funds were placed in 
     such account;
       ``(B) only to the extent that such funds--
       ``(i) are not pledged or promised to any entity in 
     connection with any extension of credit; and
       ``(ii) are not excess contributions (as described in 
     section 4973(e) of the Internal Revenue Code of 1986); and
       ``(C) in the case of funds placed in all such accounts 
     having the same designated beneficiary not earlier than 720 
     days nor later than 365 days before such date, only so much 
     of such funds as does not exceed $5,000;
       ``(6) funds used to purchase a tuition credit or 
     certificate or contributed to an account in accordance with 
     section 529(b)(1)(A) of the Internal Revenue Code of 1986 
     under a qualified State tuition program (as defined in 
     section 529(b)(1) of such Code) not later than 365 days 
     before the date of the filing of the petition in a case under 
     this title, but--
       ``(A) only if the designated beneficiary of the amounts 
     paid or contributed to such tuition program was a child, 
     stepchild, grandchild, or stepgrandchild of the debtor for 
     the taxable year for which funds were paid or contributed;
       ``(B) with respect to the aggregate amount paid or 
     contributed to such program having the same designated 
     beneficiary, only so much of such amount as does not exceed 
     the total contributions permitted under section 529(b)(7) of 
     such Code with respect to such beneficiary, as adjusted 
     beginning on the date of the filing of the petition in a case 
     under this title by the annual increase or decrease (rounded 
     to the nearest tenth of 1 percent) in the education 
     expenditure category of the Consumer Price Index prepared by 
     the Department of Labor; and
       ``(C) in the case of funds paid or contributed to such 
     program having the same designated beneficiary not earlier 
     than 720 days nor later than 365 days before such date, only 
     so much of such funds as does not exceed $5,000;''; and
       (2) by adding at the end the following:
       ``(e) In determining whether any of the relationships 
     specified in paragraph (5)(A) or (6)(A) of subsection (b) 
     exists, a legally adopted child of an individual (and a child 
     who is a member of an individual's household, if placed with 
     such individual by an authorized placement agency for legal 
     adoption by such individual), or a foster child of an 
     individual (if such child has as the child's principal place 
     of abode the home of the debtor and is a member of the 
     debtor's household) shall be treated as a child of such 
     individual by blood.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by section 106, is amended by adding 
     at the end the following:
       ``(c) In addition to meeting the requirements under 
     subsection (a), a debtor shall file with the court a record 
     of any interest that a debtor has in an education individual 
     retirement account (as defined in section 530(b)(1) of the 
     Internal Revenue Code of 1986) or under a qualified State 
     tuition program (as defined in section 529(b)(1) of such 
     Code).''.

     SEC. 226. DEFINITIONS.

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

     SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

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

     ``Sec. 526. Restrictions on debt relief agencies

       ``(a) A debt relief agency shall not--
       ``(1) fail to perform any service that such agency informed 
     an assisted person or prospective assisted person it would 
     provide in connection with a case or proceeding under this 
     title;
       ``(2) make any statement, or counsel or advise any assisted 
     person or prospective assisted person to make a statement in 
     a document filed in a case or proceeding under this title, 
     that is untrue and misleading, or that upon the exercise of 
     reasonable care, should have been known by such agency to be 
     untrue or misleading;
       ``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission, with respect to--
       ``(A) the services that such agency will provide to such 
     person; or
       ``(B) the benefits and risks that may result if such person 
     becomes a debtor in a case under this title; or
       ``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of such person 
     filing a case under this title or to pay an attorney or 
     bankruptcy petition preparer fee or charge for services 
     performed as part of preparing for or representing a debtor 
     in a case under this title.
       ``(b) Any waiver by any assisted person of any protection 
     or right provided under this section shall not be enforceable 
     against the debtor by any Federal or State court or any

[[Page 571]]

     other person, but may be enforced against a debt relief 
     agency.
       ``(c)(1) Any contract for bankruptcy assistance between a 
     debt relief agency and an assisted person that does not 
     comply with the material requirements of this section, 
     section 527, or section 528 shall be void and may not be 
     enforced by any Federal or State court or by any other 
     person, other than such assisted person.
       ``(2) Any debt relief agency shall be liable to an assisted 
     person in the amount of any fees or charges in connection 
     with providing bankruptcy assistance to such person that such 
     debt relief agency has received, for actual damages, and for 
     reasonable attorneys' fees and costs if such agency is found, 
     after notice and a hearing, to have--
       ``(A) intentionally or negligently failed to comply with 
     any provision of this section, section 527, or section 528 
     with respect to a case or proceeding under this title for 
     such assisted person;
       ``(B) provided bankruptcy assistance to an assisted person 
     in a case or proceeding under this title that is dismissed or 
     converted to a case under another chapter of this title 
     because of such agency's intentional or negligent failure to 
     file any required document including those specified in 
     section 521; or
       ``(C) intentionally or negligently disregarded the material 
     requirements of this title or the Federal Rules of Bankruptcy 
     Procedure applicable to such agency.
       ``(3) In addition to such other remedies as are provided 
     under State law, whenever the chief law enforcement officer 
     of a State, or an official or agency designated by a State, 
     has reason to believe that any person has violated or is 
     violating this section, the State--
       ``(A) may bring an action to enjoin such violation;
       ``(B) may bring an action on behalf of its residents to 
     recover the actual damages of assisted persons arising from 
     such violation, including any liability under paragraph (2); 
     and
       ``(C) in the case of any successful action under 
     subparagraph (A) or (B), shall be awarded the costs of the 
     action and reasonable attorneys' fees as determined by the 
     court.
       ``(4) The district courts of the United States for 
     districts located in the State shall have concurrent 
     jurisdiction of any action under subparagraph (A) or (B) of 
     paragraph (3).
       ``(5) Notwithstanding any other provision of Federal law 
     and in addition to any other remedy provided under Federal or 
     State law, if the court, on its own motion or on the motion 
     of the United States trustee or the debtor, finds that a 
     person intentionally violated this section, or engaged in a 
     clear and consistent pattern or practice of violating this 
     section, the court may--
       ``(A) enjoin the violation of such section; or
       ``(B) impose an appropriate civil penalty against such 
     person.
       ``(d) No provision of this section, section 527, or section 
     528 shall--
       ``(1) annul, alter, affect, or exempt any person subject to 
     such sections from complying with any law of any State except 
     to the extent that such law is inconsistent with those 
     sections, and then only to the extent of the inconsistency; 
     or
       ``(2) be deemed to limit or curtail the authority or 
     ability--
       ``(A) of a State or subdivision or instrumentality thereof, 
     to determine and enforce qualifications for the practice of 
     law under the laws of that State; or
       ``(B) of a Federal court to determine and enforce the 
     qualifications for the practice of law before that court.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, is amended by 
     inserting after the item relating to section 525, the 
     following:

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

     SEC. 228. DISCLOSURES.

       (a) Disclosures.--Subchapter II of chapter 5 of title 11, 
     United States Code, as amended by section 227, is amended by 
     adding at the end the following:

     ``Sec. 527. Disclosures

       ``(a) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide--
       ``(1) the written notice required under section 342(b)(1); 
     and
       ``(2) to the extent not covered in the written notice 
     described in paragraph (1), and not later than 3 business 
     days after the first date on which a debt relief agency first 
     offers to provide any bankruptcy assistance services to an 
     assisted person, a clear and conspicuous written notice 
     advising assisted persons that--
       ``(A) all information that the assisted person is required 
     to provide with a petition and thereafter during a case under 
     this title is required to be complete, accurate, and 
     truthful;
       ``(B) all assets and all liabilities are required to be 
     completely and accurately disclosed in the documents filed to 
     commence the case, and the replacement value of each asset as 
     defined in section 506 must be stated in those documents 
     where requested after reasonable inquiry to establish such 
     value;
       ``(C) current monthly income, the amounts specified in 
     section 707(b)(2), and, in a case under chapter 13 of this 
     title, disposable income (determined in accordance with 
     section 707(b)(2)), are required to be stated after 
     reasonable inquiry; and
       ``(D) information that an assisted person provides during 
     their case may be audited pursuant to this title, and that 
     failure to provide such information may result in dismissal 
     of the case under this title or other sanction, including a 
     criminal sanction.
       ``(b) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide each assisted person at 
     the same time as the notices required under subsection (a)(1) 
     the following statement, to the extent applicable, or one 
     substantially similar. The statement shall be clear and 
     conspicuous and shall be in a single document separate from 
     other documents or notices provided to the assisted person:
       ```IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE 
     SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.
       ```If you decide to seek bankruptcy relief, you can 
     represent yourself, you can hire an attorney to represent 
     you, or you can get help in some localities from a bankruptcy 
     petition preparer who is not an attorney. THE LAW REQUIRES AN 
     ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A 
     WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY 
     PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. 
     Ask to see the contract before you hire anyone.
       ```The following information helps you understand what must 
     be done in a routine bankruptcy case to help you evaluate how 
     much service you need. Although bankruptcy can be complex, 
     many cases are routine.
       ```Before filing a bankruptcy case, either you or your 
     attorney should analyze your eligibility for different forms 
     of debt relief available under the Bankruptcy Code and which 
     form of relief is most likely to be beneficial for you. Be 
     sure you understand the relief you can obtain and its 
     limitations. To file a bankruptcy case, documents called a 
     Petition, Schedules and Statement of Financial Affairs, as 
     well as in some cases a Statement of Intention need to be 
     prepared correctly and filed with the bankruptcy court. You 
     will have to pay a filing fee to the bankruptcy court. Once 
     your case starts, you will have to attend the required first 
     meeting of creditors where you may be questioned by a court 
     official called a `trustee' and by creditors.
       ```If you choose to file a chapter 7 case, you may be asked 
     by a creditor to reaffirm a debt. You may want help deciding 
     whether to do so. A creditor is not permitted to coerce you 
     into reaffirming your debts.
       ```If you choose to file a chapter 13 case in which you 
     repay your creditors what you can afford over 3 to 5 years, 
     you may also want help with preparing your chapter 13 plan 
     and with the confirmation hearing on your plan which will be 
     before a bankruptcy judge.
       ```If you select another type of relief under the 
     Bankruptcy Code other than chapter 7 or chapter 13, you will 
     want to find out what should be done from someone familiar 
     with that type of relief.
       ```Your bankruptcy case may also involve litigation. You 
     are generally permitted to represent yourself in litigation 
     in bankruptcy court, but only attorneys, not bankruptcy 
     petition preparers, can give you legal advice.'.
       ``(c) Except to the extent the debt relief agency provides 
     the required information itself after reasonably diligent 
     inquiry of the assisted person or others so as to obtain such 
     information reasonably accurately for inclusion on the 
     petition, schedules or statement of financial affairs, a debt 
     relief agency providing bankruptcy assistance to an assisted 
     person, to the extent permitted by nonbankruptcy law, shall 
     provide each assisted person at the time required for the 
     notice required under subsection (a)(1) reasonably sufficient 
     information (which shall be provided in a clear and 
     conspicuous writing) to the assisted person on how to provide 
     all the information the assisted person is required to 
     provide under this title pursuant to section 521, including--
       ``(1) how to value assets at replacement value, determine 
     current monthly income, the amounts specified in section 
     707(b)(2) and, in a chapter 13 case, how to determine 
     disposable income in accordance with section 707(b)(2) and 
     related calculations;
       ``(2) how to complete the list of creditors, including how 
     to determine what amount is owed and what address for the 
     creditor should be shown; and
       ``(3) how to determine what property is exempt and how to 
     value exempt property at replacement value as defined in 
     section 506.
       ``(d) A debt relief agency shall maintain a copy of the 
     notices required under subsection (a) of this section for 2 
     years after the date on which the notice is given the 
     assisted person.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, as amended by 
     section 227, is amended by inserting after the item relating 
     to section 526 the following:

``527. Disclosures.''.

[[Page 572]]



     SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.

       (a) Enforcement.--Subchapter II of chapter 5 of title 11, 
     United States Code, as amended by sections 227 and 228, is 
     amended by adding at the end the following:

     ``Sec. 528. Requirements for debt relief agencies

       ``(a) A debt relief agency shall--
       ``(1) not later than 5 business days after the first date 
     on which such agency provides any bankruptcy assistance 
     services to an assisted person, but prior to such assisted 
     person's petition under this title being filed, execute a 
     written contract with such assisted person that explains 
     clearly and conspicuously--
       ``(A) the services such agency will provide to such 
     assisted person; and
       ``(B) the fees or charges for such services, and the terms 
     of payment;
       ``(2) provide the assisted person with a copy of the fully 
     executed and completed contract;
       ``(3) clearly and conspicuously disclose in any 
     advertisement of bankruptcy assistance services or of the 
     benefits of bankruptcy directed to the general public 
     (whether in general media, seminars or specific mailings, 
     telephonic or electronic messages, or otherwise) that the 
     services or benefits are with respect to bankruptcy relief 
     under this title; and
       ``(4) clearly and conspicuously use the following statement 
     in such advertisement: `We are a debt relief agency. We help 
     people file for bankruptcy relief under the Bankruptcy Code.' 
     or a substantially similar statement.
       ``(b)(1) An advertisement of bankruptcy assistance services 
     or of the benefits of bankruptcy directed to the general 
     public includes--
       ``(A) descriptions of bankruptcy assistance in connection 
     with a chapter 13 plan whether or not chapter 13 is 
     specifically mentioned in such advertisement; and
       ``(B) statements such as `federally supervised repayment 
     plan' or `Federal debt restructuring help' or other similar 
     statements that could lead a reasonable consumer to believe 
     that debt counseling was being offered when in fact the 
     services were directed to providing bankruptcy assistance 
     with a chapter 13 plan or other form of bankruptcy relief 
     under this title.
       ``(2) An advertisement, directed to the general public, 
     indicating that the debt relief agency provides assistance 
     with respect to credit defaults, mortgage foreclosures, 
     eviction proceedings, excessive debt, debt collection 
     pressure, or inability to pay any consumer debt shall--
       ``(A) disclose clearly and conspicuously in such 
     advertisement that the assistance may involve bankruptcy 
     relief under this title; and
       ``(B) include the following statement: `We are a debt 
     relief agency. We help people file for bankruptcy relief 
     under the Bankruptcy Code.' or a substantially similar 
     statement.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, as amended by 
     section 227 and 228, is amended by inserting after the item 
     relating to section 527, the following:

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

     SEC. 230. GAO STUDY.

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

     SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.

       (a) Limitation.--Section 363(b)(1) of title 11, United 
     States Code, is amended by striking the period at the end and 
     inserting the following:
     ``, except that if the debtor in connection with offering a 
     product or a service discloses to an individual a policy 
     prohibiting the transfer of personally identifiable 
     information about individuals to persons that are not 
     affiliated with the debtor and if such policy is in effect on 
     the date of the commencement of the case, then the trustee 
     may not sell or lease personally identifiable information to 
     any person unless--
       ``(A) such sale or such lease is consistent with such 
     policy; or
       ``(B) after appointment of a consumer privacy ombudsman in 
     accordance with section 332, and after notice and a hearing, 
     the court approves such sale or such lease--
       ``(i) giving due consideration to the facts, circumstances, 
     and conditions of such sale or such lease; and
       ``(ii) finding that no showing was made that such sale or 
     such lease would violate applicable nonbankruptcy law.''.
       (b) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (41) the 
     following:
       ``(41A) `personally identifiable information' means--
       ``(A) if provided by an individual to the debtor in 
     connection with obtaining a product or a service from the 
     debtor primarily for personal, family, or household 
     purposes--
       ``(i) the first name (or initial) and last name of such 
     individual, whether given at birth or time of adoption, or 
     resulting from a lawful change of name;
       ``(ii) the geographical address of a physical place of 
     residence of such individual;
       ``(iii) an electronic address (including an e-mail address) 
     of such individual;
       ``(iv) a telephone number dedicated to contacting such 
     individual at such physical place of residence;
       ``(v) a social security account number issued to such 
     individual; or
       ``(vi) the account number of a credit card issued to such 
     individual; or
       ``(B) if identified in connection with 1 or more of the 
     items of information specified in subparagraph (A)--
       ``(i) a birth date, the number of a certificate of birth or 
     adoption, or a place of birth; or
       ``(ii) any other information concerning an identified 
     individual that, if disclosed, will result in contacting or 
     identifying such individual physically or electronically;''.

     SEC. 232. CONSUMER PRIVACY OMBUDSMAN.

       (a) Consumer Privacy Ombudsman.--Title 11 of the United 
     States Code is amended by inserting after section 331 the 
     following:

     ``Sec. 332. Consumer privacy ombudsman

       ``(a) If a hearing is required under section 363(b)(1)(B), 
     the court shall order the United States trustee to appoint, 
     not later than 5 days before the commencement of the hearing, 
     1 disinterested person (other than the United States trustee) 
     to serve as the consumer privacy ombudsman in the case and 
     shall require that notice of such hearing be timely given to 
     such ombudsman.
       ``(b) The consumer privacy ombudsman may appear and be 
     heard at such hearing and shall provide to the court 
     information to assist the court in its consideration of the 
     facts, circumstances, and conditions of the proposed sale or 
     lease of personally identifiable information under section 
     363(b)(1)(B). Such information may include presentation of--
       ``(1) the debtor's privacy policy;
       ``(2) the potential losses or gains of privacy to consumers 
     if such sale or such lease is approved by the court;
       ``(3) the potential costs or benefits to consumers if such 
     sale or such lease is approved by the court; and
       ``(4) the potential alternatives that would mitigate 
     potential privacy losses or potential costs to consumers.
       ``(c) A consumer privacy ombudsman shall not disclose any 
     personally identifiable information obtained by the ombudsman 
     under this title.''.
       (b) Compensation of Consumer Privacy Ombudsman.--Section 
     330(a)(1) of title 11, United States Code, is amended in the 
     matter preceding subparagraph (A), by inserting ``a consumer 
     privacy ombudsman appointed under section 332,'' before ``an 
     examiner''.
       (c) Conforming Amendment.--The table of sections for 
     subchapter II of chapter 3 of title 11, United States Code, 
     is amended by adding at the end the following:

``332. Consumer privacy ombudsman.''.

     SEC. 233. PROHIBITION ON DISCLOSURE OF NAME OF MINOR 
                   CHILDREN.

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

     ``Sec. 112. Prohibition on disclosure of name of minor 
       children

       ``The debtor may be required to provide information 
     regarding a minor child involved in matters under this title 
     but may not be required to disclose in the public records in 
     the case the name of such minor child. The debtor may be 
     required to disclose the name of such minor child in a 
     nonpublic record that is maintained by the court and made 
     available by the court for examination by the United States 
     trustee, the trustee, and the auditor (if any) serving under 
     section 586(f) of title 28, in the case. The court, the 
     United States trustee, the trustee, and such auditor shall 
     not disclose the name of such minor child maintained in such 
     nonpublic record.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     1 of title 11, United States Code, as amended by section 106, 
     is amended by inserting after the item relating to section 
     111 the following:

``112. Prohibition on disclosure of name of minor children.''.
       (c) Conforming Amendment.--Section 107(a) of title 11, 
     United States Code, is amended by inserting ``and subject to 
     section 112'' after ``section''.

               TITLE III --DISCOURAGING BANKRUPTCY ABUSE

     SEC. 301. TECHNICAL AMENDMENTS.

       Section 523(a)(17) of title 11, United States Code, is 
     amended--
       (1) by striking ``by a court'' and inserting ``on a 
     prisoner by any court'';

[[Page 573]]

       (2) by striking ``section 1915(b) or (f)'' and inserting 
     ``subsection (b) or (f)(2) of section 1915''; and
       (3) by inserting ``(or a similar non-Federal law)'' after 
     ``title 28'' each place it appears.

     SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.

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

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

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

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

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

     SEC. 303. CURBING ABUSIVE FILINGS.

       (a) In General.--Section 362(d) of title 11, United States 
     Code, is amended--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(4) with respect to a stay of an act against real 
     property under subsection (a), by a creditor whose claim is 
     secured by an interest in such real property, if the court 
     finds that the filing of the petition was part of a scheme to 
     delay, hinder, and defraud creditors that involved either--
       ``(A) transfer of all or part ownership of, or other 
     interest in, such real property without the consent of the 
     secured creditor or court approval; or
       ``(B) multiple bankruptcy filings affecting such real 
     property.
     If recorded in compliance with applicable State laws 
     governing notices of interests or liens in real property, an 
     order entered under paragraph (4) shall be binding in any 
     other case under this title purporting to affect such real 
     property filed not later than 2 years after the date of the 
     entry of such order by the court, except that a debtor in a 
     subsequent case under this title may move for relief from 
     such order based upon changed circumstances or for good cause 
     shown, after notice and a hearing. Any Federal, State, or 
     local governmental unit that accepts notices of interests or 
     liens in real property shall accept any certified copy of an 
     order described in this subsection for indexing and 
     recording.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by section 224, is amended by 
     inserting after paragraph (19), the following:
       ``(20) under subsection (a), of any act to enforce any lien 
     against or security interest in real property following entry 
     of the order under subsection (d)(4) as to such real property 
     in any prior case under this title, for a period of 2 years 
     after the date of the entry of such an order, except that the 
     debtor, in a subsequent case under this title, may move for 
     relief from such order based upon changed circumstances or 
     for other good cause shown, after notice and a hearing;
       ``(21) under subsection (a), of any act to enforce any lien 
     against or security interest in real property--
       ``(A) if the debtor is ineligible under section 109(g) to 
     be a debtor in a case under this title; or
       ``(B) if the case under this title was filed in violation 
     of a bankruptcy court order in a prior case under this title 
     prohibiting the debtor from being a debtor in another case 
     under this title;''.

     SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

       Title 11, United States Code, is amended--
       (1) in section 521(a), as so designated by section 106--
       (A) in paragraph (4), by striking ``, and'' at the end and 
     inserting a semicolon;
       (B) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(6) in a case under chapter 7 of this title in which the 
     debtor is an individual, not retain possession of personal 
     property as to which a creditor has an allowed claim for the 
     purchase price secured in whole or in part by an interest in 
     such personal property unless the debtor, not later than 45 
     days after the first meeting of creditors under section 
     341(a), either--
       ``(A) enters into an agreement with the creditor pursuant 
     to section 524(c) with respect to the claim secured by such 
     property; or
       ``(B) redeems such property from the security interest 
     pursuant to section 722.
     If the debtor fails to so act within the 45-day period 
     referred to in paragraph (6), the stay under section 362(a) 
     is terminated with respect to the personal property of the 
     estate or of the debtor which is affected, such property 
     shall no longer be property of the estate, and the creditor 
     may take whatever action as to such property as is permitted 
     by applicable nonbankruptcy law, unless the court determines 
     on the motion of the trustee filed before the expiration of 
     such 45-day period, and after notice and a hearing, that such 
     property is of consequential value or benefit to the estate, 
     orders appropriate adequate protection of the creditor's 
     interest, and orders the debtor to deliver any collateral in 
     the debtor's possession to the trustee.''; and

[[Page 574]]

       (2) in section 722, by inserting ``in full at the time of 
     redemption'' before the period at the end.

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

       Title 11, United States Code, is amended--
       (1) in section 362, as amended by section 106--
       (A) in subsection (c), by striking ``(e), and (f)'' and 
     inserting ``(e), (f), and (h)'';
       (B) by redesignating subsection (h) as subsection (k) and 
     transferring such subsection so as to insert it after 
     subjection (j) as added by section 106; and
       (C) by inserting after subsection (g) the following:
       ``(h)(1) In a case in which the debtor is an individual, 
     the stay provided by subsection (a) is terminated with 
     respect to personal property of the estate or of the debtor 
     securing in whole or in part a claim, or subject to an 
     unexpired lease, and such personal property shall no longer 
     be property of the estate if the debtor fails within the 
     applicable time set by section 521(a)(2)--
       ``(A) to file timely any statement of intention required 
     under section 521(a)(2) with respect to such personal 
     property or to indicate in such statement that the debtor 
     will either surrender such personal property or retain it 
     and, if retaining such personal property, either redeem such 
     personal property pursuant to section 722, enter into an 
     agreement of the kind specified in section 524(c) applicable 
     to the debt secured by such personal property, or assume such 
     unexpired lease pursuant to section 365(p) if the trustee 
     does not do so, as applicable; and
       ``(B) to take timely the action specified in such 
     statement, as it may be amended before expiration of the 
     period for taking action, unless such statement specifies the 
     debtor's intention to reaffirm such debt on the original 
     contract terms and the creditor refuses to agree to the 
     reaffirmation on such terms.
       ``(2) Paragraph (1) does not apply if the court determines, 
     on the motion of the trustee filed before the expiration of 
     the applicable time set by section 521(a)(2), after notice 
     and a hearing, that such personal property is of 
     consequential value or benefit to the estate, and orders 
     appropriate adequate protection of the creditor's interest, 
     and orders the debtor to deliver any collateral in the 
     debtor's possession to the trustee. If the court does not so 
     determine, the stay provided by subsection (a) shall 
     terminate upon the conclusion of the hearing on the 
     motion.''; and
       (2) in section 521, as amended by sections 106 and 225--
       (A) in subsection (a)(2) by striking ``consumer'';
       (B) in subsection (a)(2)(B)--
       (i) by striking ``forty-five days after the filing of a 
     notice of intent under this section'' and inserting ``30 days 
     after the first date set for the meeting of creditors under 
     section 341(a)''; and
       (ii) by striking ``forty-five day'' and inserting ``30-
     day'';
       (C) in subsection (a)(2)(C) by inserting ``, except as 
     provided in section 362(h)'' before the semicolon; and
       (D) by adding at the end the following:
       ``(d) If the debtor fails timely to take the action 
     specified in subsection (a)(6) of this section, or in 
     paragraphs (1) and (2) of section 362(h), with respect to 
     property which a lessor or bailor owns and has leased, 
     rented, or bailed to the debtor or as to which a creditor 
     holds a security interest not otherwise voidable under 
     section 522(f), 544, 545, 547, 548, or 549, nothing in this 
     title shall prevent or limit the operation of a provision in 
     the underlying lease or agreement that has the effect of 
     placing the debtor in default under such lease or agreement 
     by reason of the occurrence, pendency, or existence of a 
     proceeding under this title or the insolvency of the debtor. 
     Nothing in this subsection shall be deemed to justify 
     limiting such a provision in any other circumstance.''.

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

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

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

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

     SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

       Section 522(b)(3) of title 11, United States Code, as so 
     designated by section 106, is amended--
       (1) in subparagraph (A)--
       (A) by striking ``180 days'' and inserting ``730 days''; 
     and
       (B) by striking ``, or for a longer portion of such 180-day 
     period than in any other place'' and inserting ``or if the 
     debtor's domicile has not been located at a single State for 
     such 730-day period, the place in which the debtor's domicile 
     was located for 180 days immediately preceding the 730-day 
     period or for a longer portion of such 180-day period than in 
     any other place''; and
       (2) by adding at the end the following:

     ``If the effect of the domiciliary requirement under 
     subparagraph (A) is to render the debtor ineligible for any 
     exemption, the debtor may elect to exempt property that is 
     specified under subsection (d).''.

     SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.

       Section 522 of title 11, United States Code, as amended by 
     section 224, is amended--
       (1) in subsection (b)(3)(A), as so designated by this Act, 
     by inserting ``subject to subsections (o) and (p),'' before 
     ``any property''; and
       (2) by adding at the end the following:
       ``(o) For purposes of subsection (b)(3)(A), and 
     notwithstanding subsection (a), the value of an interest in--
       ``(1) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(2) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(3) a burial plot for the debtor or a dependent of the 
     debtor; or
       ``(4) real or personal property that the debtor or a 
     dependent of the debtor claims as a homestead;

     shall be reduced to the extent that such value is 
     attributable to any portion of any property that the debtor 
     disposed of in the 10-year period ending on the date of the 
     filing of the petition with the intent to hinder, delay, or 
     defraud a creditor and that the debtor could not exempt, or 
     that portion that the debtor could not exempt, under 
     subsection (b), if on such date the debtor had held the 
     property so disposed of.''.

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

       (a) Stopping Abusive Conversions From Chapter 13.--Section 
     348(f)(1) of title 11, United States Code, is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B)--
       (A) by striking ``in the converted case, with allowed 
     secured claims'' and inserting ``only in a case converted to 
     a case under chapter 11 or 12, but not in a case converted to 
     a case under chapter 7, with allowed secured claims in cases 
     under chapters 11 and 12''; and
       (B) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(C) with respect to cases converted from chapter 13--
       ``(i) the claim of any creditor holding security as of the 
     date of the petition shall continue to be secured by that 
     security unless the full amount of such claim determined 
     under applicable nonbankruptcy law has been paid in full as 
     of the date of conversion, notwithstanding any valuation or 
     determination of the amount of an allowed secured claim made 
     for the purposes of the case under chapter 13; and
       ``(ii) unless a prebankruptcy default has been fully cured 
     under the plan at the time of conversion, in any proceeding 
     under this title or otherwise, the default shall have the 
     effect given under applicable nonbankruptcy law.''.
       (b) Giving Debtors the Ability To Keep Leased Personal 
     Property by Assumption.--Section 365 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(p)(1) If a lease of personal property is rejected or not 
     timely assumed by the trustee under subsection (d), the 
     leased property is no longer property of the estate and the 
     stay

[[Page 575]]

     under section 362(a) is automatically terminated.
       ``(2)(A) If the debtor in a case under chapter 7 is an 
     individual, the debtor may notify the creditor in writing 
     that the debtor desires to assume the lease. Upon being so 
     notified, the creditor may, at its option, notify the debtor 
     that it is willing to have the lease assumed by the debtor 
     and may condition such assumption on cure of any outstanding 
     default on terms set by the contract.
       ``(B) If, not later than 30 days after notice is provided 
     under subparagraph (A), the debtor notifies the lessor in 
     writing that the lease is assumed, the liability under the 
     lease will be assumed by the debtor and not by the estate.
       ``(C) The stay under section 362 and the injunction under 
     section 524(a)(2) shall not be violated by notification of 
     the debtor and negotiation of cure under this subsection.
       ``(3) In a case under chapter 11 in which the debtor is an 
     individual and in a case under chapter 13, if the debtor is 
     the lessee with respect to personal property and the lease is 
     not assumed in the plan confirmed by the court, the lease is 
     deemed rejected as of the conclusion of the hearing on 
     confirmation. If the lease is rejected, the stay under 
     section 362 and any stay under section 1301 is automatically 
     terminated with respect to the property subject to the 
     lease.''.
       (c) Adequate Protection of Lessors and Purchase Money 
     Secured Creditors.--
       (1) Confirmation of plan.--Section 1325(a)(5)(B) of title 
     11, United States Code, as amended by section 306, is 
     amended--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii), by striking ``or'' at the end and 
     inserting ``and''; and
       (C) by adding at the end the following:
       ``(iii) if--
       ``(I) property to be distributed pursuant to this 
     subsection is in the form of periodic payments, such payments 
     shall be in equal monthly amounts; and
       ``(II) the holder of the claim is secured by personal 
     property, the amount of such payments shall not be less than 
     an amount sufficient to provide to the holder of such claim 
     adequate protection during the period of the plan; or''.
       (2) Payments.--Section 1326(a) of title 11, United States 
     Code, is amended to read as follows:
       ``(a)(1) Unless the court orders otherwise, the debtor 
     shall commence making payments not later than 30 days after 
     the date of the filing of the plan or the order for relief, 
     whichever is earlier, in the amount--
       ``(A) proposed by the plan to the trustee;
       ``(B) scheduled in a lease of personal property directly to 
     the lessor for that portion of the obligation that becomes 
     due after the order for relief, reducing the payments under 
     subparagraph (A) by the amount so paid and providing the 
     trustee with evidence of such payment, including the amount 
     and date of payment; and
       ``(C) that provides adequate protection directly to a 
     creditor holding an allowed claim secured by personal 
     property to the extent the claim is attributable to the 
     purchase of such property by the debtor for that portion of 
     the obligation that becomes due after the order for relief, 
     reducing the payments under subparagraph (A) by the amount so 
     paid and providing the trustee with evidence of such payment, 
     including the amount and date of payment.
       ``(2) A payment made under paragraph (1)(A) shall be 
     retained by the trustee until confirmation or denial of 
     confirmation. If a plan is confirmed, the trustee shall 
     distribute any such payment in accordance with the plan as 
     soon as is practicable. If a plan is not confirmed, the 
     trustee shall return any such payments not previously paid 
     and not yet due and owing to creditors pursuant to paragraph 
     (3) to the debtor, after deducting any unpaid claim allowed 
     under section 503(b).
       ``(3) Subject to section 363, the court may, upon notice 
     and a hearing, modify, increase, or reduce the payments 
     required under this subsection pending confirmation of a 
     plan.
       ``(4) Not later than 60 days after the date of filing of a 
     case under this chapter, a debtor retaining possession of 
     personal property subject to a lease or securing a claim 
     attributable in whole or in part to the purchase price of 
     such property shall provide the lessor or secured creditor 
     reasonable evidence of the maintenance of any required 
     insurance coverage with respect to the use or ownership of 
     such property and continue to do so for so long as the debtor 
     retains possession of such property.''.

     SEC. 310. LIMITATION ON LUXURY GOODS.

       Section 523(a)(2)(C) of title 11, United States Code, is 
     amended to read as follows:
       ``(C)(i) for purposes of subparagraph (A)--
       ``(I) consumer debts owed to a single creditor and 
     aggregating more than $500 for luxury goods or services 
     incurred by an individual debtor on or within 90 days before 
     the order for relief under this title are presumed to be 
     nondischargeable; and
       ``(II) cash advances aggregating more than $750 that are 
     extensions of consumer credit under an open end credit plan 
     obtained by an individual debtor on or within 70 days before 
     the order for relief under this title, are presumed to be 
     nondischargeable; and
       ``(ii) for purposes of this subparagraph--
       ``(I) the terms `consumer', `credit', and `open end credit 
     plan' have the same meanings as in section 103 of the Truth 
     in Lending Act; and
       ``(II) the term `luxury goods or services' does not include 
     goods or services reasonably necessary for the support or 
     maintenance of the debtor or a dependent of the debtor.''.

     SEC. 311. AUTOMATIC STAY.

       (a) In General.--Section 362(b) of title 11, United States 
     Code, as amended by sections 224 and 303, is amended by 
     inserting after paragraph (21), the following:
       ``(22) subject to subsection (n), under subsection (a)(3), 
     of the continuation of any eviction, unlawful detainer 
     action, or similar proceeding by a lessor against a debtor 
     involving residential property in which the debtor resides as 
     a tenant under a lease or rental agreement and with respect 
     to which the lessor has obtained before the date of the 
     filing of the bankruptcy petition, a judgment for possession 
     of such property against the debtor;
       ``(23) subject to subsection (o), under subsection (a)(3), 
     of an eviction action that seeks possession of the 
     residential property in which the debtor resides as a tenant 
     under a lease or rental agreement based on endangerment of 
     such property or the illegal use of controlled substances on 
     such property, but only if the lessor files with the court, 
     and serves upon the debtor, a certification under penalty of 
     perjury that such an eviction action has been filed, or that 
     the debtor, during the 30-day period preceding the date of 
     the filing of the certification, has endangered property or 
     illegally used or allowed to be used a controlled substance 
     on the property;
       ``(24) under subsection (a), of any transfer that is not 
     avoidable under section 544 and that is not avoidable under 
     section 549;''.
       (b) Limitations.--Section 362 of title 11, United States 
     Code, as amended by sections 106 and 305, is amended by 
     adding at the end the following:
       ``(l)(1) Except as otherwise provided in this subsection, 
     subsection (b)(22) shall apply on the date that is 30 days 
     after the date on which the bankruptcy petition is filed, if 
     the debtor files with the petition and serves upon the lessor 
     a certification under penalty of perjury that--
       ``(A) under nonbankruptcy law applicable in the 
     jurisdiction, there are circumstances under which the debtor 
     would be permitted to cure the entire monetary default that 
     gave rise to the judgment for possession, after that judgment 
     for possession was entered; and
       ``(B) the debtor (or an adult dependent of the debtor) has 
     deposited with the clerk of the court, any rent that would 
     become due during the 30-day period after the filing of the 
     bankruptcy petition.
       ``(2) If, within the 30-day period after the filing of the 
     bankruptcy petition, the debtor (or an adult dependent of the 
     debtor) complies with paragraph (1) and files with the court 
     and serves upon the lessor a further certification under 
     penalty of perjury that the debtor (or an adult dependent of 
     the debtor) has cured, under nonbankrupcty law applicable in 
     the jurisdiction, the entire monetary default that gave rise 
     to the judgment under which possession is sought by the 
     lessor, subsection (b)(22) shall not apply, unless ordered to 
     apply by the court under paragraph (3).
       ``(3)(A) If the lessor files an objection to any 
     certification filed by the debtor under paragraph (1) or (2), 
     and serves such objection upon the debtor, the court shall 
     hold a hearing within 10 days after the filing and service of 
     such objection to determine if the certification filed by the 
     debtor under paragraph (1) or (2) is true.
       ``(B) If the court upholds the objection of the lessor 
     filed under subparagraph (A)--
       ``(i) subsection (b)(22) shall apply immediately and relief 
     from the stay provided under subsection (a)(3) shall not be 
     required to enable the lessor to complete the process to 
     recover full possession of the property; and
       ``(ii) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the court's 
     order upholding the lessor's objection.
       ``(4) If a debtor, in accordance with paragraph (5), 
     indicates on the petition that there was a judgment for 
     possession of the residential rental property in which the 
     debtor resides and does not file a certification under 
     paragraph (1) or (2)--
       ``(A) subsection (b)(22) shall apply immediately upon 
     failure to file such certification, and relief from the stay 
     provided under subsection (a)(3) shall not be required to 
     enable the lessor to complete the process to recover full 
     possession of the property; and
       ``(B) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the docket 
     indicating the absence of a filed certification and the 
     applicability of the exception to the stay under subsection 
     (b)(22).
       ``(5)(A) Where a judgment for possession of residential 
     property in which the debtor resides as a tenant under a 
     lease or rental agreement has been obtained by the lessor, 
     the debtor shall so indicate on the bankruptcy petition and 
     shall provide the name and address of the lessor that 
     obtained that pre-petition judgment on the petition and on 
     any certification filed under this subsection.

[[Page 576]]

       ``(B) The form of certification filed with the petition, as 
     specified in this subsection, shall provide for the debtor to 
     certify, and the debtor shall certify--
       ``(i) whether a judgment for possession of residential 
     rental housing in which the debtor resides has been obtained 
     against the debtor before the date of the filing of the 
     petition; and
       ``(ii) whether the debtor is claiming under paragraph (1) 
     that under nonbankruptcy law applicable in the jurisdiction, 
     there are circumstances under which the debtor would be 
     permitted to cure the entire monetary default that gave rise 
     to the judgment for possession, after that judgment of 
     possession was entered, and has made the appropriate deposit 
     with the court.
       ``(C) The standard forms (electronic and otherwise) used in 
     a bankruptcy proceeding shall be amended to reflect the 
     requirements of this subsection.
       ``(D) The clerk of the court shall arrange for the prompt 
     transmittal of the rent deposited in accordance with 
     paragraph (1)(B) to the lessor.
       ``(m)(1) Except as otherwise provided in this subsection, 
     subsection (b)(23) shall apply on the date that is 15 days 
     after the date on which the lessor files and serves a 
     certification described in subsection (b)(23).
       ``(2)(A) If the debtor files with the court an objection to 
     the truth or legal sufficiency of the certification described 
     in subsection (b)(23) and serves such objection upon the 
     lessor, subsection (b)(23) shall not apply, unless ordered to 
     apply by the court under this subsection.
       ``(B) If the debtor files and serves the objection under 
     subparagraph (A), the court shall hold a hearing within 10 
     days after the filing and service of such objection to 
     determine if the situation giving rise to the lessor's 
     certification under paragraph (1) existed or has been 
     remedied.
       ``(C) If the debtor can demonstrate to the satisfaction of 
     the court that the situation giving rise to the lessor's 
     certification under paragraph (1) did not exist or has been 
     remedied, the stay provided under subsection (a)(3) shall 
     remain in effect until the termination of the stay under this 
     section.
       ``(D) If the debtor cannot demonstrate to the satisfaction 
     of the court that the situation giving rise to the lessor's 
     certification under paragraph (1) did not exist or has been 
     remedied--
       ``(i) relief from the stay provided under subsection (a)(3) 
     shall not be required to enable the lessor to proceed with 
     the eviction; and
       ``(ii) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the court's 
     order upholding the lessor's certification.
       ``(3) If the debtor fails to file, within 15 days, an 
     objection under paragraph (2)(A)--
       ``(A) subsection (b)(23) shall apply immediately upon such 
     failure and relief from the stay provided under subsection 
     (a)(3) shall not be required to enable the lessor to complete 
     the process to recover full possession of the property; and
       ``(B) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the docket 
     indicating such failure.''.

     SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

       Title 11, United States Code, is amended--
       (1) in section 727(a)(8), by striking ``six'' and inserting 
     ``8''; and
       (2) in section 1328, by inserting after subsection (e) the 
     following:
       ``(f) Notwithstanding subsections (a) and (b), the court 
     shall not grant a discharge of all debts provided for in the 
     plan or disallowed under section 502, if the debtor has 
     received a discharge--
       ``(1) in a case filed under chapter 7, 11, or 12 of this 
     title during the 4-year period preceding the date of the 
     order for relief under this chapter, or
       ``(2) in a case filed under chapter 13 of this title during 
     the 2-year period preceding the date of such order.''.

     SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

       (a) Definition.--Section 522(f) of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(4)(A) Subject to subparagraph (B), for purposes of 
     paragraph (1)(B), the term `household goods' means--
       ``(i) clothing;
       ``(ii) furniture;
       ``(iii) appliances;
       ``(iv) 1 radio;
       ``(v) 1 television;
       ``(vi) 1 VCR;
       ``(vii) linens;
       ``(viii) china;
       ``(ix) crockery;
       ``(x) kitchenware;
       ``(xi) educational materials and educational equipment 
     primarily for the use of minor dependent children of the 
     debtor;
       ``(xii) medical equipment and supplies;
       ``(xiii) furniture exclusively for the use of minor 
     children, or elderly or disabled dependents of the debtor;
       ``(xiv) personal effects (including the toys and hobby 
     equipment of minor dependent children and wedding rings) of 
     the debtor and the dependents of the debtor; and
       ``(xv) 1 personal computer and related equipment.
       ``(B) The term `household goods' does not include--
       ``(i) works of art (unless by or of the debtor, or any 
     relative of the debtor);
       ``(ii) electronic entertainment equipment with a fair 
     market value of more than $500 in the aggregate (except 1 
     television, 1 radio, and 1 VCR);
       ``(iii) items acquired as antiques with a fair market value 
     of more than $500 in the aggregate;
       ``(iv) jewelry with a fair market value of more than $500 
     in the aggregate (except wedding rings); and
       ``(v) a computer (except as otherwise provided for in this 
     section), motor vehicle (including a tractor or lawn 
     tractor), boat, or a motorized recreational device, 
     conveyance, vehicle, watercraft, or aircraft.''.
       (b) Study.--Not later than 2 years after the date of 
     enactment of this Act, the Director of the Executive Office 
     for United States Trustees shall submit a report to the 
     Committee on the Judiciary of the Senate and the Committee on 
     the Judiciary of the House of Representatives containing its 
     findings regarding utilization of the definition of household 
     goods, as defined in section 522(f)(4) of title 11, United 
     States Code, as added by subsection (a), with respect to the 
     avoidance of nonpossessory, nonpurchase money security 
     interests in household goods under section 522(f)(1)(B) of 
     title 11, United States Code, and the impact such section 
     522(f)(4) has had on debtors and on the bankruptcy courts. 
     Such report may include recommendations for amendments to 
     such section 522(f)(4) consistent with the Director's 
     findings.

     SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.

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

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

       (a) Notice.--Section 342 of title 11, United States Code, 
     as amended by section 102, is amended--
       (1) in subsection (c)--
       (A) by inserting ``(1)'' after ``(c)'';
       (B) by striking ``, but the failure of such notice to 
     contain such information shall not invalidate the legal 
     effect of such notice''; and
       (C) by adding at the end the following:
       ``(2)(A) If, within the 90 days before the commencement of 
     a voluntary case, a creditor supplies the debtor in at least 
     2 communications sent to the debtor with the current account 
     number of the debtor and the address at which such creditor 
     requests to receive correspondence, then any notice required 
     by this title to be sent by the debtor to such creditor shall 
     be sent to such address and shall include such account 
     number.
       ``(B) If a creditor would be in violation of applicable 
     nonbankruptcy law by sending any such communication within 
     such 90-day period and if such creditor supplies the debtor 
     in the last 2 communications with the current account number 
     of the debtor and the address at which such creditor requests 
     to receive correspondence, then any notice required by this 
     title to be sent by the debtor to such creditor shall be sent 
     to such address and shall include such account number.''; and
       (2) by adding at the end the following:
       ``(e)(1) In a case under chapter 7 or 13 of this title of a 
     debtor who is an individual, a creditor at any time may both 
     file with the court and serve on the debtor a notice of 
     address to be used to provide notice in such case to such 
     creditor.
       ``(2) Any notice in such case required to be provided to 
     such creditor by the debtor or the court later than 5 days 
     after the court and the debtor receive such creditor's notice 
     of address, shall be provided to such address.
       ``(f)(1) An entity may file with any bankruptcy court a 
     notice of address to be used by all the bankruptcy courts or 
     by particular bankruptcy courts, as so specified by such 
     entity at the time such notice is filed, to provide notice to 
     such entity in all cases under chapters 7 and 13 pending in 
     the courts with respect to which such notice is filed, in 
     which such entity is a creditor.
       ``(2) In any case filed under chapter 7 or 13, any notice 
     required to be provided by a court with respect to which a 
     notice is filed under paragraph (1), to such entity later 
     than 30 days after the filing of such notice under

[[Page 577]]

     paragraph (1) shall be provided to such address unless with 
     respect to a particular case a different address is specified 
     in a notice filed and served in accordance with subsection 
     (e).
       ``(3) A notice filed under paragraph (1) may be withdrawn 
     by such entity.
       ``(g)(1) Notice provided to a creditor by the debtor or the 
     court other than in accordance with this section (excluding 
     this subsection) shall not be effective notice until such 
     notice is brought to the attention of such creditor. If such 
     creditor designates a person or an organizational subdivision 
     of such creditor to be responsible for receiving notices 
     under this title and establishes reasonable procedures so 
     that such notices receivable by such creditor are to be 
     delivered to such person or such subdivision, then a notice 
     provided to such creditor other than in accordance with this 
     section (excluding this subsection) shall not be considered 
     to have been brought to the attention of such creditor until 
     such notice is received by such person or such subdivision.
       ``(2) A monetary penalty may not be imposed on a creditor 
     for a violation of a stay in effect under section 362(a) 
     (including a monetary penalty imposed under section 362(k)) 
     or for failure to comply with section 542 or 543 unless the 
     conduct that is the basis of such violation or of such 
     failure occurs after such creditor receives notice effective 
     under this section of the order for relief.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 106, 225, and 305, is 
     amended--
       (1) in subsection (a), as so designated by section 106, by 
     amending paragraph (1) to read as follows:
       ``(1) file--
       ``(A) a list of creditors; and
       ``(B) unless the court orders otherwise--
       ``(i) a schedule of assets and liabilities;
       ``(ii) a schedule of current income and current 
     expenditures;
       ``(iii) a statement of the debtor's financial affairs and, 
     if section 342(b) applies, a certificate--

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

       ``(iv) copies of all payment advices or other evidence of 
     payment received within 60 days before the date of the filing 
     of the petition, by the debtor from any employer of the 
     debtor;
       ``(v) a statement of the amount of monthly net income, 
     itemized to show how the amount is calculated; and
       ``(vi) a statement disclosing any reasonably anticipated 
     increase in income or expenditures over the 12-month period 
     following the date of the filing of the petition;''; and
       (2) by adding at the end the following:
       ``(e)(1) If the debtor in a case under chapter 7 or 13 is 
     an individual and if a creditor files with the court at any 
     time a request to receive a copy of the petition, schedules, 
     and statement of financial affairs filed by the debtor, then 
     the court shall make such petition, such schedules, and such 
     statement available to such creditor.
       ``(2)(A) The debtor shall provide--
       ``(i) not later than 7 days before the date first set for 
     the first meeting of creditors, to the trustee a copy of the 
     Federal income tax return required under applicable law (or 
     at the election of the debtor, a transcript of such return) 
     for the most recent tax year ending immediately before the 
     commencement of the case and for which a Federal income tax 
     return was filed; and
       ``(ii) at the same time the debtor complies with clause 
     (i), a copy of such return (or if elected under clause (i), 
     such transcript) to any creditor that timely requests such 
     copy.
       ``(B) If the debtor fails to comply with clause (i) or (ii) 
     of subparagraph (A), the court shall dismiss the case unless 
     the debtor demonstrates that the failure to so comply is due 
     to circumstances beyond the control of the debtor.
       ``(C) If a creditor requests a copy of such tax return or 
     such transcript and if the debtor fails to provide a copy of 
     such tax return or such transcript to such creditor at the 
     time the debtor provides such tax return or such transcript 
     to the trustee, then the court shall dismiss the case unless 
     the debtor demonstrates that the failure to provide a copy of 
     such tax return or such transcript is due to circumstances 
     beyond the control of the debtor.
       ``(3) If a creditor in a case under chapter 13 files with 
     the court at any time a request to receive a copy of the plan 
     filed by the debtor, then the court shall make available to 
     such creditor a copy of the plan--
       ``(A) at a reasonable cost; and
       ``(B) not later than 5 days after such request is filed.
       ``(f) At the request of the court, the United States 
     trustee, or any party in interest in a case under chapter 7, 
     11, or 13, a debtor who is an individual shall file with the 
     court--
       ``(1) at the same time filed with the taxing authority, a 
     copy of each Federal income tax return required under 
     applicable law (or at the election of the debtor, a 
     transcript of such tax return) with respect to each tax year 
     of the debtor ending while the case is pending under such 
     chapter;
       ``(2) at the same time filed with the taxing authority, 
     each Federal income tax return required under applicable law 
     (or at the election of the debtor, a transcript of such tax 
     return) that had not been filed with such authority as of the 
     date of the commencement of the case and that was 
     subsequently filed for any tax year of the debtor ending in 
     the 3-year period ending on the date of the commencement of 
     the case;
       ``(3) a copy of each amendment to any Federal income tax 
     return or transcript filed with the court under paragraph (1) 
     or (2); and
       ``(4) in a case under chapter 13--
       ``(A) on the date that is either 90 days after the end of 
     such tax year or 1 year after the date of the commencement of 
     the case, whichever is later, if a plan is not confirmed 
     before such later date; and
       ``(B) annually after the plan is confirmed and until the 
     case is closed, not later than the date that is 45 days 
     before the anniversary of the confirmation of the plan;
     a statement, under penalty of perjury, of the income and 
     expenditures of the debtor during the tax year of the debtor 
     most recently concluded before such statement is filed under 
     this paragraph, and of the monthly income of the debtor, that 
     shows how income, expenditures, and monthly income are 
     calculated.
       ``(g)(1) A statement referred to in subsection (f)(4) shall 
     disclose--
       ``(A) the amount and sources of the income of the debtor;
       ``(B) the identity of any person responsible with the 
     debtor for the support of any dependent of the debtor; and
       ``(C) the identity of any person who contributed, and the 
     amount contributed, to the household in which the debtor 
     resides.
       ``(2) The tax returns, amendments, and statement of income 
     and expenditures described in subsections (e)(2)(A) and (f) 
     shall be available to the United States trustee (or the 
     bankruptcy administrator, if any), the trustee, and any party 
     in interest for inspection and copying, subject to the 
     requirements of section 315(c) of the Bankruptcy Abuse 
     Prevention and Consumer Protection Act of 2003.
       ``(h) If requested by the United States trustee or by the 
     trustee, the debtor shall provide--
       ``(1) a document that establishes the identity of the 
     debtor, including a driver's license, passport, or other 
     document that contains a photograph of the debtor; or
       ``(2) such other personal identifying information relating 
     to the debtor that establishes the identity of the debtor.''.
       (c)(1) Not later than 180 days after the date of the 
     enactment of this Act, the Director of the Administrative 
     Office of the United States Courts shall establish procedures 
     for safeguarding the confidentiality of any tax information 
     required to be provided under this section.
       (2) The procedures under paragraph (1) shall include 
     restrictions on creditor access to tax information that is 
     required to be provided under this section.
       (3) Not later than 540 days after the date of enactment of 
     this Act, the Director of the Administrative Office of the 
     United States Courts shall prepare and submit to the 
     President pro tempore of the Senate and the Speaker of the 
     House of Representatives a report that--
       (A) assesses the effectiveness of the procedures 
     established under paragraph (1); and
       (B) if appropriate, includes proposed legislation to--
       (i) further protect the confidentiality of tax information; 
     and
       (ii) provide penalties for the improper use by any person 
     of the tax information required to be provided under this 
     section.

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

       Section 521 of title 11, United States Code, as amended by 
     sections 106, 225, 305, and 315, is amended by adding at the 
     end the following:
       ``(i)(1) Subject to paragraphs (2) and (4) and 
     notwithstanding section 707(a), if an individual debtor in a 
     voluntary case under chapter 7 or 13 fails to file all of the 
     information required under subsection (a)(1) within 45 days 
     after the date of the filing of the petition, the case shall 
     be automatically dismissed effective on the 46th day after 
     the date of the filing of the petition.
       ``(2) Subject to paragraph (4) and with respect to a case 
     described in paragraph (1), any party in interest may request 
     the court to enter an order dismissing the case. If 
     requested, the court shall enter an order of dismissal not 
     later than 5 days after such request.
       ``(3) Subject to paragraph (4) and upon request of the 
     debtor made within 45 days after the date of the filing of 
     the petition described in paragraph (1), the court may allow 
     the debtor an additional period of not to exceed 45 days to 
     file the information required under subsection (a)(1) if the 
     court finds justification for extending the period for the 
     filing.
       ``(4) Notwithstanding any other provision of this 
     subsection, on the motion of the

[[Page 578]]

     trustee filed before the expiration of the applicable period 
     of time specified in paragraph (1), (2), or (3), and after 
     notice and a hearing, the court may decline to dismiss the 
     case if the court finds that the debtor attempted in good 
     faith to file all the information required by subsection 
     (a)(1)(B)(iv) and that the best interests of creditors would 
     be served by administration of the case.''.

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

       Section 1324 of title 11, United States Code, is amended--
       (1) by striking ``After'' and inserting the following:
       ``(a) Except as provided in subsection (b) and after''; and
       (2) by adding at the end the following:
       ``(b) The hearing on confirmation of the plan may be held 
     not earlier than 20 days and not later than 45 days after the 
     date of the meeting of creditors under section 341(a), unless 
     the court determines that it would be in the best interests 
     of the creditors and the estate to hold such hearing at an 
     earlier date and there is no objection to such earlier 
     date.''.

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

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

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

     the plan may not provide for payments over a period that is 
     longer than 3 years, unless the court, for cause, approves a 
     longer period, but the court may not approve a period that is 
     longer than 5 years.'';
       (2) in section 1325(b)(1)(B), by striking ``three-year 
     period'' and inserting ``applicable commitment period''; and
       (3) in section 1325(b), as amended by section 102, by 
     adding at the end the following:
       ``(4) For purposes of this subsection, the `applicable 
     commitment period'--
       ``(A) subject to subparagraph (B), shall be--
       ``(i) 3 years; or
       ``(ii) not less than 5 years, if the current monthly income 
     of the debtor and the debtor's spouse combined, when 
     multiplied by 12, is not less than--
       ``(I) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(II) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(III) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4; and
       ``(B) may be less than 3 or 5 years, whichever is 
     applicable under subparagraph (A), but only if the plan 
     provides for payment in full of all allowed unsecured claims 
     over a shorter period.''; and
       (4) in section 1329(c), by striking ``three years'' and 
     inserting ``the applicable commitment period under section 
     1325(b)(1)(B)''.

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

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

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

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

     SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.

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

     ``Sec. 1115. Property of the estate

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

``1115. Property of the estate.''.
       (b) Contents of Plan.--Section 1123(a) of title 11, United 
     States Code, is amended--
       (1) in paragraph (6), by striking ``and'' at the end;
       (2) in paragraph (7), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(8) in a case in which the debtor is an individual, 
     provide for the payment to creditors under the plan of all or 
     such portion of earnings from personal services performed by 
     the debtor after the commencement of the case or other future 
     income of the debtor as is necessary for the execution of the 
     plan.''.
       (c) Confirmation of Plan.--
       (1) Requirements relating to value of property.--Section 
     1129(a) of title 11, United States Code, as amended by 
     section 213, is amended by adding at the end the following:
       ``(15) In a case in which the debtor is an individual and 
     in which the holder of an allowed unsecured claim objects to 
     the confirmation of the plan--
       ``(A) the value, as of the effective date of the plan, of 
     the property to be distributed under the plan on account of 
     such claim is not less than the amount of such claim; or
       ``(B) the value of the property to be distributed under the 
     plan is not less than the projected disposable income of the 
     debtor (as defined in section 1325(b)(2)) to be received 
     during the 5-year period beginning on the date that the first 
     payment is due under the plan, or during the period for which 
     the plan provides payments, whichever is longer.''.
       (2) Requirement relating to interests in property.--Section 
     1129(b)(2)(B)(ii) of title 11, United States Code, is amended 
     by inserting before the period at the end the following: ``, 
     except that in a case in which the debtor is an individual, 
     the debtor may retain property included in the estate under 
     section 1115, subject to the requirements of subsection 
     (a)(14) of this section''.
       (d) Effect of Confirmation.--Section 1141(d) of title 11, 
     United States Code, is amended--
       (1) in paragraph (2), by striking ``The confirmation of a 
     plan does not discharge an individual debtor'' and inserting 
     ``A discharge under this chapter does not discharge a debtor 
     who is an individual''; and
       (2) by adding at the end the following:
       ``(5) In a case in which the debtor is an individual--
       ``(A) unless after notice and a hearing the court orders 
     otherwise for cause, confirmation of the plan does not 
     discharge any debt provided for in the plan until the court 
     grants a discharge on completion of all payments under the 
     plan;
       ``(B) at any time after the confirmation of the plan, and 
     after notice and a hearing, the court may grant a discharge 
     to the debtor who has not completed payments under the plan 
     if--
       ``(i) the value, as of the effective date of the plan, of 
     property actually distributed under the plan on account of 
     each allowed unsecured claim is not less than the amount that 
     would have been paid on such claim if the estate of the 
     debtor had been liquidated under chapter 7 on such date; and
       ``(ii) modification of the plan under section 1127 is not 
     practicable; and''.

[[Page 579]]

       (e) Modification of Plan.--Section 1127 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(e) If the debtor is an individual, the plan may be 
     modified at any time after confirmation of the plan but 
     before the completion of payments under the plan, whether or 
     not the plan has been substantially consummated, upon request 
     of the debtor, the trustee, the United States trustee, or the 
     holder of an allowed unsecured claim, to--
       ``(1) increase or reduce the amount of payments on claims 
     of a particular class provided for by the plan;
       ``(2) extend or reduce the time period for such payments; 
     or
       ``(3) alter the amount of the distribution to a creditor 
     whose claim is provided for by the plan to the extent 
     necessary to take account of any payment of such claim made 
     other than under the plan.
       ``(f)(1) Sections 1121 through 1128 and the requirements of 
     section 1129 apply to any modification under subsection (a).
       ``(2) The plan, as modified, shall become the plan only 
     after there has been disclosure under section 1125 as the 
     court may direct, notice and a hearing, and such modification 
     is approved.''.

     SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION.

       (a) Exemptions.--Section 522 of title 11, United States 
     Code, as amended by sections 224 and 308, is amended by 
     adding at the end the following:
       ``(p)(1) Except as provided in paragraph (2) of this 
     subsection and sections 544 and 548, as a result of electing 
     under subsection (b)(3)(A) to exempt property under State or 
     local law, a debtor may not exempt any amount of interest 
     that was acquired by the debtor during the 1215-day period 
     preceding the date of the filing of the petition that exceeds 
     in the aggregate $125,000 in value in--
       ``(A) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(B) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(C) a burial plot for the debtor or a dependent of the 
     debtor; or
       ``(D) real or personal property that the debtor or 
     dependent of the debtor claims as a homestead.
       ``(2)(A) The limitation under paragraph (1) shall not apply 
     to an exemption claimed under subsection (b)(3)(A) by a 
     family farmer for the principal residence of such farmer.
       ``(B) For purposes of paragraph (1), any amount of such 
     interest does not include any interest transferred from a 
     debtor's previous principal residence (which was acquired 
     prior to the beginning of such 1215-day period) into the 
     debtor's current principal residence, if the debtor's 
     previous and current residences are located in the same 
     State.
       ``(q)(1) As a result of electing under subsection (b)(3)(A) 
     to exempt property under State or local law, a debtor may not 
     exempt any amount of an interest in property described in 
     subparagraphs (A), (B), (C), and (D) of subsection (p)(1) 
     which exceeds in the aggregate $125,000 if--
       ``(A) the court determines, after notice and a hearing, 
     that the debtor has been convicted of a felony (as defined in 
     section 3156 of title 18), which under the circumstances, 
     demonstrates that the filing of the case was an abuse of the 
     provisions of this title; or
       ``(B) the debtor owes a debt arising from--
       ``(i) any violation of the Federal securities laws (as 
     defined in section 3(a)(47) of the Securities Exchange Act of 
     1934), any State securities laws, or any regulation or order 
     issued under Federal securities laws or State securities 
     laws;
       ``(ii) fraud, deceit, or manipulation in a fiduciary 
     capacity or in connection with the purchase or sale of any 
     security registered under section 12 or 15(d) of the 
     Securities Exchange Act of 1934 or under section 6 of the 
     Securities Act of 1933;
       ``(iii) any civil remedy under section 1964 of title 18; or
       ``(iv) any criminal act, intentional tort, or willful or 
     reckless misconduct that caused serious physical injury or 
     death to another individual in the preceding 5 years.
       ``(2) Paragraph (1) shall not apply to the extent the 
     amount of an interest in property described in subparagraphs 
     (A), (B), (C), and (D) of subsection (p)(1) is reasonably 
     necessary for the support of the debtor and any dependent of 
     the debtor.''.
       (b) Adjustment of Dollar Amounts.--Paragraphs (1) and (2) 
     of section 104(b) of title 11, United States Code, as amended 
     by section 224, are amended by inserting ``522(p), 522(q),'' 
     after ``522(n),''.

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

       Section 541(b) of title 11, United States Code, as amended 
     by section 225, is amended by adding after paragraph (6), as 
     added by section 225(a)(1)(C), the following:
       ``(7) any amount--
       ``(A) withheld by an employer from the wages of employees 
     for payment as contributions--
       ``(i) to--

       ``(I) an employee benefit plan that is subject to title I 
     of the Employee Retirement Income Security Act of 1974 or 
     under an employee benefit plan which is a governmental plan 
     under section 414(d) of the Internal Revenue Code of 1986;
       ``(II) a deferred compensation plan under section 457 of 
     the Internal Revenue Code of 1986; or
       ``(III) a tax-deferred annuity under section 403(b) of the 
     Internal Revenue Code of 1986;

     except that such amount under this subparagraph shall not 
     constitute disposable income as defined in section 
     1325(b)(2); or
       ``(ii) to a health insurance plan regulated by State law 
     whether or not subject to such title; or
       ``(B) received by an employer from employees for payment as 
     contributions--
       ``(i) to--

       ``(I) an employee benefit plan that is subject to title I 
     of the Employee Retirement Income Security Act of 1974 or 
     under an employee benefit plan which is a governmental plan 
     under section 414(d) of the Internal Revenue Code of 1986;
       ``(II) a deferred compensation plan under section 457 of 
     the Internal Revenue Code of 1986; or
       ``(III) a tax-deferred annuity under section 403(b) of the 
     Internal Revenue Code of 1986;

     except that such amount under this subparagraph shall not 
     constitute disposable income, as defined in section 
     1325(b)(2); or
       ``(ii) to a health insurance plan regulated by State law 
     whether or not subject to such title;''.

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

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

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

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

     SEC. 326. SHARING OF COMPENSATION.

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

     SEC. 327. FAIR VALUATION OF COLLATERAL.

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

[[Page 580]]

     would charge for property of that kind considering the age 
     and condition of the property at the time value is 
     determined.''.

     SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

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

     SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.

       Section 503(b)(1)(A) of title 11, United States Code, is 
     amended to read as follows:
     ``(A) the actual, necessary costs and expenses of preserving 
     the estate including--
       ``(i) wages, salaries, and commissions for services 
     rendered after the commencement of the case; and
       ``(ii) wages and benefits awarded pursuant to a judicial 
     proceeding or a proceeding of the National Labor Relations 
     Board as back pay attributable to any period of time 
     occurring after commencement of the case under this title, as 
     a result of a violation of Federal or State law by the 
     debtor, without regard to the time of the occurrence of 
     unlawful conduct on which such award is based or to whether 
     any services were rendered, if the court determines that 
     payment of wages and benefits by reason of the operation of 
     this clause will not substantially increase the probability 
     of layoff or termination of current employees, or of 
     nonpayment of domestic support obligations, during the case 
     under this title;''.

     SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF CERTAIN 
                   PROCEEDINGS.

       (a) Chapter 7.--Section 727(a) of title 11, United States 
     Code, as amended by section 106, is amended--
       (1) in paragraph (10), by striking ``or'' at the end;
       (2) in paragraph (11) by striking the period at the end and 
     inserting ``; or''; and
       (3) by inserting after paragraph (11) the following:
       ``(12) the court after notice and a hearing held not more 
     than 10 days before the date of the entry of the order 
     granting the discharge finds that there is reasonable cause 
     to believe that--
       ``(A) section 522(q)(1) may be applicable to the debtor; 
     and
       ``(B) there is pending any proceeding in which the debtor 
     may be found guilty of a felony of the kind described in 
     section 522(q)(1)(A) or liable for a debt of the kind 
     described in section 522(q)(1)(B).''.
       (b) Chapter 11.--Section 1141(d) of title 11, United States 
     Code, as amended by section 321, is amended by adding at the 
     end the following:
       ``(C) unless after notice and a hearing held not more than 
     10 days before the date of the entry of the order granting 
     the discharge, the court finds that there is no reasonable 
     cause to believe that--
       ``(i) section 522(q)(1) may be applicable to the debtor; 
     and
       ``(ii) there is pending any proceeding in which the debtor 
     may be found guilty of a felony of the kind described in 
     section 522(q)(1)(A) or liable for a debt of the kind 
     described in section 522(q)(1)(B).''.
       (c) Chapter 12.--Section 1228 of title 11, United States 
     Code, is amended--
       (1) in subsection (a) by striking ``As'' and inserting 
     ``Subject to subsection (d), as'',
       (2) in subsection (b) by striking ``At'' and inserting 
     ``Subject to subsection (d), at'', and
       (3) by adding at the end the following:
       ``(f) The court may not grant a discharge under this 
     chapter unless the court after notice and a hearing held not 
     more than 10 days before the date of the entry of the order 
     granting the discharge finds that there is no reasonable 
     cause to believe that--
       ``(1) section 522(q)(1) may be applicable to the debtor; 
     and
       ``(2) there is pending any proceeding in which the debtor 
     may be found guilty of a felony of the kind described in 
     section 522(q)(1)(A) or liable for a debt of the kind 
     described in section 522(q)(1)(B).''.
       (d) Chapter 13.--Section 1328 of title 11, United States 
     Code, as amended by section 106, is amended--
       (1) in subsection (a) by striking ``As'' and inserting 
     ``Subject to subsection (d), as'',
       (2) in subsection (b) by striking ``At'' and inserting 
     ``Subject to subsection (d), at'', and
       (3) by adding at the end the following:
       ``(h) The court may not grant a discharge under this 
     chapter unless the court after notice and a hearing held not 
     more than 10 days before the date of the entry of the order 
     granting the discharge finds that there is no reasonable 
     cause to believe that--
       ``(1) section 522(q)(1) may be applicable to the debtor; 
     and
       ``(2) there is pending any proceeding in which the debtor 
     may be found guilty of a felony of the kind described in 
     section 522(q)(1)(A) or liable for a debt of the kind 
     described in section 522(q)(1)(B).''.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

     SEC. 401. ADEQUATE PROTECTION FOR INVESTORS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (48) the 
     following:
       ``(48A) `securities self regulatory organization' means 
     either a securities association registered with the 
     Securities and Exchange Commission under section 15A of the 
     Securities Exchange Act of 1934 or a national securities 
     exchange registered with the Securities and Exchange 
     Commission under section 6 of the Securities Exchange Act of 
     1934;''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, as amended by sections 224, 303, and 311, is 
     amended by inserting after paragraph (24) the following:
       ``(25) under subsection (a), of--
       ``(A) the commencement or continuation of an investigation 
     or action by a securities self regulatory organization to 
     enforce such organization's regulatory power;
       ``(B) the enforcement of an order or decision, other than 
     for monetary sanctions, obtained in an action by such 
     securities self regulatory organization to enforce such 
     organization's regulatory power; or
       ``(C) any act taken by such securities self regulatory 
     organization to delist, delete, or refuse to permit quotation 
     of any stock that does not meet applicable regulatory 
     requirements;''.

     SEC. 402. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.

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

     SEC. 403. PROTECTION OF REFINANCE OF SECURITY INTEREST.

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

     SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

       (a) In General.--Section 365(d)(4) of title 11, United 
     States Code, is amended to read as follows:
       ``(4)(A) Subject to subparagraph (B), an unexpired lease of 
     nonresidential real property under which the debtor is the 
     lessee shall be deemed rejected, and the trustee shall 
     immediately surrender that nonresidential real property to 
     the lessor, if the trustee does not assume or reject the 
     unexpired lease by the earlier of--
       ``(i) the date that is 120 days after the date of the order 
     for relief; or
       ``(ii) the date of the entry of an order confirming a plan.
       ``(B)(i) The court may extend the period determined under 
     subparagraph (A), prior to the expiration of the 120-day 
     period, for 90 days on the motion of the trustee or lessor 
     for cause.

[[Page 581]]

       ``(ii) If the court grants an extension under clause (i), 
     the court may grant a subsequent extension only upon prior 
     written consent of the lessor in each instance.''.
       (b) Exception.--Section 365(f)(1) of title 11, United 
     States Code, is amended by striking ``subsection'' the first 
     place it appears and inserting ``subsections (b) and''.

     SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

       (a) Appointment.--Section 1102(a) of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(4) On request of a party in interest and after notice 
     and a hearing, the court may order the United States trustee 
     to change the membership of a committee appointed under this 
     subsection, if the court determines that the change is 
     necessary to ensure adequate representation of creditors or 
     equity security holders. The court may order the United 
     States trustee to increase the number of members of a 
     committee to include a creditor that is a small business 
     concern (as described in section 3(a)(1) of the Small 
     Business Act), if the court determines that the creditor 
     holds claims (of the kind represented by the committee) the 
     aggregate amount of which, in comparison to the annual gross 
     revenue of that creditor, is disproportionately large.''.
       (b) Information.--Section 1102(b) of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(3) A committee appointed under subsection (a) shall--
       ``(A) provide access to information for creditors who--
       ``(i) hold claims of the kind represented by that 
     committee; and
       ``(ii) are not appointed to the committee;
       ``(B) solicit and receive comments from the creditors 
     described in subparagraph (A); and
       ``(C) be subject to a court order that compels any 
     additional report or disclosure to be made to the creditors 
     described in subparagraph (A).''.

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

       Section 546 of title 11, United States Code, is amended--
       (1) by redesignating the second subsection (g) (as added by 
     section 222(a) of Public Law 103-394) as subsection (h);
       (2) in subsection (h), as so redesignated, by inserting 
     ``and subject to the prior rights of holders of security 
     interests in such goods or the proceeds of such goods'' after 
     ``consent of a creditor''; and
       (3) by adding at the end the following:
       ``(i)(1) Notwithstanding paragraphs (2) and (3) of section 
     545, the trustee may not avoid a warehouseman's lien for 
     storage, transportation, or other costs incidental to the 
     storage and handling of goods.
       ``(2) The prohibition under paragraph (1) shall be applied 
     in a manner consistent with any State statute applicable to 
     such lien that is similar to section 7-209 of the Uniform 
     Commercial Code, as in effect on the date of enactment of the 
     Bankruptcy Abuse Prevention and Consumer Protection Act of 
     2003, or any successor to such section 7-209.''.

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

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

     SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION.

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

     SEC. 409. PREFERENCES.

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

     SEC. 410. VENUE OF CERTAIN PROCEEDINGS.

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

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

       Section 1121(d) of title 11, United States Code, is 
     amended--
       (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, is 
     amended--
       (1) in subparagraph (D), by striking ``and'' at the end;
       (2) by redesignating subparagraph (E) as subparagraph (F); 
     and
       (3) by inserting after subparagraph (D) the following:
       ``(E) with respect to a professional person, whether the 
     person is board certified or otherwise has demonstrated skill 
     and experience in the bankruptcy field; and''.

     SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.

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

     SEC. 417. UTILITY SERVICE.

       Section 366 of title 11, United States Code, is amended--
       (1) in subsection (a), by striking ``subsection (b)'' and 
     inserting ``subsections (b) and (c)''; and
       (2) by adding at the end the following:
       ``(c)(1)(A) For purposes of this subsection, the term 
     `assurance of payment' means--
       ``(i) a cash deposit;
       ``(ii) a letter of credit;
       ``(iii) a certificate of deposit;
       ``(iv) a surety bond;
       ``(v) a prepayment of utility consumption; or
       ``(vi) another form of security that is mutually agreed on 
     between the utility and the debtor or the trustee.

[[Page 582]]

       ``(B) For purposes of this subsection an administrative 
     expense priority shall not constitute an assurance of 
     payment.
       ``(2) Subject to paragraphs (3) and (4), with respect to a 
     case filed under chapter 11, a utility referred to in 
     subsection (a) may alter, refuse, or discontinue utility 
     service, if during the 30-day period beginning on the date of 
     the filing of the petition, the utility does not receive from 
     the debtor or the trustee adequate assurance of payment for 
     utility service that is satisfactory to the utility.
       ``(3)(A) On request of a party in interest and after notice 
     and a hearing, the court may order modification of the amount 
     of an assurance of payment under paragraph (2).
       ``(B) In making a determination under this paragraph 
     whether an assurance of payment is adequate, the court may 
     not consider--
       ``(i) the absence of security before the date of the filing 
     of the petition;
       ``(ii) the payment by the debtor of charges for utility 
     service in a timely manner before the date of the filing of 
     the petition; or
       ``(iii) the availability of an administrative expense 
     priority.
       ``(4) Notwithstanding any other provision of law, with 
     respect to a case subject to this subsection, a utility may 
     recover or set off against a security deposit provided to the 
     utility by the debtor before the date of the filing of the 
     petition without notice or order of the court.''.

     SEC. 418. BANKRUPTCY FEES.

       Section 1930 of title 28, United States Code, is amended--
       (1) in subsection (a), by striking ``Notwithstanding 
     section 1915 of this title, the'' and inserting ``The''; and
       (2) by adding at the end the following:
       ``(f)(1) Under the procedures prescribed by the Judicial 
     Conference of the United States, the district court or the 
     bankruptcy court may waive the filing fee in a case under 
     chapter 7 of title 11 for an individual if the court 
     determines that such individual has income less than 150 
     percent of the income official poverty line (as defined by 
     the Office of Management and Budget, and revised annually in 
     accordance with section 673(2) of the Omnibus Budget 
     Reconciliation Act of 1981) applicable to a family of the 
     size involved and is unable to pay that fee in installments. 
     For purposes of this paragraph, the term `filing fee' means 
     the filing required by subsection (a), or any other fee 
     prescribed by the Judicial Conference under subsections (b) 
     and (c) that is payable to the clerk upon the commencement of 
     a case under chapter 7.
       ``(2) The district court or the bankruptcy court may waive 
     for such debtors other fees prescribed under subsections (b) 
     and (c).
       ``(3) This subsection does not restrict the district court 
     or the bankruptcy court from waiving, in accordance with 
     Judicial Conference policy, fees prescribed under this 
     section for other debtors and creditors.''.

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

       (a) In General.--
       (1) Disclosure.--The Judicial Conference of the United 
     States, in accordance with section 2075 of title 28 of the 
     United States Code and after consideration of the views of 
     the Director of the Executive Office for United States 
     Trustees, shall propose amended Federal Rules of Bankruptcy 
     Procedure and in accordance with rule 9009 of the Federal 
     Rules of Bankruptcy Procedure shall prescribe official 
     bankruptcy forms directing debtors under chapter 11 of title 
     11 of United States Code, to disclose the information 
     described in paragraph (2) by filing and serving periodic 
     financial and other reports designed to provide such 
     information.
       (2) Information.--The information referred to in paragraph 
     (1) is the value, operations, and profitability of any 
     closely held corporation, partnership, or of any other entity 
     in which the debtor holds a substantial or controlling 
     interest.
       (b) Purpose.--The purpose of the rules and reports under 
     subsection (a) shall be to assist parties in interest taking 
     steps to ensure that the debtor's interest in any entity 
     referred to in subsection (a)(2) is used for the payment of 
     allowed claims against debtor.

            Subtitle B--Small Business Bankruptcy Provisions

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

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

     SEC. 432. DEFINITIONS.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended by striking paragraph (51C) and inserting 
     the following:
       ``(51C) `small business case' means a case filed under 
     chapter 11 of this title in which the debtor is a small 
     business debtor;
       ``(51D) `small business debtor'--
       ``(A) subject to subparagraph (B), means a person engaged 
     in commercial or business activities (including any affiliate 
     of such person that is also a debtor under this title and 
     excluding a person whose primary activity is the business of 
     owning or operating real property or activities incidental 
     thereto) that has aggregate noncontingent liquidated secured 
     and unsecured debts as of the date of the petition or the 
     date of the order for relief in an amount not more than 
     $2,000,000 (excluding debts owed to 1 or more affiliates or 
     insiders) for a case in which the United States trustee has 
     not appointed under section 1102(a)(1) a committee of 
     unsecured creditors or where the court has determined that 
     the committee of unsecured creditors is not sufficiently 
     active and representative to provide effective oversight of 
     the debtor; and
       ``(B) does not include any member of a group of affiliated 
     debtors that has aggregate noncontingent liquidated secured 
     and unsecured debts in an amount greater than $2,000,000 
     (excluding debt owed to 1 or more affiliates or insiders);''.
       (b) Conforming Amendment.--Section 1102(a)(3) of title 11, 
     United States Code, is amended by inserting ``debtor'' after 
     ``small business''.
       (c) Adjustment of Dollar Amounts.--Section 104(b) of title 
     11, United States Code, as amended by section 226, is amended 
     by inserting ``101(51D),'' after ``101(3),'' each place it 
     appears.

     SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

       Within a reasonable period of time after the date of 
     enactment of this Act, the Judicial Conference of the United 
     States shall prescribe in accordance with rule 9009 of the 
     Federal Rules of Bankruptcy Procedure official standard form 
     disclosure statements and plans of reorganization for small 
     business debtors (as defined in section 101 of title 11, 
     United States Code, as amended by this Act), designed to 
     achieve a practical balance between--
       (1) the reasonable needs of the courts, the United States 
     trustee, creditors, and other parties in interest for 
     reasonably complete information; and
       (2) economy and simplicity for debtors.

     SEC. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.

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

     ``Sec. 308. Debtor reporting requirements

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

``308. Debtor reporting requirements.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect 60

[[Page 583]]

     days after the date on which rules are prescribed under 
     section 2075 of title 28, United States Code, to establish 
     forms to be used to comply with section 308 of title 11, 
     United States Code, as added by subsection (a).

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

       (a) Proposal of Rules and Forms.--The Judicial Conference 
     of the United States shall propose in accordance with section 
     2073 of title 28 of the United States Code amended Federal 
     Rules of Bankruptcy Procedure, and shall prescribe in 
     accordance with rule 9009 of the Federal Rules of Bankruptcy 
     Procedure official bankruptcy forms, directing small business 
     debtors to file periodic financial and other reports 
     containing information, including information relating to--
       (1) the debtor's profitability;
       (2) the debtor's cash receipts and disbursements; and
       (3) whether the debtor is timely filing tax returns and 
     paying taxes and other administrative expenses when due.
       (b) Purpose.--The rules and forms proposed under subsection 
     (a) shall be designed to achieve a practical balance among--
       (1) the reasonable needs of the bankruptcy court, the 
     United States trustee, creditors, and other parties in 
     interest for reasonably complete information;
       (2) a small business debtor's interest that required 
     reports be easy and inexpensive to complete; and
       (3) the interest of all parties that the required reports 
     help such debtor to understand such debtor's financial 
     condition and plan the such debtor's future.

     SEC. 436. DUTIES IN SMALL BUSINESS CASES.

       (a) Duties in Chapter 11 Cases.--Subchapter I of chapter 11 
     of title 11, United States Code, as amended by section 321, 
     is amended by adding at the end the following:

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

       ``In a small business case, a trustee or the debtor in 
     possession, in addition to the duties provided in this title 
     and as otherwise required by law, shall--
       ``(1) append to the voluntary petition or, in an 
     involuntary case, file not later than 7 days after the date 
     of the order for relief--
       ``(A) its most recent balance sheet, statement of 
     operations, cash-flow statement, Federal income tax return; 
     or
       ``(B) a statement made under penalty of perjury that no 
     balance sheet, statement of operations, or cash-flow 
     statement has been prepared and no Federal tax return has 
     been filed;
       ``(2) attend, through its senior management personnel and 
     counsel, meetings scheduled by the court or the United States 
     trustee, including initial debtor interviews, scheduling 
     conferences, and meetings of creditors convened under section 
     341 unless the court, after notice and a hearing, waives that 
     requirement upon a finding of extraordinary and compelling 
     circumstances;
       ``(3) timely file all schedules and statements of financial 
     affairs, unless the court, after notice and a hearing, grants 
     an extension, which shall not extend such time period to a 
     date later than 30 days after the date of the order for 
     relief, absent extraordinary and compelling circumstances;
       ``(4) file all postpetition financial and other reports 
     required by the Federal Rules of Bankruptcy Procedure or by 
     local rule of the district court;
       ``(5) subject to section 363(c)(2), maintain insurance 
     customary and appropriate to the industry;
       ``(6)(A) timely file tax returns and other required 
     government filings; and
       ``(B) subject to section 363(c)(2), timely pay all taxes 
     entitled to administrative expense priority except those 
     being contested by appropriate proceedings being diligently 
     prosecuted; and
       ``(7) allow the United States trustee, or a designated 
     representative of the United States trustee, to inspect the 
     debtor's business premises, books, and records at reasonable 
     times, after reasonable prior written notice, unless notice 
     is waived by the debtor.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     11 of title 11, United States Code, as amended by section 
     321, is amended by inserting after the item relating to 
     section 1115 the following:

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

     SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

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

     SEC. 438. PLAN CONFIRMATION DEADLINE.

       Section 1129 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) In a small business case, the court shall confirm a 
     plan that complies with the applicable provisions of this 
     title and that is filed in accordance with section 1121(e) 
     not later than 45 days after the plan is filed unless the 
     time for confirmation is extended in accordance with section 
     1121(e)(3).''.

     SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.

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

     SEC. 440. SCHEDULING CONFERENCES.

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

     SEC. 441. SERIAL FILER PROVISIONS.

       Section 362 of title 11, United States Code, as amended by 
     sections 106, 305, and 311, is amended--
       (1) in subsection (k), as so redesignated by section 305--
       (A) by striking ``An'' and inserting ``(1) Except as 
     provided in paragraph (2), an''; and
       (B) by adding at the end the following:
       ``(2) If such violation is based on an action taken by an 
     entity in the good faith belief that subsection (h) applies 
     to the debtor, the recovery under paragraph (1) of this 
     subsection against such entity shall be limited to actual 
     damages.''; and
       (2) by adding at the end the following:
       ``(n)(1) Except as provided in paragraph (2), subsection 
     (a) does not apply in a case in which the debtor--
       ``(A) is a debtor in a small business case pending at the 
     time the petition is filed;
       ``(B) was a debtor in a small business case that was 
     dismissed for any reason by an order that became final in the 
     2-year period ending on the date of the order for relief 
     entered with respect to the petition;
       ``(C) was a debtor in a small business case in which a plan 
     was confirmed in the 2-year period ending on the date of the 
     order for relief entered with respect to the petition; or
       ``(D) is an entity that has acquired substantially all of 
     the assets or business of a small business debtor described 
     in subparagraph (A), (B), or (C), unless such entity 
     establishes by a preponderance of the evidence that such 
     entity acquired substantially all of the assets or business 
     of such small business debtor in good faith and not for the 
     purpose of evading this paragraph.
       ``(2) Paragraph (1) does not apply--
       ``(A) to an involuntary case involving no collusion by the 
     debtor with creditors; or
       ``(B) to the filing of a petition if--
       ``(i) the debtor proves by a preponderance of the evidence 
     that the filing of the petition resulted from circumstances 
     beyond the control of the debtor not foreseeable at the time 
     the case then pending was filed; and

[[Page 584]]

       ``(ii) it is more likely than not that the court will 
     confirm a feasible plan, but not a liquidating plan, within a 
     reasonable period of time.''.

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

       (a) Expanded Grounds for Dismissal or Conversion.--Section 
     1112 of title 11, United States Code, is amended by striking 
     subsection (b) and inserting the following:
       ``(b)(1) Except as provided in paragraph (2) of this 
     subsection, subsection (c) of this section, and section 
     1104(a)(3), on request of a party in interest, and after 
     notice and a hearing, absent unusual circumstances 
     specifically identified by the court that establish that the 
     requested conversion or dismissal is not in the best 
     interests of creditors and the estate, the court shall 
     convert a case under this chapter to a case under chapter 7 
     or dismiss a case under this chapter, whichever is in the 
     best interests of creditors and the estate, if the movant 
     establishes cause.
       ``(2) The relief provided in paragraph (1) shall not be 
     granted absent unusual circumstances specifically identified 
     by the court that establish that such relief is not in the 
     best interests of creditors and the estate, if the debtor or 
     another party in interest objects and establishes that--
       ``(A) there is a reasonable likelihood that a plan will be 
     confirmed within the timeframes established in sections 
     1121(e) and 1129(e) of this title, or if such sections do not 
     apply, within a reasonable period of time; and
       ``(B) the grounds for granting such relief include an act 
     or omission of the debtor other than under paragraph (4)(A)--
       ``(i) for which there exists a reasonable justification for 
     the act or omission; and
       ``(ii) that will be cured within a reasonable period of 
     time fixed by the court.
       ``(3) The court shall commence the hearing on a motion 
     under this subsection not later than 30 days after filing of 
     the motion, and shall decide the motion not later than 15 
     days after commencement of such hearing, unless the movant 
     expressly consents to a continuance for a specific period of 
     time or compelling circumstances prevent the court from 
     meeting the time limits established by this paragraph.
       ``(4) For purposes of this subsection, the term `cause' 
     includes--
       ``(A) substantial or continuing loss to or diminution of 
     the estate and the absence of a reasonable likelihood of 
     rehabilitation;
       ``(B) gross mismanagement of the estate;
       ``(C) failure to maintain appropriate insurance that poses 
     a risk to the estate or to the public;
       ``(D) unauthorized use of cash collateral substantially 
     harmful to 1 or more creditors;
       ``(E) failure to comply with an order of the court;
       ``(F) unexcused failure to satisfy timely any filing or 
     reporting requirement established by this title or by any 
     rule applicable to a case under this chapter;
       ``(G) failure to attend the meeting of creditors convened 
     under section 341(a) or an examination ordered under rule 
     2004 of the Federal Rules of Bankruptcy Procedure without 
     good cause shown by the debtor;
       ``(H) failure timely to provide information or attend 
     meetings reasonably requested by the United States trustee 
     (or the bankruptcy administrator, if any);
       ``(I) failure timely to pay taxes owed after the date of 
     the order for relief or to file tax returns due after the 
     date of the order for relief;
       ``(J) failure to file a disclosure statement, or to file or 
     confirm a plan, within the time fixed by this title or by 
     order of the court;
       ``(K) failure to pay any fees or charges required under 
     chapter 123 of title 28;
       ``(L) revocation of an order of confirmation under section 
     1144;
       ``(M) inability to effectuate substantial consummation of a 
     confirmed plan;
       ``(N) material default by the debtor with respect to a 
     confirmed plan;
       ``(O) termination of a confirmed plan by reason of the 
     occurrence of a condition specified in the plan; and
       ``(P) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date of the 
     filing of the petition.
       ``(5) The court shall commence the hearing on a motion 
     under this subsection not later than 30 days after filing of 
     the motion, and shall decide the motion not later than 15 
     days after commencement of such hearing, unless the movant 
     expressly consents to a continuance for a specific period of 
     time or compelling circumstances prevent the court from 
     meeting the time limits established by this paragraph.''.
       (b) Additional Grounds for Appointment of Trustee.--Section 
     1104(a) of title 11, United States Code, is amended--
       (1) in paragraph (1), by striking ``or'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(3) if grounds exist to convert or dismiss the case under 
     section 1112, but the court determines that the appointment 
     of a trustee or an examiner is in the best interests of 
     creditors and the estate.''.

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

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

     SEC. 444. PAYMENT OF INTEREST.

       Section 362(d)(3) of title 11, United States Code, is 
     amended--
       (1) by inserting ``or 30 days after the court determines 
     that the debtor is subject to this paragraph, whichever is 
     later'' after ``90-day period)''; and
       (2) by striking subparagraph (B) and inserting the 
     following:
       ``(B) the debtor has commenced monthly payments that--
       ``(i) may, in the debtor's sole discretion, notwithstanding 
     section 363(c)(2), be made from rents or other income 
     generated before 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 a penalty provision, for the period of 2 years 
     following the later of the rejection date or the date of 
     actual turnover of the premises, without reduction or setoff 
     for any reason whatsoever except for sums actually received 
     or to be received from an entity other than the debtor, and 
     the claim for remaining sums due for the balance of the term 
     of the lease shall be a claim under section 502(b)(6);''.

     SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A PLAN 
                   ADMINISTRATOR OF AN EMPLOYEE BENEFIT PLAN.

       (a) In General.--Section 521(a) of title 11, United States 
     Code, as amended by sections 106 and 304, is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding after paragraph (6) the following:
       ``(7) unless a trustee is serving in the case, continue to 
     perform the obligations required of the administrator (as 
     defined in section 3 of the Employee Retirement Income 
     Security Act of 1974) of an employee benefit plan if at the 
     time of the commencement of the case the debtor (or any 
     entity designated by the debtor) served as such 
     administrator.''.
       (b) Duties of Trustees.--Section 704(a) of title 11, United 
     States Code, as amended by sections 102 and 219, is amended--
       (1) in paragraph (10), by striking ``and'' at the end; and
       (2) by adding at the end the following:
       ``(11) if, at the time of the commencement of the case, the 
     debtor (or any entity designated by the debtor) served as the 
     administrator (as defined in section 3 of the Employee 
     Retirement Income Security Act of 1974) of an employee 
     benefit plan, continue to perform the obligations required of 
     the administrator; and''.
       (c) Conforming Amendment.--Section 1106(a)(1) of title 11, 
     United States Code, is amended to read as follows:
       ``(1) perform the duties of the trustee, as specified in 
     paragraphs (2), (5), (7), (8), (9), (10), and (11) of section 
     704;''.

     SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EMPLOYEES.

       Section 1114(d) of title 11, United States Code, is 
     amended--
       (1) by striking ``appoint'' and inserting ``order the 
     appointment of'', and
       (2) by adding at the end the following: ``The United States 
     trustee shall appoint any such committee.''.

[[Page 585]]



                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

     SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

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

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

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

                       TITLE VI--BANKRUPTCY DATA

     SEC. 601. IMPROVED BANKRUPTCY STATISTICS.

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

     ``Sec. 159. Bankruptcy statistics

       ``(a) The clerk of the district court, or the clerk of the 
     bankruptcy court if one is certified pursuant to section 
     156(b) of this title, shall collect statistics regarding 
     debtors who are individuals with primarily consumer debts 
     seeking relief under chapters 7, 11, and 13 of title 11. 
     Those statistics shall be in a standardized format prescribed 
     by the Director of the Administrative Office of the United 
     States Courts (referred to in this section as the 
     `Director').
       ``(b) The Director shall--
       ``(1) compile the statistics referred to in subsection (a);
       ``(2) make the statistics available to the public; and
       ``(3) not later than July 1, 2006, and annually thereafter, 
     prepare, and submit to Congress a report concerning the 
     information collected under subsection (a) that contains an 
     analysis of the information.
       ``(c) The compilation required under subsection (b) shall--
       ``(1) be itemized, by chapter, with respect to title 11;
       ``(2) be presented in the aggregate and for each district; 
     and
       ``(3) include information concerning--
       ``(A) the total assets and total liabilities of the debtors 
     described in subsection (a), and in each category of assets 
     and liabilities, as reported in the schedules prescribed 
     pursuant to section 2075 of this title and filed by debtors;
       ``(B) the current monthly income, average income, and 
     average expenses of debtors as reported on the schedules and 
     statements that each such debtor files under sections 521 and 
     1322 of title 11;
       ``(C) the aggregate amount of debt discharged in cases 
     filed during the reporting period, determined as the 
     difference between the total amount of debt and obligations 
     of a debtor reported on the schedules and the amount of such 
     debt reported in categories which are predominantly 
     nondischargeable;
       ``(D) the average period of time between the date of the 
     filing of the petition and the closing of the case for cases 
     closed during the reporting period;
       ``(E) for cases closed during the reporting period--
       ``(i) the number of cases in which a reaffirmation 
     agreement was filed; and
       ``(ii)(I) the total number of reaffirmation agreements 
     filed;
       ``(II) of those cases in which a reaffirmation agreement 
     was filed, the number of cases in which the debtor was not 
     represented by an attorney; and
       ``(III) of those cases in which a reaffirmation agreement 
     was filed, the number of cases in which the reaffirmation 
     agreement was approved by the court;
       ``(F) with respect to cases filed under chapter 13 of title 
     11, for the reporting 
     period--
       ``(i)(I) the number of cases in which a final order was 
     entered determining the value of property securing a claim in 
     an amount less than the amount of the claim; and
       ``(II) the number of final orders entered determining the 
     value of property securing a claim;
       ``(ii) the number of cases dismissed, the number of cases 
     dismissed for failure to make payments under the plan, the 
     number of cases refiled after dismissal, and the number of 
     cases in which the plan was completed, separately itemized 
     with respect to the number of modifications made before 
     completion of the plan, if any; and
       ``(iii) the number of cases in which the debtor filed 
     another case during the 6-year period preceding the filing;
       ``(G) the number of cases in which creditors were fined for 
     misconduct and any amount of punitive damages awarded by the 
     court for creditor misconduct; and
       ``(H) the number of cases in which sanctions under rule 
     9011 of the Federal Rules of Bankruptcy Procedure were 
     imposed against debtor's attorney or damages awarded under 
     such Rule.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     6 of title 28, United States Code, is amended by adding at 
     the end the following:

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

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

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

     ``Sec. 589b. Bankruptcy data

       ``(a) Rules.--The Attorney General shall, within a 
     reasonable time after the effective date of this section, 
     issue rules requiring uniform forms for (and from time to 
     time thereafter to appropriately modify and approve)--
       ``(1) final reports by trustees in cases under chapters 7, 
     12, and 13 of title 11; and
       ``(2) periodic reports by debtors in possession or trustees 
     in cases under chapter 11 of title 11.
       ``(b) Reports.--Each report referred to in subsection (a) 
     shall be designed (and the requirements as to place and 
     manner of filing shall be established) so as to facilitate 
     compilation of data and maximum possible access of the 
     public, both by physical inspection at one or more central 
     filing locations, and by electronic access through the 
     Internet or other appropriate media.
       ``(c) Required Information.--The information required to be 
     filed in the reports referred to in subsection (b) shall be 
     that which is in the best interests of debtors and creditors, 
     and in the public interest in reasonable and adequate 
     information to evaluate the efficiency and practicality of 
     the Federal bankruptcy system. In issuing rules proposing the 
     forms referred to in subsection (a), the Attorney General 
     shall strike the best achievable practical balance between--
       ``(1) the reasonable needs of the public for information 
     about the operational results of the Federal bankruptcy 
     system;
       ``(2) economy, simplicity, and lack of undue burden on 
     persons with a duty to file reports; and
       ``(3) appropriate privacy concerns and safeguards.
       ``(d) Final Reports.--The uniform forms for final reports 
     required under subsection (a) for use by trustees under 
     chapters 7, 12, and 13 of title 11 shall, in addition to such 
     other matters as are required by law or as the Attorney 
     General in the discretion of the Attorney General shall 
     propose, include with respect to a case under such title--
       ``(1) information about the length of time the case was 
     pending;
       ``(2) assets abandoned;
       ``(3) assets exempted;
       ``(4) receipts and disbursements of the estate;
       ``(5) expenses of administration, including for use under 
     section 707(b), actual costs of administering cases under 
     chapter 13 of title 11;
       ``(6) claims asserted;
       ``(7) claims allowed; and
       ``(8) distributions to claimants and claims discharged 
     without payment,
     in each case by appropriate category and, in cases under 
     chapters 12 and 13 of title 11, date of confirmation of the 
     plan, each modification thereto, and defaults by the debtor 
     in performance under the plan.
       ``(e) Periodic Reports.--The uniform forms for periodic 
     reports required under subsection (a) for use by trustees or 
     debtors in possession under chapter 11 of title 11 shall, in 
     addition to such other matters as are required by law or as 
     the Attorney General in the discretion of the Attorney 
     General shall propose, include--
       ``(1) information about the industry classification, 
     published by the Department of Commerce, for the businesses 
     conducted by the debtor;
       ``(2) length of time the case has been pending;
       ``(3) number of full-time employees as of the date of the 
     order for relief and at the end of each reporting period 
     since the case was filed;
       ``(4) cash receipts, cash disbursements and profitability 
     of the debtor for the most recent period and cumulatively 
     since the date of the order for relief;
       ``(5) compliance with title 11, whether or not tax returns 
     and tax payments since the date of the order for relief have 
     been timely filed and made;
       ``(6) all professional fees approved by the court in the 
     case for the most recent period and cumulatively since the 
     date of the order for relief (separately reported, for the 
     professional fees incurred by or on behalf of the debtor, 
     between those that would have been incurred absent a 
     bankruptcy case and those not); and
       ``(7) plans of reorganization filed and confirmed and, with 
     respect thereto, by class, the recoveries of the holders, 
     expressed in aggregate dollar values and, in the case of 
     claims, as a percentage of total claims of the class 
     allowed.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     39 of title 28, United States Code, is amended by adding at 
     the end the following:

``589b. Bankruptcy data.''.

[[Page 586]]



     SEC. 603. AUDIT PROCEDURES.

       (a) In General.--
       (1) Establishment of procedures.--The Attorney General (in 
     judicial districts served by United States trustees) and the 
     Judicial Conference of the United States (in judicial 
     districts served by bankruptcy administrators) shall 
     establish procedures to determine the accuracy, veracity, and 
     completeness of petitions, schedules, and other information 
     that the debtor is required to provide under sections 521 and 
     1322 of title 11, United States Code, and, if applicable, 
     section 111 of such title, in cases filed under chapter 7 or 
     13 of such title in which the debtor is an individual. Such 
     audits shall be in accordance with generally accepted 
     auditing standards and performed by independent certified 
     public accountants or independent licensed public 
     accountants, provided that the Attorney General and the 
     Judicial Conference, as appropriate, may develop alternative 
     auditing standards not later than 2 years after the date of 
     enactment of this Act.
       (2) Procedures.--Those procedures required by paragraph (1) 
     shall--
       (A) establish a method of selecting appropriate qualified 
     persons to contract to perform those audits;
       (B) establish a method of randomly selecting cases to be 
     audited, except that not less than 1 out of every 250 cases 
     in each Federal judicial district shall be selected for 
     audit;
       (C) require audits of schedules of income and expenses that 
     reflect greater than average variances from the statistical 
     norm of the district in which the schedules were filed if 
     those variances occur by reason of higher income or higher 
     expenses than the statistical norm of the district in which 
     the schedules were filed; and
       (D) establish procedures for providing, not less frequently 
     than annually, public information concerning the aggregate 
     results of such audits including the percentage of cases, by 
     district, in which a material misstatement of income or 
     expenditures is reported.
       (b) Amendments.--Section 586 of title 28, United States 
     Code, is amended--
       (1) in subsection (a), by striking paragraph (6) and 
     inserting the following:
       ``(6) make such reports as the Attorney General directs, 
     including the results of audits performed under section 
     603(a) of the Bankruptcy Abuse Prevention and Consumer 
     Protection Act of 2003;''; 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 
     2003.
       ``(2)(A) The report of each audit referred to in paragraph 
     (1) shall be filed with the court and transmitted to the 
     United States trustee. Each report shall clearly and 
     conspicuously specify any material misstatement of income or 
     expenditures or of assets identified by the person performing 
     the audit. In any case in which a material misstatement of 
     income or expenditures or of assets has been reported, the 
     clerk of the district court (or the clerk of the bankruptcy 
     court if one is certified under section 156(b) of this title) 
     shall give notice of the misstatement to the creditors in the 
     case.
       ``(B) If a material misstatement of income or expenditures 
     or of assets is reported, the United States trustee shall--
       ``(i) report the material misstatement, if appropriate, to 
     the United States Attorney pursuant to section 3057 of title 
     18; and
       ``(ii) if advisable, take appropriate action, including but 
     not limited to commencing an adversary proceeding to revoke 
     the debtor's discharge pursuant to section 727(d) of title 
     11.''.
       (c) Amendments to Section 521 of Title 11, U.S.C.--Section 
     521(a) of title 11, United States Code, as so designated by 
     section 106, is amended in each of paragraphs (3) and (4) by 
     inserting ``or an auditor serving under section 586(f) of 
     title 28'' after ``serving in the case''.
       (d) Amendments to Section 727 of Title 11, U.S.C.--Section 
     727(d) of title 11, United States Code, is amended--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(4) the debtor has failed to explain satisfactorily--
       ``(A) a material misstatement in an audit referred to in 
     section 586(f) of title 28; or
       ``(B) a failure to make available for inspection all 
     necessary accounts, papers, documents, financial records, 
     files, and all other papers, things, or property belonging to 
     the debtor that are requested for an audit referred to in 
     section 586(f) of title 28.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect 18 months after the date of enactment of 
     this Act.

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

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

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

     SEC. 701. TREATMENT OF CERTAIN LIENS.

       (a) Treatment of Certain Liens.--Section 724 of title 11, 
     United States Code, is amended--
       (1) in subsection (b), in the matter preceding paragraph 
     (1), by inserting ``(other than to the extent that there is a 
     properly perfected unavoidable tax lien arising in connection 
     with an ad valorem tax on real or personal property of the 
     estate)'' after ``under this title'';
       (2) in subsection (b)(2), by inserting ``(except that such 
     expenses, other than claims for wages, salaries, or 
     commissions that arise after the date of the filing of the 
     petition, shall be limited to expenses incurred under chapter 
     7 of this title and shall not include expenses incurred under 
     chapter 11 of this title)'' after ``507(a)(1)''; and
       (3) by adding at the end the following:
       ``(e) Before subordinating a tax lien on real or personal 
     property of the estate, the trustee shall--
       ``(1) exhaust the unencumbered assets of the estate; and
       ``(2) in a manner consistent with section 506(c), recover 
     from property securing an allowed secured claim the 
     reasonable, necessary costs and expenses of preserving or 
     disposing of such property.
       ``(f) Notwithstanding the exclusion of ad valorem tax liens 
     under this section and subject to the requirements of 
     subsection (e), the following may be paid from property of 
     the estate which secures a tax lien, or the proceeds of such 
     property:
       ``(1) Claims for wages, salaries, and commissions that are 
     entitled to priority under section 507(a)(4).
       ``(2) Claims for contributions to an employee benefit plan 
     entitled to priority under section 507(a)(5).''.
       (b) Determination of Tax Liability.--Section 505(a)(2) of 
     title 11, United States Code, is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the amount or legality of any amount arising in 
     connection with an ad valorem tax on real or personal 
     property of the estate, if the applicable period for 
     contesting or redetermining that amount under any law (other 
     than a bankruptcy law) has expired.''.

     SEC. 702. TREATMENT OF FUEL TAX CLAIMS.

       Section 501 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(e) A claim arising from the liability of a debtor for 
     fuel use tax assessed consistent with the requirements of 
     section 31705 of title 49 may be filed by the base 
     jurisdiction designated pursuant to the International Fuel 
     Tax Agreement (as defined in section 31701 of title 49) and, 
     if so filed, shall be allowed as a single claim.''.

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

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

[[Page 587]]



     SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

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

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

       ``(a) If any provision of this title requires the payment 
     of interest on a tax claim or on an administrative expense 
     tax, or the payment of interest to enable a creditor to 
     receive the present value of the allowed amount of a tax 
     claim, the rate of interest shall be the rate determined 
     under applicable nonbankruptcy law.
       ``(b) In the case of taxes paid under a confirmed plan 
     under this title, the rate of interest shall be determined as 
     of the calendar month in which the plan is confirmed.''.
       (b) Clerical Amendment.--The table of sections for 
     subchapter I of chapter 5 of title 11, United States Code, is 
     amended by adding at the end the following:

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

     SEC. 705. PRIORITY OF TAX CLAIMS.

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

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

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

     SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

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

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

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

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

       Section 1141(d) of title 11, United States Code, as amended 
     by sections 321 and 330, is amended by adding at the end the 
     following:
       ``(6) Notwithstanding paragraph (1), the confirmation of a 
     plan does not discharge a debtor that is a corporation from 
     any debt--
       ``(A) of a kind specified in paragraph (2)(A) or (2)(B) of 
     section 523(a) that is owed to a domestic governmental unit, 
     or owed to a person as the result of an action filed under 
     subchapter III of chapter 37 of title 31 or any similar State 
     statute; or
       ``(B) for a tax or customs duty with respect to which the 
     debtor--
       ``(i) made a fraudulent return; or
       ``(ii) willfully attempted in any manner to evade or to 
     defeat such tax or such customs duty.''.

     SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO PREPETITION 
                   TAXES.

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

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

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

     SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

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

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

       (a) Payment of Taxes Required.--Section 960 of title 28, 
     United States Code, is amended--
       (1) by inserting ``(a)'' before ``Any''; and
       (2) by adding at the end the following:
       ``(b) A tax under subsection (a) shall be paid on or before 
     the due date of the tax under applicable nonbankruptcy law, 
     unless--
       ``(1) the tax is a property tax secured by a lien against 
     property that is abandoned under section 554 of title 11, 
     within a reasonable period of time after the lien attaches, 
     by the trustee in a case under title 11; or
       ``(2) payment of the tax is excused under a specific 
     provision of title 11.
       ``(c) In a case pending under chapter 7 of title 11, 
     payment of a tax may be deferred until final distribution is 
     made under section 726 of title 11, if--
       ``(1) the tax was not incurred by a trustee duly appointed 
     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 sections 215 and 224, is amended--
       (1) in paragraph (1)(B)--
       (A) in the matter preceding clause (i), by inserting ``or 
     equivalent report or notice,'' after ``a return,'';
       (B) in clause (i), by inserting ``or given'' after 
     ``filed''; and
       (C) in clause (ii)--
       (i) by inserting ``or given'' after ``filed''; and
       (ii) by inserting ``, report, or notice'' after ``return''; 
     and
       (2) by adding at the end the following:
     ``For purposes of this subsection, the term `return' means a 
     return that satisfies the requirements of applicable 
     nonbankruptcy law (including applicable filing requirements). 
     Such term includes a return prepared pursuant to section 
     6020(a) of the Internal Revenue Code of 1986, or similar 
     State or local law, or a written stipulation to a judgment or 
     a final order entered by a nonbankruptcy tribunal, but does 
     not include a return made pursuant to section 6020(b) of the 
     Internal Revenue Code of 1986, or a similar State or local 
     law.''.

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

       Section 505(b)(2) of title 11, United States Code, as 
     amended by section 703, is amended by inserting ``the 
     estate,'' after ``misrepresentation,''.

[[Page 588]]



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

       (a) Filing of Prepetition Tax Returns Required for Plan 
     Confirmation.--Section 1325(a) of title 11, United States 
     Code, as amended by sections 102, 213, and 306, is amended by 
     inserting after paragraph (8) the following:
       ``(9) the debtor has filed all applicable Federal, State, 
     and local tax returns as required by section 1308.''.
       (b) Additional Time Permitted for Filing Tax Returns.--
       (1) In general.--Subchapter I of chapter 13 of title 11, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 1308. Filing of prepetition tax returns

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

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

     SEC. 717. STANDARDS FOR TAX DISCLOSURE.

       Section 1125(a)(1) of title 11, United States Code, is 
     amended--
       (1) by inserting ``including a discussion of the potential 
     material Federal tax consequences of the plan to the debtor, 
     any successor to the debtor, and a hypothetical investor 
     typical of the holders of claims or interests in the case,'' 
     after ``records,''; and
       (2) by striking ``a hypothetical reasonable investor 
     typical of holders of claims or interests'' and inserting 
     ``such a hypothetical investor''.

     SEC. 718. SETOFF OF TAX REFUNDS.

       Section 362(b) of title 11, United States Code, as amended 
     by sections 224, 303, 311, and 401, is amended by inserting 
     after paragraph (25) the following:
       ``(26) under subsection (a), of the setoff under applicable 
     nonbankruptcy law of an income tax refund, by a governmental 
     unit, with respect to a taxable period that ended before the 
     date of the order for relief against an income tax liability 
     for a taxable period that also ended before the date of the 
     order for relief, except that in any case in which the setoff 
     of an income tax refund is not permitted under applicable 
     nonbankruptcy law because of a pending action to determine 
     the amount or legality of a tax liability, the governmental 
     unit may hold the refund pending the resolution of the 
     action, unless the court, on the motion of the trustee and 
     after notice and a hearing, grants the taxing authority 
     adequate protection (within the meaning of section 361) for 
     the secured claim of such authority in the setoff under 
     section 506(a);''.

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

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

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

       ``(a) Whenever the Internal Revenue Code of 1986 provides 
     that a separate taxable estate or entity is created in a case 
     concerning a debtor under this title, and the income, gain, 
     loss, deductions, and credits of such estate shall be taxed 
     to or claimed by the estate, a separate taxable estate is 
     also created for purposes of any State and local law imposing 
     a tax on or measured by income and such income, gain, loss, 
     deductions, and credits shall be taxed to or claimed by the 
     estate and may not be taxed to or claimed by the debtor. The 
     preceding sentence shall not apply if the case is dismissed. 
     The trustee shall make tax returns of income required under 
     any such State or local law.
       ``(b) Whenever the Internal Revenue Code of 1986 provides 
     that no separate taxable estate shall be created in a case 
     concerning a debtor under this title, and the income, gain, 
     loss, deductions, and credits of an estate shall be taxed to 
     or claimed by the debtor, such income, gain, loss, 
     deductions, and credits shall be taxed to or claimed by the 
     debtor under a State or local law imposing a tax on or 
     measured by income and may not be taxed to or claimed by the 
     estate. The trustee shall make such tax returns of income of 
     corporations and of partnerships as are required under any 
     State or local law, but with respect to partnerships, shall 
     make such returns only to the extent such returns are also 
     required to be made under such Code. The estate shall be 
     liable for any tax imposed on such corporation or 
     partnership, but not for any tax imposed on partners or 
     members.
       ``(c) With respect to a partnership or any entity treated 
     as a partnership under a State or local law imposing a tax on 
     or measured by income that is a debtor in a case under this 
     title, any gain or loss resulting from a distribution of 
     property from such partnership, or any distributive share of 
     any income, gain, loss, deduction, or credit of a partner or 
     member that is distributed, or considered distributed, from 
     such partnership, after the commencement of the case, is 
     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

[[Page 589]]

     generally applicable to the same types of entities under such 
     State or local law.
       ``(h) The trustee shall withhold from any payment of claims 
     for wages, salaries, commissions, dividends, interest, or 
     other payments, or collect, any amount required to be 
     withheld or collected under applicable State or local tax 
     law, and shall pay such withheld or collected amount to the 
     appropriate governmental unit at the time and in the manner 
     required by such tax law, and with the same priority as the 
     claim from which such amount was withheld or collected was 
     paid.
       ``(i)(1) To the extent that any State or local law imposing 
     a tax on or measured by income provides for the carryover of 
     any tax attribute from one taxable period to a subsequent 
     taxable period, the estate shall succeed to such tax 
     attribute in any case in which such estate is subject to tax 
     under subsection (a).
       ``(2) After such a case is closed or dismissed, the debtor 
     shall succeed to any tax attribute to which the estate 
     succeeded under paragraph (1) to the extent consistent with 
     the Internal Revenue Code of 1986.
       ``(3) The estate may carry back any loss or tax attribute 
     to a taxable period of the debtor that ended before the date 
     of the order for relief under this title to the extent that--
       ``(A) applicable State or local tax law provides for a 
     carryback in the case of the debtor; and
       ``(B) the same or a similar tax attribute may be carried 
     back by the estate to such a taxable period of the debtor 
     under the Internal Revenue Code of 1986.
       ``(j)(1) For purposes of any State or local law imposing a 
     tax on or measured by income, income is not realized by the 
     estate, the debtor, or a successor to the debtor by reason of 
     discharge of indebtedness in a case under this title, except 
     to the extent, if any, that such income is subject to tax 
     under the Internal Revenue Code of 1986.
       ``(2) Whenever the Internal Revenue Code of 1986 provides 
     that the amount excluded from gross income in respect of the 
     discharge of indebtedness in a case under this title shall be 
     applied to reduce the tax attributes of the debtor or the 
     estate, a similar reduction shall be made under any State or 
     local law imposing a tax on or measured by income to the 
     extent such State or local law recognizes such attributes. 
     Such State or local law may also provide for the reduction of 
     other attributes to the extent that the full amount of income 
     from the discharge of indebtedness has not been applied.
       ``(k)(1) Except as provided in this section and section 
     505, the time and manner of filing tax returns and the items 
     of income, gain, loss, deduction, and credit of any taxpayer 
     shall be determined under applicable nonbankruptcy law.
       ``(2) For Federal tax purposes, the provisions of this 
     section are subject to the Internal Revenue Code of 1986 and 
     other applicable Federal nonbankruptcy law.''.
       (2) Clerical Amendment.--The table of sections for chapter 
     3 of title 11, United States Code, is amended by striking the 
     item relating to section 346 and inserting the following:

``346. Special provisions related to the treatment of State and local 
              taxes.''.
       (b) Conforming Amendments.--Title 11 of the United States 
     Code is amended--
       (1) by striking section 728;
       (2) in the table of sections for chapter 7 by striking the 
     item relating to section 728;
       (3) in section 1146--
       (A) by striking subsections (a) and (b); and
       (B) by redesignating subsections (c) and (d) as subsections 
     (a) and (b), respectively; and
       (4) in section 1231--
       (A) by striking subsections (a) and (b); and
       (B) by redesignating subsections (c) and (d) as subsections 
     (a) and (b), respectively.

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

       Section 521 of title 11, United States Code, as amended by 
     sections 106, 225, 305, 315, and 316, is amended by adding at 
     the end the following:
       ``(j)(1) Notwithstanding any other provision of this title, 
     if the debtor fails to file a tax return that becomes due 
     after the commencement of the case or to properly obtain an 
     extension of the due date for filing such return, the taxing 
     authority may request that the court enter an order 
     converting or dismissing the case.
       ``(2) If the debtor does not file the required return or 
     obtain the extension referred to in paragraph (1) within 90 
     days after a request is filed by the taxing authority under 
     that paragraph, the court shall convert or dismiss the case, 
     whichever is in the best interests of creditors and the 
     estate.''.

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

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

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

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

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

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

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

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

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

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

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

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

     ``Sec. 1501. Purpose and scope of application

       ``(a) The purpose of this chapter is to incorporate the 
     Model Law on Cross-Border Insolvency so as to provide 
     effective mechanisms for dealing with cases of cross-border 
     insolvency with the objectives of--
       ``(1) cooperation between--
       ``(A) courts of the United States, United States trustees, 
     trustees, examiners, debtors, and debtors in possession; and
       ``(B) the courts and other competent authorities of foreign 
     countries involved in cross-border insolvency cases;
       ``(2) greater legal certainty for trade and investment;
       ``(3) fair and efficient administration of cross-border 
     insolvencies that protects the interests of all creditors, 
     and other interested entities, including the debtor;
       ``(4) protection and maximization of the value of the 
     debtor's assets; and
       ``(5) facilitation of the rescue of financially troubled 
     businesses, thereby protecting investment and preserving 
     employment.
       ``(b) This chapter applies where--
       ``(1) assistance is sought in the United States by a 
     foreign court or a foreign representative in connection with 
     a foreign proceeding;
       ``(2) assistance is sought in a foreign country in 
     connection with a case under this title;
       ``(3) a foreign proceeding and a case under this title with 
     respect to the same debtor are pending concurrently; or
       ``(4) creditors or other interested persons in a foreign 
     country have an interest in requesting the commencement of, 
     or participating in, a case or proceeding under this title.
       ``(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.

[[Page 590]]



                   ``SUBCHAPTER I--GENERAL PROVISIONS

     ``Sec. 1502. Definitions

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

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

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

     ``Sec. 1504. Commencement of ancillary case

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

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

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

     ``Sec. 1506. Public policy exception

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

     ``Sec. 1507. Additional assistance

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

     ``Sec. 1508. Interpretation

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

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

     ``Sec. 1509. Right of direct access

       ``(a) A foreign representative may commence a case under 
     section 1504 by filing directly with the court a petition for 
     recognition of a foreign proceeding under section 1515.
       ``(b) If the court grants recognition under section 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.
       ``(e) Whether or not the court grants recognition, and 
     subject to sections 306 and 1510, a foreign representative is 
     subject to applicable nonbankruptcy law.
       ``(f) Notwithstanding any other provision of this section, 
     the failure of a foreign representative to commence a case or 
     to obtain recognition under this chapter does not affect any 
     right the foreign representative may have to sue in a court 
     in the United States to collect or recover a claim which is 
     the property of the debtor.

     ``Sec. 1510. Limited jurisdiction

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

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

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

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

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

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

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

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

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

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

     ``Sec. 1515. Application for recognition

       ``(a) A foreign representative applies to the court for 
     recognition of a foreign proceeding in which the foreign 
     representative has been appointed by filing a petition for 
     recognition.
       ``(b) A petition for recognition shall be accompanied by--

[[Page 591]]

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

     ``Sec. 1516. Presumptions concerning recognition

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

     ``Sec. 1517. Order granting recognition

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

     ``Sec. 1518. Subsequent information

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

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

       ``(a) From the time of filing a petition for recognition 
     until the court rules on the petition, the court may, at the 
     request of the foreign representative, where relief is 
     urgently needed to protect the assets of the debtor or the 
     interests of the creditors, grant relief of a provisional 
     nature, including--
       ``(1) staying execution against the debtor's assets;
       ``(2) entrusting the administration or realization of all 
     or part of the debtor's assets located in the United States 
     to the foreign representative or another person authorized by 
     the court, including an examiner, in order to protect and 
     preserve the value of assets that, by their nature or because 
     of other circumstances, are perishable, susceptible to 
     devaluation or otherwise in jeopardy; and
       ``(3) any relief referred to in paragraph (3), (4), or (7) 
     of section 1521(a).
       ``(b) Unless extended under section 1521(a)(6), the relief 
     granted under this section terminates when the petition for 
     recognition is granted.
       ``(c) It is a ground for denial of relief under this 
     section that such relief would interfere with the 
     administration of a foreign main proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under this section.
       ``(f) The exercise of rights not subject to the stay 
     arising under section 362(a) pursuant to paragraph (6), (7), 
     (17), or (27) of section 362(b) or pursuant to section 362(n) 
     shall not be stayed by any order of a court or administrative 
     agency in any proceeding under this chapter.

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

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

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

       ``(a) Upon recognition of a foreign proceeding, whether 
     main or nonmain, where necessary to effectuate the purpose of 
     this chapter and to protect the assets of the debtor or the 
     interests of the creditors, the court may, at the request of 
     the foreign representative, grant any appropriate relief, 
     including--
       ``(1) staying the commencement or continuation of an 
     individual action or proceeding concerning the debtor's 
     assets, rights, obligations or liabilities to the extent they 
     have not been stayed under section 1520(a);
       ``(2) staying execution against the debtor's assets to the 
     extent it has not been stayed under section 1520(a);
       ``(3) suspending the right to transfer, encumber or 
     otherwise dispose of any assets of the debtor to the extent 
     this right has not been suspended under section 1520(a);
       ``(4) providing for the examination of witnesses, the 
     taking of evidence or the delivery of information concerning 
     the debtor's assets, affairs, rights, obligations or 
     liabilities;
       ``(5) entrusting the administration or realization of all 
     or part of the debtor's assets within the territorial 
     jurisdiction of the United States to the foreign 
     representative or another person, including an examiner, 
     authorized by the court;
       ``(6) extending relief granted under section 1519(a); and
       ``(7) granting any additional relief that may be available 
     to a trustee, except for relief available under sections 522, 
     544, 545, 547, 548, 550, and 724(a).
       ``(b) Upon recognition of a foreign proceeding, whether 
     main or nonmain, the court may, at the request of the foreign 
     representative, entrust the distribution of all or part of 
     the debtor's assets located in the United States to the 
     foreign representative or another person, including an 
     examiner, authorized by the court, provided that the court is 
     satisfied that the interests of creditors in the United 
     States are sufficiently protected.
       ``(c) In granting relief under this section to a 
     representative of a foreign nonmain proceeding, the court 
     must be satisfied that the relief relates to assets that, 
     under the law of the United States, should be administered in 
     the foreign nonmain proceeding or concerns information 
     required in that proceeding.
       ``(d) The court may not enjoin a police or regulatory act 
     of a governmental unit, including a criminal action or 
     proceeding, under this section.
       ``(e) The standards, procedures, and limitations applicable 
     to an injunction shall apply to relief under paragraphs (1), 
     (2), (3), and (6) of subsection (a).
       ``(f) The exercise of rights not subject to the stay 
     arising under section 362(a) pursuant to paragraph (6), (7), 
     (17), or (27) of section 362(b) or pursuant to section 362(n) 
     shall not be stayed by any order of a court or administrative 
     agency in any proceeding under this chapter.

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

       ``(a) The court may grant relief under section 1519 or 
     1521, or may modify or terminate relief under subsection (c), 
     only if the interests of the creditors and other interested 
     entities, including the debtor, are sufficiently protected.
       ``(b) The court may subject relief granted under section 
     1519 or 1521, or the operation of the debtor's business under 
     section 1520(a)(3), to conditions it considers appropriate, 
     including the giving of security or the filing of a bond.
       ``(c) The court may, at the request of the foreign 
     representative or an entity affected by relief granted under 
     section 1519 or 1521,

[[Page 592]]

     or at its own motion, modify or terminate such relief.
       ``(d) Section 1104(d) shall apply to the appointment of an 
     examiner under this chapter. Any examiner shall comply with 
     the qualification requirements imposed on a trustee by 
     section 322.

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

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

     ``Sec. 1524. Intervention by a foreign representative

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

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

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

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

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

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

     ``Sec. 1527. Forms of cooperation

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

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

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

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

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

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

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

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

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

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

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

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

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

[[Page 593]]



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

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

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

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

       (a) Definition of Qualified Financial Contract.--
       (1) FDIC-insured depository institutions.--Section 
     11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(8)(D)) is amended--
       (A) by striking ``subsection--'' and inserting 
     ``subsection, the following definitions shall apply:''; and
       (B) in clause (i), by inserting ``, resolution, or order'' 
     after ``any similar agreement that the Corporation determines 
     by regulation''.
       (2) Insured credit unions.--Section 207(c)(8)(D) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is 
     amended--
       (A) by striking ``subsection--'' and inserting 
     ``subsection, the following definitions shall apply:''; and
       (B) in clause (i), by inserting ``, resolution, or order'' 
     after ``any similar agreement that the Board determines by 
     regulation''.
       (b) Definition of Securities Contract.--
       (1) FDIC-insured depository institutions.--Section 
     11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(ii)) is amended to read as follows:
       ``(ii) Securities contract.--The term `securities 
     contract'--

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

       (2) Insured credit unions.--Section 207(c)(8)(D)(ii) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(ii)) is 
     amended to read as follows:
       ``(ii) Securities contract.--The term `securities 
     contract'--

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

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

       ``(I) with respect to a futures commission merchant, a 
     contract for the purchase or sale of a commodity for future 
     delivery on, or subject to the rules of, a contract market or 
     board of trade;
       ``(II) with respect to a foreign futures commission 
     merchant, a foreign future;
       ``(III) with respect to a leverage transaction merchant, a 
     leverage transaction;
       ``(IV) with respect to a clearing organization, a contract 
     for the purchase or sale of a commodity for future delivery 
     on, or subject to the rules of, a contract market or board of 
     trade that is cleared by such clearing organization, or 
     commodity option traded on, or subject to the rules of, a 
     contract market or board of trade that is cleared by such 
     clearing organization;

[[Page 594]]

       ``(V) with respect to a commodity options dealer, a 
     commodity option;
       ``(VI) any other agreement or transaction that is similar 
     to any agreement or transaction referred to in this clause;
       ``(VII) any combination of the agreements or transactions 
     referred to in this clause;
       ``(VIII) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), (IV), 
     (V), (VI), (VII), or (VIII), together with all supplements to 
     any such master agreement, without regard to whether the 
     master agreement provides for an agreement or transaction 
     that is not a commodity contract under this clause, except 
     that the master agreement shall be considered to be a 
     commodity contract under this clause only with respect to 
     each agreement or transaction under the master agreement that 
     is referred to in subclause (I), (II), (III), (IV), (V), 
     (VI), (VII), or (VIII); or
       ``(X) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this clause, including any guarantee or reimbursement 
     obligation in connection with any agreement or transaction 
     referred to in this clause.''.

       (2) Insured credit unions.--Section 207(c)(8)(D)(iii) of 
     the Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(iii)) 
     is amended to read as follows:
       ``(iii) Commodity contract.--The term `commodity contract' 
     means--

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

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

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

       (2) Insured credit unions.--Section 207(c)(8)(D)(iv) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(iv)) is 
     amended to read as follows:
       ``(iv) Forward contract.--The term `forward contract' 
     means--

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

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

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

     For purposes of this clause, the term `qualified foreign 
     government security' means a security that is a direct 
     obligation of, or that is fully guaranteed by, the central 
     government of a member of the Organization for

[[Page 595]]

     Economic Cooperation and Development (as determined by 
     regulation or order adopted by the appropriate Federal 
     banking authority).''.
       (2) Insured credit unions.--Section 207(c)(8)(D)(v) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(v)) is 
     amended to read as follows:
       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (which definition also applies to a reverse 
     repurchase agreement)--

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

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

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a total return, credit spread or credit 
     swap, option, future, or forward agreement; a commodity index 
     or commodity swap, option, future, or forward agreement; or a 
     weather swap, weather derivative, or weather option;
       ``(II) any agreement or transaction that is similar to any 
     other agreement or transaction referred to in this clause and 
     that is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference in such agreement) and that is a forward, swap, 
     future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence, or contingency associated with a financial, 
     commercial, or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;

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

     Such term is applicable for purposes of this subsection only 
     and shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank 
     Products Act of 2000.''.
       (2) Insured credit unions.--Section 207(c)(8)(D) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended 
     by adding at the end the following new clause:
       ``(vi) Swap agreement.--The term `swap agreement' means--

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a total return, credit spread or credit 
     swap, option, future, or forward agreement; a commodity index 
     or commodity swap, option, future, or forward agreement; or a 
     weather swap, weather derivative, or weather option;
       ``(II) any agreement or transaction that is similar to any 
     other agreement or transaction referred to in this clause and 
     that is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference in such agreement) and that is a forward, swap, 
     future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence, or contingency associated with a financial, 
     commercial, or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and
       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in subclause (I), (II), (III), (IV), or (V), 
     including any guarantee or reimbursement obligation in 
     connection with any agreement or transaction referred to in 
     any such subclause.

     Such term is applicable for purposes of this subsection only 
     and shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank 
     Products Act of 2000.''.
       (g) Definition of Transfer.--
       (1) FDIC-insured depository institutions.--Section 
     11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12 
     U.S.C.

[[Page 596]]

     1821(e)(8)(D)(viii)) is amended to read as follows:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the depository 
     institution's equity of redemption.''.
       (2) Insured credit unions.--Section 207(c)(8)(D) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) (as 
     amended by subsection (f) of this section) is amended by 
     adding at the end the following new clause:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the depository 
     institution's equity of redemption.''.
       (h) Treatment of Qualified Financial Contracts.--
       (1) FDIC-insured depository institutions.--Section 11(e)(8) 
     of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) 
     is amended--
       (A) in subparagraph (A)--
       (i) by striking ``paragraph (10)'' and inserting 
     ``paragraphs (9) and (10)'';
       (ii) in clause (i), by striking ``to cause the termination 
     or liquidation'' and inserting ``such person has to cause the 
     termination, liquidation, or acceleration''; and
       (iii) by striking clause (ii) and inserting the following 
     new clause:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to one or 
     more qualified financial contracts described in clause 
     (i);''; and
       (B) in subparagraph (E), by striking clause (ii) and 
     inserting the following:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to one or 
     more qualified financial contracts described in clause 
     (i);''.
       (2) Insured credit unions.--Section 207(c)(8) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is amended--
       (A) in subparagraph (A)--
       (i) by striking ``paragraph (12)'' and inserting 
     ``paragraphs (9) and (10)'';
       (ii) in clause (i), by striking ``to cause the termination 
     or liquidation'' and inserting ``such person has to cause the 
     termination, liquidation, or acceleration''; and
       (iii) by striking clause (ii) and inserting the following 
     new clause:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''; and
       (B) in subparagraph (E), by striking clause (ii) and 
     inserting the following new clause:
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement related to 1 or more 
     qualified financial contracts described in clause (i);''.
       (i) Avoidance of Transfers.--
       (1) FDIC-insured depository institutions.--Section 
     11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ``section 
     5242 of the Revised Statutes of the United States or any 
     other Federal or State law relating to the avoidance of 
     preferential or fraudulent transfers,'' before ``the 
     Corporation''.
       (2) Insured credit unions.--Section 207(c)(8)(C)(i) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(C)(i)) is 
     amended by inserting ``section 5242 of the Revised Statutes 
     of the United States or any other Federal or State law 
     relating to the avoidance of preferential or fraudulent 
     transfers,'' before ``the Board''.

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

       (a) Federal Deposit Insurance Corporation.--
       (1) In general.--Section 11(e)(8) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
       (A) in subparagraph (E), by striking ``other than paragraph 
     (12) of this subsection, subsection (d)(9)'' and inserting 
     ``other than subsections (d)(9) and (e)(10)''; and
       (B) by adding at the end the following new subparagraphs:
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Corporation, 
     or authorizing any court or agency to limit or delay, in any 
     manner, the right or power of the Corporation to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10) of this subsection or to disaffirm or repudiate 
     any such contract in accordance with subsection (e)(1) of 
     this section.
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of an insured depository institution in 
     default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of such party's status as a 
     nondefaulting party.''.
       (2) Technical and conforming amendment.--Section 
     11(e)(12)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(e)(12)(A)) is amended by inserting ``or the exercise of 
     rights or powers by'' after ``the appointment of''.
       (b) National Credit Union Administration Board.--
       (1) In general.--Section 207(c)(8) of the Federal Credit 
     Union Act (12 U.S.C. 1787(c)(8)) is amended--
       (A) in subparagraph (E) (as amended by section 901(h)), by 
     striking ``other than paragraph (12) of this subsection, 
     subsection (b)(9)'' and inserting ``other than subsections 
     (b)(9) and (c)(10)''; and
       (B) by adding at the end the following new subparagraphs:
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Board, or 
     authorizing any court or agency to limit or delay, in any 
     manner, the right or power of the Board to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10) of this subsection or to disaffirm or repudiate 
     any such contract in accordance with subsection (c)(1) of 
     this section.
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of an insured credit union in default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of such party's status as a 
     nondefaulting party.''.
       (2) Technical and conforming amendment.--Section 
     207(c)(12)(A) of the Federal Credit Union Act (12 U.S.C. 
     1787(c)(12)(A)) is amended by inserting ``or the exercise of 
     rights or powers by'' after ``the appointment of''.

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

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

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

       ``(ii) transfer none of the qualified financial contracts, 
     claims, property or other credit enhancement referred to in 
     clause (i) (with respect to such person and any affiliate of 
     such person).
       ``(B) Transfer to foreign bank, foreign financial 
     institution, or branch or agency of a foreign bank or 
     financial institution.--In transferring any qualified 
     financial contracts and related claims and property under 
     subparagraph (A)(i), the conservator or receiver for the 
     depository institution shall not make such transfer to a 
     foreign bank, financial institution organized under the laws 
     of a foreign country, or a branch or agency of a foreign bank 
     or financial institution unless, under the law applicable to 
     such bank, financial institution, branch or agency, to the 
     qualified financial contracts, and

[[Page 597]]

     to any netting contract, any security agreement or 
     arrangement or other credit enhancement related to one or 
     more qualified financial contracts, the contractual rights of 
     the parties to such qualified financial contracts, netting 
     contracts, security agreements or arrangements, or other 
     credit enhancements are enforceable substantially to the same 
     extent as permitted under this section.
       ``(C) Transfer of contracts subject to the rules of a 
     clearing organization.--In the event that a conservator or 
     receiver transfers any qualified financial contract and 
     related claims, property, and credit enhancements pursuant to 
     subparagraph (A)(i) and such contract is cleared by or 
     subject to the rules of a clearing organization, the clearing 
     organization shall not be required to accept the transferee 
     as a member by virtue of the transfer.
       ``(D) Definitions.--For purposes of this paragraph, the 
     term `financial institution' means a broker or dealer, a 
     depository institution, a futures commission merchant, or any 
     other institution, as determined by the Corporation by 
     regulation to be a financial institution, and the term 
     `clearing organization' has the same meaning as in section 
     402 of the Federal Deposit Insurance Corporation Improvement 
     Act of 1991.''.
       (2) Notice to qualified financial contract 
     counterparties.--Section 11(e)(10)(A) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended in the 
     material immediately following clause (ii) by striking ``the 
     conservator'' and all that follows through the period and 
     inserting the following: ``the conservator or receiver shall 
     notify any person who is a party to any such contract of such 
     transfer by 5:00 p.m. (eastern time) on the business day 
     following the date of the appointment of the receiver in the 
     case of a receivership, or the business day following such 
     transfer in the case of a conservatorship.''.
       (3) Rights against receiver and conservator and treatment 
     of bridge banks.--Section 11(e)(10) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(10)) is amended--
       (A) by redesignating subparagraph (B) as subparagraph (D); 
     and
       (B) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with an insured depository institution may 
     not exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(A) of 
     this subsection or section 403 or 404 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991, solely by 
     reason of or incidental to the appointment of a receiver for 
     the depository institution (or the insolvency or financial 
     condition of the depository institution for which the 
     receiver has been appointed)--

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

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

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

       (b) Insured Credit Unions.--
       (1) Transfers of qualified financial contracts to financial 
     institutions.--Section 207(c)(9) of the Federal Credit Union 
     Act (12 U.S.C. 1787(c)(9)) is amended to read as follows:
       ``(9) Transfer of qualified financial contracts.--
       ``(A) In general.--In making any transfer of assets or 
     liabilities of a credit union in default which includes any 
     qualified financial contract, the conservator or liquidating 
     agent for such credit union shall either--
       ``(i) transfer to 1 financial institution, other than a 
     financial institution for which a conservator, receiver, 
     trustee in bankruptcy, or other legal custodian has been 
     appointed or which is otherwise the subject of a bankruptcy 
     or insolvency proceeding--

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

       ``(ii) transfer none of the qualified financial contracts, 
     claims, property or other credit enhancement referred to in 
     clause (i) (with respect to such person and any affiliate of 
     such person).
       ``(B) Transfer to foreign bank, foreign financial 
     institution, or branch or agency of a foreign bank or 
     financial institution.--In transferring any qualified 
     financial contracts and related claims and property under 
     subparagraph (A)(i), the conservator or liquidating agent for 
     the credit union shall not make such transfer to a foreign 
     bank, financial institution organized under the laws of a 
     foreign country, or a branch or agency of a foreign bank or 
     financial institution unless, under the law applicable to 
     such bank, financial institution, branch or agency, to the 
     qualified financial contracts, and to any netting contract, 
     any security agreement or arrangement or other credit 
     enhancement related to 1 or more qualified financial 
     contracts, the contractual rights of the parties to such 
     qualified financial contracts, netting contracts, security 
     agreements or arrangements, or other credit enhancements are 
     enforceable substantially to the same extent as permitted 
     under this section.
       ``(C) Transfer of contracts subject to the rules of a 
     clearing organization.--In the event that a conservator or 
     liquidating agent transfers any qualified financial contract 
     and related claims, property, and credit enhancements 
     pursuant to subparagraph (A)(i) and such contract is cleared 
     by or subject to the rules of a clearing organization, the 
     clearing organization shall not be required to accept the 
     transferee as a member by virtue of the transfer.
       ``(D) Definitions.--For purposes of this paragraph--
       ``(i) the term `financial institution' means a broker or 
     dealer, a depository institution, a futures commission 
     merchant, a credit union, or any other institution, as 
     determined by the Board by regulation to be a financial 
     institution; and
       ``(ii) the term `clearing organization' has the same 
     meaning as in section 402 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991.''.
       (2) Notice to qualified financial contract 
     counterparties.--Section 207(c)(10)(A) of the Federal Credit 
     Union Act (12 U.S.C. 1787(c)(10)(A)) is amended in the 
     material immediately following clause (ii) by striking ``the 
     conservator'' and all that follows through the period and 
     inserting the following: ``the conservator or liquidating 
     agent shall notify any person who is a party to any such 
     contract of such transfer by 5:00 p.m. (eastern time) on the 
     business day following the date of the appointment of the 
     liquidating agent in the case of a liquidation, or the 
     business day following such transfer in the case of a 
     conservatorship.''.
       (3) Rights against liquidating agent and conservator and 
     treatment of bridge banks.--Section 207(c)(10) of the Federal 
     Credit Union Act (12 U.S.C. 1787(c)(10)) is amended--
       (A) by redesignating subparagraph (B) as subparagraph (D); 
     and
       (B) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B) Certain rights not enforceable.--
       ``(i) Liquidation.--A person who is a party to a qualified 
     financial contract with an insured credit union may not 
     exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(A) of 
     this subsection or section 403 or 404 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991, solely by 
     reason of or incidental to the appointment of a liquidating 
     agent for the credit union institution (or the insolvency or 
     financial condition of the credit union for which the 
     liquidating agent has been appointed)--

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

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with an insured credit union may 
     not exercise any

[[Page 598]]

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

       ``(I) immediately upon the organization of the credit 
     union; or
       ``(II) at the time of a purchase and assumption transaction 
     between the credit union and the Board as receiver for a 
     credit union in default.''.

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

       (a) FDIC-Insured Depository Institutions.--Section 11(e) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1821(e)) is 
     amended--
       (1) by redesignating paragraphs (11) through (15) as 
     paragraphs (12) through (16), respectively;
       (2) by inserting after paragraph (10) the following new 
     paragraph:
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which an insured depository 
     institution is a party, the conservator or receiver for such 
     institution shall either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the depository institution in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).''; 
     and
       (3) by adding at the end the following new paragraph:
       ``(17) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section 3(a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.''.
       (b) Insured Credit Unions.--Section 207(c) of the Federal 
     Credit Union Act (12 U.S.C. 1787(c)) is amended--
       (1) by redesignating paragraphs (11), (12), and (13) as 
     paragraphs (12), (13), and (14), respectively;
       (2) by inserting after paragraph (10) the following new 
     paragraph:
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or liquidating agent with 
     respect to any qualified financial contract to which an 
     insured credit union is a party, the conservator or 
     liquidating agent for such credit union shall either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the credit union in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).''; 
     and
       (3) by adding at the end the following new paragraph:
       ``(15) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section (a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.''.

     SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.

       (a) FDIC-Insured Depository Institutions.--Section 
     11(e)(8)(D)(vii) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(vii)) is amended to read as follows:
       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.''.
       (b) Insured Credit Unions.--Section 207(c)(8)(D) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended 
     by inserting after clause (vi) (as added by section 901(f)) 
     the following new clause:
       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.''.

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

       (a) Definitions.--Section 402 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
     4402) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A)(ii), by inserting before the 
     semicolon ``, or is exempt from such registration by order of 
     the Securities and Exchange Commission''; and
       (B) in subparagraph (B), by inserting before the period ``, 
     that has been granted an exemption under section 4(c)(1) of 
     the Commodity Exchange Act, or that is a multilateral 
     clearing organization (as defined in section 408 of this 
     Act)'';
       (2) in paragraph (6)--
       (A) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively;
       (B) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) an uninsured national bank or an uninsured State bank 
     that is a member of the Federal Reserve System, if the 
     national bank or State member bank is not eligible to make 
     application to become an insured bank under section 5 of the 
     Federal Deposit Insurance Act;''; and
       (C) by amending subparagraph (C), so redesignated, to read 
     as follows:
       ``(C) a branch or agency of a foreign bank, a foreign bank 
     and any branch or agency of the foreign bank, or the foreign 
     bank that established the branch or agency, as those terms 
     are defined in section 1(b) of the International Banking Act 
     of 1978;'';
       (3) in paragraph (11), by inserting before the period ``and 
     any other clearing organization with which such clearing 
     organization has a netting contract'';
       (4) by amending paragraph (14)(A)(i) to read as follows:
       ``(i) means a contract or agreement between 2 or more 
     financial institutions, clearing organizations, or members 
     that provides for netting present or future payment 
     obligations or payment entitlements (including liquidation or 
     close out values relating to such obligations or 
     entitlements) among the parties to the agreement; and''; and
       (5) by adding at the end the following new paragraph:
       ``(15) Payment.--The term `payment' means a payment of 
     United States dollars, another currency, or a composite 
     currency, and a noncash delivery, including a payment or 
     delivery to liquidate an unmatured obligation.''.
       (b) Enforceability of Bilateral Netting Contracts.--Section 
     403 of the Federal Deposit Insurance Corporation Improvement 
     Act of 1991 (12 U.S.C. 4403) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) 
     of the Federal Credit Union Act, or any order authorized 
     under section 5(b)(2) of the Securities Investor Protection 
     Act of 1970), the covered contractual payment obligations and 
     the covered contractual payment entitlements between any 2 
     financial institutions shall be netted in accordance with, 
     and subject to the conditions of, the terms of any applicable 
     netting contract (except as provided in section 561(b)(2) of 
     title 11, United States Code).''; and
       (2) by adding at the end the following new subsection:

[[Page 599]]

       ``(f) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to one or more netting contracts 
     between any 2 financial institutions shall be enforceable in 
     accordance with their terms (except as provided in section 
     561(b)(2) of title 11, United States Code), and shall not be 
     stayed, avoided, or otherwise limited by any State or Federal 
     law (other than paragraphs (8)(E), (8)(F), and (10)(B) of 
     section 11(e) of the Federal Deposit Insurance Act, 
     paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) of 
     the Federal Credit Union Act, and section 5(b)(2) of the 
     Securities Investor Protection Act of 1970).''.
       (c) Enforceability of Clearing Organization Netting 
     Contracts.--Section 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 4404) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) 
     of the Federal Credit Union Act, and any order authorized 
     under section 5(b)(2) of the Securities Investor Protection 
     Act of 1970), the covered contractual payment obligations and 
     the covered contractual payment entitlements of a member of a 
     clearing organization to and from all other members of a 
     clearing organization shall be netted in accordance with and 
     subject to the conditions of any applicable netting contract 
     (except as provided in section 561(b)(2) of title 11, United 
     States Code).''; and
       (2) by adding at the end the following new subsection:
       ``(h) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to one or more netting contracts 
     between any 2 members of a clearing organization shall be 
     enforceable in accordance with their terms (except as 
     provided in section 561(b)(2) of title 11, United States 
     Code), and shall not be stayed, avoided, or otherwise limited 
     by any State or Federal law (other than paragraphs (8)(E), 
     (8)(F), and (10)(B) of section 11(e) of the Federal Deposit 
     Insurance Act, paragraphs (8)(E), (8)(F), and (10)(B) of 
     section 207(c) of the Federal Credit Union Act, and section 
     5(b)(2) of the Securities Investor Protection Act of 
     1970).''.
       (d) Enforceability of Contracts With Uninsured National 
     Banks, Uninsured Federal Branches and Agencies, Certain 
     Uninsured State Member Banks, and Edge Act Corporations.--The 
     Federal Deposit Insurance Corporation Improvement Act of 1991 
     (12 U.S.C. 4401 et seq.) is amended--
       (1) by redesignating section 407 as section 407A; and
       (2) by inserting after section 406 the following new 
     section:

     ``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL 
                   BANKS, UNINSURED FEDERAL BRANCHES AND AGENCIES, 
                   CERTAIN UNINSURED STATE MEMBER BANKS, AND EDGE 
                   ACT CORPORATIONS.

       ``(a) In General.--Notwithstanding any other provision of 
     law, paragraphs (8), (9), (10), and (11) of section 11(e) of 
     the Federal Deposit Insurance Act shall apply to an uninsured 
     national bank or uninsured Federal branch or Federal agency, 
     a corporation chartered under section 25A of the Federal 
     Reserve Act, or an uninsured State member bank which 
     operates, or operates as, a multilateral clearing 
     organization pursuant to section 409 of this Act, except that 
     for such purpose--
       ``(1) any reference to the `Corporation as receiver' or 
     `the receiver or the Corporation' shall refer to the receiver 
     appointed by the Comptroller of the Currency in the case of 
     an uninsured national bank or uninsured Federal branch or 
     agency, or to the receiver appointed by the Board of 
     Governors of the Federal Reserve System in the case of a 
     corporation chartered under section 25A of the Federal 
     Reserve Act or an uninsured State member bank;
       ``(2) any reference to the `Corporation' (other than in 
     section 11(e)(8)(D) of such Act), the `Corporation, whether 
     acting as such or as conservator or receiver', a `receiver', 
     or a `conservator' shall refer to the receiver or conservator 
     appointed by the Comptroller of the Currency in the case of 
     an uninsured national bank or uninsured Federal branch or 
     agency, or to the receiver or conservator appointed by the 
     Board of Governors of the Federal Reserve System in the case 
     of a corporation chartered under section 25A of the Federal 
     Reserve Act or an uninsured State member bank; and
       ``(3) any reference to an `insured depository institution' 
     or `depository institution' shall refer to an uninsured 
     national bank, an uninsured Federal branch or Federal agency, 
     a corporation chartered under section 25A of the Federal 
     Reserve Act, or an uninsured State member bank which 
     operates, or operates as, a multilateral clearing 
     organization pursuant to section 409 of this Act.
       ``(b) Liability.--The liability of a receiver or 
     conservator of an uninsured national bank, uninsured Federal 
     branch or agency, a corporation chartered under section 25A 
     of the Federal Reserve Act, or an uninsured State member bank 
     which operates, or operates as, a multilateral clearing 
     organization pursuant to section 409 of this Act, shall be 
     determined in the same manner and subject to the same 
     limitations that apply to receivers and conservators of 
     insured depository institutions under section 11(e) of the 
     Federal Deposit Insurance Act.
       ``(c) Regulatory Authority.--
       ``(1) In general.--The Comptroller of the Currency in the 
     case of an uninsured national bank or uninsured Federal 
     branch or agency and the Board of Governors of the Federal 
     Reserve System in the case of a corporation chartered under 
     section 25A of the Federal Reserve Act, or an uninsured State 
     member bank that operates, or operates as, a multilateral 
     clearing organization pursuant to section 409 of this Act, in 
     consultation with the Federal Deposit Insurance Corporation, 
     may each promulgate regulations solely to implement this 
     section.
       ``(2) Specific requirement.--In promulgating regulations, 
     limited solely to implementing paragraphs (8), (9), (10), and 
     (11) of section 11(e) of the Federal Deposit Insurance Act, 
     the Comptroller of the Currency and the Board of Governors of 
     the Federal Reserve System each shall ensure that the 
     regulations generally are consistent with the regulations and 
     policies of the Federal Deposit Insurance Corporation adopted 
     pursuant to the Federal Deposit Insurance Act.
       ``(d) Definitions.--For purposes of this section, the terms 
     `Federal branch', `Federal agency', and `foreign bank' have 
     the same meanings as in section 1(b) of the International 
     Banking Act of 1978.''.

     SEC. 907. BANKRUPTCY LAW AMENDMENTS.

       (a) Definitions of Forward Contract, Repurchase Agreement, 
     Securities Clearing Agency, Swap Agreement, Commodity 
     Contract, and Securities Contract.--Title 11, United States 
     Code, is amended--
       (1) in section 101--
       (A) in paragraph (25)--
       (i) by striking ``means a contract'' and inserting 
     ``means--
       ``(A) a contract'';
       (ii) by striking ``, or any combination thereof or option 
     thereon;'' and inserting ``, or any other similar 
     agreement;''; and
       (iii) by adding at the end the following:
       ``(B) any combination of agreements or transactions 
     referred to in subparagraphs (A) and (C);
       ``(C) any option to enter into an agreement or transaction 
     referred to in subparagraph (A) or (B);
       ``(D) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), or (C), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this paragraph, except that such master agreement shall 
     be considered to be a forward contract under this paragraph 
     only with respect to each agreement or transaction under such 
     master agreement that is referred to in subparagraph (A), 
     (B), or (C); or
       ``(E) any security agreement or arrangement, or other 
     credit enhancement related to any agreement or transaction 
     referred to in subparagraph (A), (B), (C), or (D), including 
     any guarantee or reimbursement obligation by or to a forward 
     contract merchant or financial participant in connection with 
     any agreement or transaction referred to in any such 
     subparagraph, but not to exceed the damages in connection 
     with any such agreement or transaction, measured in 
     accordance with section 562;'';
       (B) in paragraph (46), by striking ``on any day during the 
     period beginning 90 days before the date of'' and inserting 
     ``at any time before'';
       (C) by amending paragraph (47) to read as follows:
       ``(47) `repurchase agreement' (which definition also 
     applies to a reverse repurchase agreement)--
       ``(A) means--
       ``(i) an agreement, including related terms, which provides 
     for the transfer of one or more certificates of deposit, 
     mortgage related securities (as defined in section 3 of the 
     Securities Exchange Act of 1934), mortgage loans, interests 
     in mortgage related securities or mortgage loans, eligible 
     bankers' acceptances, qualified foreign government securities 
     (defined as a security that is a direct obligation of, or 
     that is fully guaranteed by, the central government of a 
     member of the Organization for Economic Cooperation and 
     Development), or securities that are direct obligations of, 
     or that are fully guaranteed by, the United States or any 
     agency of the United States against the transfer of funds by 
     the transferee of such certificates of deposit, eligible 
     bankers' acceptances, securities, mortgage loans, or 
     interests, with a simultaneous agreement by such transferee 
     to transfer to the transferor thereof certificates of 
     deposit, eligible bankers' acceptance, securities, mortgage 
     loans, or interests of the kind described in this clause, at 
     a date certain not later than 1 year after such transfer or 
     on demand, against the transfer of funds;
       ``(ii) any combination of agreements or transactions 
     referred to in clauses (i) and (iii);
       ``(iii) an option to enter into an agreement or transaction 
     referred to in clause (i) or (ii);

[[Page 600]]

       ``(iv) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), or (iii), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a repurchase 
     agreement under this paragraph, except that such master 
     agreement shall be considered to be a repurchase agreement 
     under this paragraph only with respect to each agreement or 
     transaction under the master agreement that is referred to in 
     clause (i), (ii), or (iii); or
       ``(v) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in clause (i), (ii), (iii), or (iv), including any 
     guarantee or reimbursement obligation by or to a repo 
     participant or financial participant in connection with any 
     agreement or transaction referred to in any such clause, but 
     not to exceed the damages in connection with any such 
     agreement or transaction, measured in accordance with section 
     562 of this title; and
       ``(B) does not include a repurchase obligation under a 
     participation in a commercial mortgage loan;'';
       (D) in paragraph (48), by inserting ``, or exempt from such 
     registration under such section pursuant to an order of the 
     Securities and Exchange Commission,'' after ``1934''; and
       (E) by amending paragraph (53B) to read as follows:
       ``(53B) `swap agreement'--
       ``(A) means--
       ``(i) any agreement, including the terms and conditions 
     incorporated by reference in such agreement, which is--

       ``(I) an interest rate swap, option, future, or forward 
     agreement, including a rate floor, rate cap, rate collar, 
     cross-currency rate swap, and basis swap;
       ``(II) a spot, same day-tomorrow, tomorrow-next, forward, 
     or other foreign exchange or precious metals agreement;
       ``(III) a currency swap, option, future, or forward 
     agreement;
       ``(IV) an equity index or equity swap, option, future, or 
     forward agreement;
       ``(V) a debt index or debt swap, option, future, or forward 
     agreement;
       ``(VI) a total return, credit spread or credit swap, 
     option, future, or forward agreement;
       ``(VII) a commodity index or a commodity swap, option, 
     future, or forward agreement; or
       ``(VIII) a weather swap, weather derivative, or weather 
     option;

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

       ``(I) is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference therein); and
       ``(II) is a forward, swap, future, or option on one or more 
     rates, currencies, commodities, equity securities, or other 
     equity instruments, debt securities or other debt 
     instruments, quantitative measures associated with an 
     occurrence, extent of an occurrence, or contingency 
     associated with a financial, commercial, or economic 
     consequence, or economic or financial indices or measures of 
     economic or financial risk or value;

       ``(iii) any combination of agreements or transactions 
     referred to in this subparagraph;
       ``(iv) any option to enter into an agreement or transaction 
     referred to in this subparagraph;
       ``(v) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), (iii), or (iv), 
     together with all supplements to any such master agreement, 
     and without regard to whether the master agreement contains 
     an agreement or transaction that is not a swap agreement 
     under this paragraph, except that the master agreement shall 
     be considered to be a swap agreement under this paragraph 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in clause (i), (ii), 
     (iii), or (iv); or
       ``(vi) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in clause (i) through (v), including any 
     guarantee or reimbursement obligation by or to a swap 
     participant or financial participant in connection with any 
     agreement or transaction referred to in any such clause, but 
     not to exceed the damages in connection with any such 
     agreement or transaction, measured in accordance with section 
     562; and
       ``(B) is applicable for purposes of this title only, and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank 
     Products Act of 2000;'';
       (2) in section 741(7), by striking paragraph (7) and 
     inserting the following:
       ``(7) `securities contract'--
       ``(A) means--
       ``(i) a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including an interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option, 
     and including any repurchase or reverse repurchase 
     transaction on any such security, certificate of deposit, 
     mortgage loan, interest, group or index, or option;
       ``(ii) any option entered into on a national securities 
     exchange relating to foreign currencies;
       ``(iii) the guarantee by or to any securities clearing 
     agency of a settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, or mortgage loans or interests therein 
     (including any interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option;
       ``(iv) any margin loan;
       ``(v) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this subparagraph;
       ``(vi) any combination of the agreements or transactions 
     referred to in this subparagraph;
       ``(vii) any option to enter into any agreement or 
     transaction referred to in this subparagraph;
       ``(viii) a master agreement that provides for an agreement 
     or transaction referred to in clause (i), (ii), (iii), (iv), 
     (v), (vi), or (vii), together with all supplements to any 
     such master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a securities contract under this subparagraph, except 
     that such master agreement shall be considered to be a 
     securities contract under this subparagraph only with respect 
     to each agreement or transaction under such master agreement 
     that is referred to in clause (i), (ii), (iii), (iv), (v), 
     (vi), or (vii); or
       ``(ix) any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this subparagraph, including any guarantee or 
     reimbursement obligation by or to a stockbroker, securities 
     clearing agency, financial institution, or financial 
     participant in connection with any agreement or transaction 
     referred to in this subparagraph, but not to exceed the 
     damages in connection with any such agreement or transaction, 
     measured in accordance with section 562; and
       ``(B) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan;''; and
       (3) in section 761(4)--
       (A) by striking ``or'' at the end of subparagraph (D); and
       (B) by adding at the end the following:
       ``(F) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(G) any combination of the agreements or transactions 
     referred to in this paragraph;
       ``(H) any option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(I) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), (C), (D), 
     (E), (F), (G), or (H), together with all supplements to such 
     master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a commodity contract under this paragraph, except that 
     the master agreement shall be considered to be a commodity 
     contract under this paragraph only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subparagraph (A), (B), (C), (D), (E), (F), 
     (G), or (H); or
       ``(J) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this paragraph, including any guarantee or 
     reimbursement obligation by or to a commodity broker or 
     financial participant in connection with any agreement or 
     transaction referred to in this paragraph, but not to exceed 
     the damages in connection with any such agreement or 
     transaction, measured in accordance with section 562;''.
       (b) Definitions of Financial Institution, Financial 
     Participant, and Forward Contract Merchant.--Section 101 of 
     title 11, United States Code, is amended--
       (1) by striking paragraph (22) and inserting the following:
       ``(22) `financial institution' means--
       ``(A) a Federal reserve bank, or an entity (domestic or 
     foreign) that is a commercial or savings bank, industrial 
     savings bank, savings and loan association, trust company, 
     federally-insured credit union, or receiver, liquidating 
     agent, or conservator for such entity and, when any such 
     Federal reserve bank, receiver, liquidating agent, 
     conservator or entity is acting as agent or custodian for a 
     customer in connection with a securities contract (as defined 
     in section 741) such customer; or

[[Page 601]]

       ``(B) in connection with a securities contract (as defined 
     in section 741) an investment company registered under the 
     Investment Company Act of 1940;'';
       (2) by inserting after paragraph (22) the following:
       ``(22A) `financial participant' means--
       ``(A) an entity that, at the time it enters into a 
     securities contract, commodity contract, swap agreement, 
     repurchase agreement, or forward contract, or at the time of 
     the date of the filing of the petition, has one or more 
     agreements or transactions described in paragraph (1), (2), 
     (3), (4), (5), or (6) of section 561(a) with the debtor or 
     any other entity (other than an affiliate) of a total gross 
     dollar value of not less than $1,000,000,000 in notional or 
     actual principal amount outstanding on any day during the 
     previous 15-month period, or has gross mark-to-market 
     positions of not less than $100,000,000 (aggregated across 
     counterparties) in one or more such agreements or 
     transactions with the debtor or any other entity (other than 
     an affiliate) on any day during the previous 15-month period; 
     or
       ``(B) a clearing organization (as defined in section 402 of 
     the Federal Deposit Insurance Corporation Improvement Act of 
     1991);''; and
       (3) by striking paragraph (26) and inserting the following:
       ``(26) `forward contract merchant' means a Federal reserve 
     bank, or an entity the business of which consists in whole or 
     in part of entering into forward contracts as or with 
     merchants in a commodity (as defined in section 761) or any 
     similar good, article, service, right, or interest which is 
     presently or in the future becomes the subject of dealing in 
     the forward contract trade;''.
       (c) Definition of Master Netting Agreement and Master 
     Netting Agreement Participant.--Section 101 of title 11, 
     United States Code, is amended by inserting after paragraph 
     (38) the following new paragraphs:
       ``(38A) `master netting agreement'--
       ``(A) means an agreement providing for the exercise of 
     rights, including rights of netting, setoff, liquidation, 
     termination, acceleration, or close out, under or in 
     connection with one or more contracts that are described in 
     any one or more of paragraphs (1) through (5) of section 
     561(a), or any security agreement or arrangement or other 
     credit enhancement related to one or more of the foregoing, 
     including any guarantee or reimbursement obligation related 
     to 1 or more of the foregoing; and
       ``(B) if the agreement contains provisions relating to 
     agreements or transactions that are not contracts described 
     in paragraphs (1) through (5) of section 561(a), shall be 
     deemed to be a master netting agreement only with respect to 
     those agreements or transactions that are described in any 
     one or more of paragraphs (1) through (5) of section 561(a);
       ``(38B) `master netting agreement participant' means an 
     entity that, at any time before the date of the filing of the 
     petition, is a party to an outstanding master netting 
     agreement with the debtor;''.
       (d) Swap Agreements, Securities Contracts, Commodity 
     Contracts, Forward Contracts, Repurchase Agreements, and 
     Master Netting Agreements Under the Automatic-Stay.--
       (1) In general.--Section 362(b) of title 11, United States 
     Code, as amended by sections 224, 303, 311, 401, and 718, is 
     amended--
       (A) in paragraph (6), by inserting ``, pledged to, under 
     the control of,'' after ``held by'';
       (B) in paragraph (7), by inserting ``, pledged to, under 
     the control of,'' after ``held by'';
       (C) by striking paragraph (17) and inserting the following:
       ``(17) under subsection (a), of the setoff by a swap 
     participant or financial participant of a mutual debt and 
     claim under or in connection with one or more swap agreements 
     that constitutes the setoff of a claim against the debtor for 
     any payment or other transfer of property due from the debtor 
     under or in connection with any swap agreement against any 
     payment due to the debtor from the swap participant or 
     financial participant under or in connection with any swap 
     agreement or against cash, securities, or other property held 
     by, pledged to, under the control of, or due from such swap 
     participant or financial participant to margin, guarantee, 
     secure, or settle any swap agreement;''; and
       (D) by inserting after paragraph (26) the following:
       ``(27) under subsection (a), of the setoff by a master 
     netting agreement participant of a mutual debt and claim 
     under or in connection with one or more master netting 
     agreements or any contract or agreement subject to such 
     agreements that constitutes the setoff of a claim against the 
     debtor for any payment or other transfer of property due from 
     the debtor under or in connection with such agreements or any 
     contract or agreement subject to such agreements against any 
     payment due to the debtor from such master netting agreement 
     participant under or in connection with such agreements or 
     any contract or agreement subject to such agreements or 
     against cash, securities, or other property held by, pledged 
     to, under the control of, or due from such master netting 
     agreement participant to margin, guarantee, secure, or settle 
     such agreements or any contract or agreement subject to such 
     agreements, to the extent that such participant is eligible 
     to exercise such offset rights under paragraph (6), (7), or 
     (17) for each individual contract covered by the master 
     netting agreement in issue; and''.
       (2) Limitation.--Section 362 of title 11, United States 
     Code, as amended by sections 106, 305, 311, and 441, is 
     amended by adding at the end the following:
       ``(o) The exercise of rights not subject to the stay 
     arising under subsection (a) pursuant to paragraph (6), (7), 
     (17), or (27) of subsection (b) shall not be stayed by any 
     order of a court or administrative agency in any proceeding 
     under this title.''.
       (e) Limitation of Avoidance Powers Under Master Netting 
     Agreement.--Section 546 of title 11, United States Code, is 
     amended--
       (1) in subsection (g) (as added by section 103 of Public 
     Law 101-311)--
       (A) by striking ``under a swap agreement'';
       (B) by striking ``in connection with a swap agreement'' and 
     inserting ``under or in connection with any swap agreement''; 
     and
       (C) by inserting ``or financial participant'' after ``swap 
     participant''; and
       (2) by adding at the end the following:
       ``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), 
     and 548(b) the trustee may not avoid a transfer made by or to 
     a master netting agreement participant under or in connection 
     with any master netting agreement or any individual contract 
     covered thereby that is made before the commencement of the 
     case, except under section 548(a)(1)(A) and except to the 
     extent that the trustee could otherwise avoid such a transfer 
     made under an individual contract covered by such master 
     netting agreement.''.
       (f) Fraudulent Transfers of Master Netting Agreements.--
     Section 548(d)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (C), by striking ``and'' at the end;
       (2) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) a master netting agreement participant that receives 
     a transfer in connection with a master netting agreement or 
     any individual contract covered thereby takes for value to 
     the extent of such transfer, except that, with respect to a 
     transfer under any individual contract covered thereby, to 
     the extent that such master netting agreement participant 
     otherwise did not take (or is otherwise not deemed to have 
     taken) such transfer for value.''.
       (g) Termination or Acceleration of Securities Contracts.--
     Section 555 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

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

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

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

       (2) in the first sentence, by striking ``liquidation'' and 
     inserting ``liquidation, termination, or acceleration''; and
       (3) in the second sentence, by striking ``As used'' and all 
     that follows through ``right,'' and inserting ``As used in 
     this section, the term `contractual right' includes a right 
     set forth in a rule or bylaw of a derivatives clearing 
     organization (as defined in the Commodity Exchange Act), a 
     multilateral clearing organization (as defined in the Federal 
     Deposit Insurance Corporation Improvement Act of 1991), a 
     national securities exchange, a national securities 
     association, a securities clearing agency, a contract market 
     designated under the Commodity Exchange Act, a derivatives 
     transaction execution facility registered under the Commodity 
     Exchange Act, or a board of trade (as defined in the 
     Commodity Exchange Act) or in a resolution of the governing 
     board thereof and a right,''.
       (i) Termination or Acceleration of Repurchase Agreements.--
     Section 559 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

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

       (2) in the first sentence, by striking ``liquidation'' and 
     inserting ``liquidation, termination, or acceleration''; and
       (3) in the third sentence, by striking ``As used'' and all 
     that follows through ``right,'' and inserting ``As used in 
     this section, the term `contractual right' includes a right 
     set forth in a rule or bylaw of a derivatives clearing 
     organization (as defined in the Commodity Exchange Act), a 
     multilateral clearing organization (as defined in the Federal 
     Deposit Insurance Corporation Improvement Act of 1991), a 
     national securities exchange, a national securities 
     association, a securities clearing agency, a contract market 
     designated under the Commodity Exchange Act, a derivatives 
     transaction execution facility

[[Page 602]]

     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act) or in a 
     resolution of the governing board thereof and a right,''.
       (j) Liquidation, Termination, or Acceleration of Swap 
     Agreements.--Section 560 of title 11, United States Code, is 
     amended--
       (1) by amending the section heading to read as follows:

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

       (2) in the first sentence, by striking ``termination of a 
     swap agreement'' and inserting ``liquidation, termination, or 
     acceleration of one or more swap agreements'';
       (3) by striking ``in connection with any swap agreement'' 
     and inserting ``in connection with the termination, 
     liquidation, or acceleration of one or more swap 
     agreements''; and
       (4) in the second sentence, by striking ``As used'' and all 
     that follows through ``right,'' and inserting ``As used in 
     this section, the term `contractual right' includes a right 
     set forth in a rule or bylaw of a derivatives clearing 
     organization (as defined in the Commodity Exchange Act), a 
     multilateral clearing organization (as defined in the Federal 
     Deposit Insurance Corporation Improvement Act of 1991), a 
     national securities exchange, a national securities 
     association, a securities clearing agency, a contract market 
     designated under the Commodity Exchange Act, a derivatives 
     transaction execution facility registered under the Commodity 
     Exchange Act, or a board of trade (as defined in the 
     Commodity Exchange Act) or in a resolution of the governing 
     board thereof and a right,''.
       (k) Liquidation, Termination, Acceleration, or Offset Under 
     a Master Netting Agreement and Across Contracts.--
       (1) In general.--Title 11, United States Code, is amended 
     by inserting after section 560 the following:

     ``Sec. 561. Contractual right to terminate, liquidate, 
       accelerate, or offset under a master netting agreement and 
       across contracts; proceedings under chapter 15

       ``(a) Subject to subsection (b), the exercise of any 
     contractual right, because of a condition of the kind 
     specified in section 365(e)(1), to cause the termination, 
     liquidation, or acceleration of or to offset or net 
     termination values, payment amounts, or other transfer 
     obligations arising under or in connection with one or more 
     (or the termination, liquidation, or acceleration of one or 
     more)--
       ``(1) securities contracts, as defined in section 741(7);
       ``(2) commodity contracts, as defined in section 761(4);
       ``(3) forward contracts;
       ``(4) repurchase agreements;
       ``(5) swap agreements; or
       ``(6) master netting agreements,
     shall not be stayed, avoided, or otherwise limited by 
     operation of any provision of this title or by any order of a 
     court or administrative agency in any proceeding under this 
     title.
       ``(b)(1) A party may exercise a contractual right described 
     in subsection (a) to terminate, liquidate, or accelerate only 
     to the extent that such party could exercise such a right 
     under section 555, 556, 559, or 560 for each individual 
     contract covered by the master netting agreement in issue.
       ``(2) If a debtor is a commodity broker subject to 
     subchapter IV of chapter 7--
       ``(A) a party may not net or offset an obligation to the 
     debtor arising under, or in connection with, a commodity 
     contract traded on or subject to the rules of a contract 
     market designated under the Commodity Exchange Act or a 
     derivatives transaction execution facility registered under 
     the Commodity Exchange Act against any claim arising under, 
     or in connection with, other instruments, contracts, or 
     agreements listed in subsection (a) except to the extent that 
     the party has positive net equity in the commodity accounts 
     at the debtor, as calculated under such subchapter; and
       ``(B) another commodity broker may not net or offset an 
     obligation to the debtor arising under, or in connection 
     with, a commodity contract entered into or held on behalf of 
     a customer of the debtor and traded on or subject to the 
     rules of a contract market designated under the Commodity 
     Exchange Act or a derivatives transaction execution facility 
     registered under the Commodity Exchange Act against any claim 
     arising under, or in connection with, other instruments, 
     contracts, or agreements listed in subsection (a).
       ``(3) No provision of subparagraph (A) or (B) of paragraph 
     (2) shall prohibit the offset of claims and obligations that 
     arise under--
       ``(A) a cross-margining agreement or similar arrangement 
     that has been approved by the Commodity Futures Trading 
     Commission or submitted to the Commodity Futures Trading 
     Commission under paragraph (1) or (2) of section 5c(c) of the 
     Commodity Exchange Act and has not been abrogated or rendered 
     ineffective by the Commodity Futures Trading Commission; or
       ``(B) any other netting agreement between a clearing 
     organization (as defined in section 761) and another entity 
     that has been approved by the Commodity Futures Trading 
     Commission.
       ``(c) As used in this section, the term `contractual right' 
     includes a right set forth in a rule or bylaw of a 
     derivatives clearing organization (as defined in the 
     Commodity Exchange Act), a multilateral clearing organization 
     (as defined in the Federal Deposit Insurance Corporation 
     Improvement Act of 1991), a national securities exchange, a 
     national securities association, a securities clearing 
     agency, a contract market designated under the Commodity 
     Exchange Act, a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act) or in a 
     resolution of the governing board thereof, and a right, 
     whether or not evidenced in writing, arising under common 
     law, under law merchant, or by reason of normal business 
     practice.
       ``(d) Any provisions of this title relating to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, or master netting agreements 
     shall apply in a case under chapter 15, so that enforcement 
     of contractual provisions of such contracts and agreements in 
     accordance with their terms will not be stayed or otherwise 
     limited by operation of any provision of this title or by 
     order of a court in any case under this title, and to limit 
     avoidance powers to the same extent as in a proceeding under 
     chapter 7 or 11 of this title (such enforcement not to be 
     limited based on the presence or absence of assets of the 
     debtor in the United States).''.
       (2) Conforming amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, is amended by 
     inserting after the item relating to section 560 the 
     following:

``561. Contractual right to terminate, liquidate, accelerate, or offset 
              under a master netting agreement and across contracts; 
              proceedings under chapter 15.''.
       (l) Commodity Broker Liquidations.--Title 11, United States 
     Code, is amended by inserting after section 766 the 
     following:

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

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

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

       ``Notwithstanding any other provision of this title, the 
     exercise of rights by a forward contract merchant, commodity 
     broker, stockbroker, financial institution, financial 
     participant, securities clearing agency, swap participant, 
     repo participant, or master netting agreement participant 
     under this title shall not affect the priority of any 
     unsecured claim it may have after the exercise of such 
     rights.''.
       (n) Setoff.--Section 553 of title 11, United States Code, 
     is amended--
       (1) in subsection (a)(2)(B)(ii), by inserting before the 
     semicolon the following: ``(except for a setoff of a kind 
     described in section 362(b)(6), 362(b)(7), 362(b)(17), 
     362(b)(27), 555, 556, 559, 560, or 561)'';
       (2) in subsection (a)(3)(C), by inserting before the period 
     the following: ``(except for a setoff of a kind described in 
     section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 
     556, 559, 560, or 561)''; and
       (3) in subsection (b)(1), by striking ``362(b)(14),'' and 
     inserting ``362(b)(17), 362(b)(27), 555, 556, 559, 560, 
     561,''.
       (o) Securities Contracts, Commodity Contracts, and Forward 
     Contracts.--Title 11, United States Code, is amended--
       (1) in section 362(b)(6), by striking ``financial 
     institutions,'' each place such term appears and inserting 
     ``financial institution, financial participant,'';
       (2) in sections 362(b)(7) and 546(f), by inserting ``or 
     financial participant'' after ``repo participant'' each place 
     such term appears;
       (3) in section 546(e), by inserting ``financial 
     participant,'' after ``financial institution,'';
       (4) in section 548(d)(2)(B), by inserting ``financial 
     participant,'' after ``financial institution,'';
       (5) in section 548(d)(2)(C), by inserting ``or financial 
     participant'' after ``repo participant'';
       (6) in section 548(d)(2)(D), by inserting ``or financial 
     participant'' after ``swap participant'';
       (7) in section 555--
       (A) by inserting ``financial participant,'' after 
     ``financial institution,''; and
       (B) by striking the second sentence and inserting the 
     following: ``As used in this section, the term `contractual 
     right' includes a right set forth in a rule or bylaw of a 
     derivatives clearing organization (as defined in the

[[Page 603]]

     Commodity Exchange Act), a multilateral clearing organization 
     (as defined in the Federal Deposit Insurance Corporation 
     Improvement Act of 1991), a national securities exchange, a 
     national securities association, a securities clearing 
     agency, a contract market designated under the Commodity 
     Exchange Act, a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act), or in a 
     resolution of the governing board thereof, and a right, 
     whether or not in writing, arising under common law, under 
     law merchant, or by reason of normal business practice.'';
       (8) in section 556, by inserting ``, financial 
     participant,'' after ``commodity broker'';
       (9) in section 559, by inserting ``or financial 
     participant'' after ``repo participant'' each place such term 
     appears; and
       (10) in section 560, by inserting ``or financial 
     participant'' after ``swap participant''.
       (p) Conforming Amendments.--Title 11, United States Code, 
     is amended--
       (1) in the table of sections for chapter 5--
       (A) by amending the items relating to sections 555 and 556 
     to read as follows:

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

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

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

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

     SEC. 908. RECORDKEEPING REQUIREMENTS.

       (a) FDIC-Insured Depository Institutions.--Section 11(e)(8) 
     of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(H) Recordkeeping requirements.--The Corporation, in 
     consultation with the appropriate Federal banking agencies, 
     may prescribe regulations requiring more detailed 
     recordkeeping by any insured depository institution with 
     respect to qualified financial contracts (including market 
     valuations) only if such insured depository institution is in 
     a troubled condition (as such term is defined by the 
     Corporation pursuant to section 32).''.
       (b) Insured Credit Unions.--Section 207(c)(8) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is amended by 
     adding at the end the following new subparagraph:
       ``(H) Recordkeeping requirements.--The Board, in 
     consultation with the appropriate Federal banking agencies, 
     may prescribe regulations requiring more detailed 
     recordkeeping by any insured credit union with respect to 
     qualified financial contracts (including market valuations) 
     only if such insured credit union is in a troubled condition 
     (as such term is defined by the Board pursuant to section 
     212).''.

     SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION 
                   REQUIREMENT.

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

     SEC. 910. DAMAGE MEASURE.

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

     ``Sec. 562. Timing of damage measurement in connection with 
       swap agreements, securities contracts, forward contracts, 
       commodity contracts, repurchase agreements, and master 
       netting agreements

       ``(a) If the trustee rejects a swap agreement, securities 
     contract (as defined in section 741), forward contract, 
     commodity contract (as defined in section 761), repurchase 
     agreement, or master netting agreement pursuant to section 
     365(a), or if a forward contract merchant, stockbroker, 
     financial institution, securities clearing agency, repo 
     participant, financial participant, master netting agreement 
     participant, or swap participant liquidates, terminates, or 
     accelerates such contract or agreement, damages shall be 
     measured as of the earlier of--
       ``(1) the date of such rejection; or
       ``(2) the date or dates of such liquidation, termination, 
     or acceleration.
       ``(b) If there are not any commercially reasonable 
     determinants of value as of any date referred to in paragraph 
     (1) or (2) of subsection (a), damages shall be measured as of 
     the earliest subsequent date or dates on which there are 
     commercially reasonable determinants of value.
       ``(c) For the purposes of subsection (b), if damages are 
     not measured as of the date or dates of rejection, 
     liquidation, termination, or acceleration, and the forward 
     contract merchant, stockbroker, financial institution, 
     securities clearing agency, repo participant, financial 
     participant, master netting agreement participant, or swap 
     participant or the trustee objects to the timing of the 
     measurement of damages--
       ``(1) the trustee, in the case of an objection by a forward 
     contract merchant, stockbroker, financial institution, 
     securities clearing agency, repo participant, financial 
     participant, master netting agreement participant, or swap 
     participant; or
       ``(2) the forward contract merchant, stockbroker, financial 
     institution, securities clearing agency, repo participant, 
     financial participant, master netting agreement participant, 
     or swap participant, in the case of an objection by the 
     trustee,
     has the burden of proving that there were no commercially 
     reasonable determinants of value as of such date or dates.''; 
     and
       (2) in the table of sections for chapter 5, by inserting 
     after the item relating to section 561 (as added by section 
     907) the following new item:

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

     SEC. 911. SIPC STAY.

       Section 5(b)(2) of the Securities Investor Protection Act 
     of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Exception from stay.--
       ``(i) Notwithstanding section 362 of title 11, United 
     States Code, neither the filing of an application under 
     subsection (a)(3) nor any order or decree obtained by SIPC 
     from the court shall operate as a stay of any contractual 
     rights of a creditor to liquidate, terminate, or accelerate a 
     securities contract, commodity contract, forward contract, 
     repurchase agreement, swap agreement, or master netting 
     agreement, as those terms are defined in sections 101, 741, 
     and 761 of title 11, United States Code, to offset or net 
     termination values, payment amounts, or other transfer 
     obligations arising under or in connection with one or more 
     of such contracts or agreements, or to foreclose on any cash 
     collateral pledged by the debtor, whether or not with respect 
     to one or more of such contracts or agreements.
       ``(ii) Notwithstanding clause (i), such application, order, 
     or decree may operate as a stay of the foreclosure on, or 
     disposition of, securities collateral pledged by the debtor, 
     whether or not with respect to one or more of such contracts 
     or agreements, securities sold by the debtor under a 
     repurchase agreement, or securities lent under a securities 
     lending agreement.
       ``(iii) As used in this subparagraph, the term `contractual 
     right' includes a right set forth in a rule or bylaw of a 
     national securities exchange, a national securities 
     association, or a securities clearing agency, a right set 
     forth in a bylaw of a clearing organization or contract 
     market or in a resolution of the governing board thereof, and 
     a right, whether or not in writing, arising under common law, 
     under law merchant, or by reason of normal business 
     practice.''.

[[Page 604]]



       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

     SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--
       (1) In general.--Chapter 12 of title 11, United States 
     Code, as reenacted by section 149 of division C of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999 (Public Law 105-277), is hereby 
     reenacted, and as here reenacted is amended by this Act.
       (2) Effective date.--Subsection (a) shall take effect on 
     the date of the enactment of this Act.
       (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, as amended 
     by section 226, is amended by inserting ``101(18),'' after 
     ``101(3),'' each place it appears.

     SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

       (a) Contents of Plan.--Section 1222(a)(2) of title 11, 
     United States Code, as amended by section 213, is amended to 
     read as follows:
       ``(2) provide for the full payment, in deferred cash 
     payments, of all claims entitled to priority under section 
     507, unless--
       ``(A) the claim is a claim owed to a governmental unit that 
     arises as a result of the sale, transfer, exchange, or other 
     disposition of any farm asset used in the debtor's farming 
     operation, in which case the claim shall be treated as an 
     unsecured claim that is not entitled to priority under 
     section 507, but the debt shall be treated in such manner 
     only if the debtor receives a discharge; or
       ``(B) the holder of a particular claim agrees to a 
     different treatment of that claim;''.
       (b) Special Notice Provisions.--Section 1231(b) of title 
     11, United States Code, as so designated by section 719, is 
     amended by striking ``a State or local governmental unit'' 
     and inserting ``any governmental unit''.
       (c) Effective Date; Application of Amendments.--This 
     section and the amendments made by this section shall take 
     effect on the date of the enactment of this Act and shall not 
     apply with respect to cases commenced under title 11 of the 
     United States Code before such date.

     SEC. 1004. DEFINITION OF FAMILY FARMER.

       Section 101(18) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A)--
       (A) by striking ``$1,500,000'' and inserting 
     ``$3,237,000''; and
       (B) by striking ``80'' and inserting ``50''; and
       (2) in subparagraph (B)(ii)--
       (A) by striking ``$1,500,000'' and inserting 
     ``$3,237,000''; and
       (B) by striking ``80'' and inserting ``50''.

     SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND 
                   SPOUSE RECEIVE OVER 50 PERCENT OF INCOME FROM 
                   FARMING OPERATION IN YEAR PRIOR TO BANKRUPTCY.

       Section 101(18)(A) of title 11, United States Code, is 
     amended by striking ``for the taxable year preceding the 
     taxable year'' and inserting the following:
     ``for--
       ``(i) the taxable year preceding; or
       ``(ii) each of the 2d and 3d taxable years preceding;
     the taxable year''.

     SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF 
                   DISPOSABLE INCOME.

       (a) Confirmation of Plan.--Section 1225(b)(1) of title 11, 
     United States Code, is amended--
       (1) in subparagraph (A) by striking ``or'' at the end;
       (2) in subparagraph (B) by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the value of the property to be distributed under the 
     plan in the 3-year period, or such longer period as the court 
     may approve under section 1222(c), beginning on the date that 
     the first distribution is due under the plan is not less than 
     the debtor's projected disposable income for such period.''.
       (b) Modification of Plan.--Section 1229 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(d) A plan may not be modified under this section--
       ``(1) to increase the amount of any payment due before the 
     plan as modified becomes the plan;
       ``(2) by anyone except the debtor, based on an increase in 
     the debtor's disposable income, to increase the amount of 
     payments to unsecured creditors required for a particular 
     month so that the aggregate of such payments exceeds the 
     debtor's disposable income for such month; or
       ``(3) in the last year of the plan by anyone except the 
     debtor, to require payments that would leave the debtor with 
     insufficient funds to carry on the farming operation after 
     the plan is completed.''.

     SEC. 1007. FAMILY FISHERMEN.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (7) the following:
       ``(7A) `commercial fishing operation' means--
       ``(A) the catching or harvesting of fish, shrimp, lobsters, 
     urchins, seaweed, shellfish, or other aquatic species or 
     products of such species; or
       ``(B) for purposes of section 109 and chapter 12, 
     aquaculture activities consisting of raising for market any 
     species or product described in subparagraph (A);
       ``(7B) `commercial fishing vessel' means a vessel used by a 
     family fisherman to carry out a commercial fishing 
     operation;''; and
       (2) by inserting after paragraph (19) the following:
       ``(19A) `family fisherman' means--
       ``(A) an individual or individual and spouse engaged in a 
     commercial fishing operation--
       ``(i) whose aggregate debts do not exceed $1,500,000 and 
     not less than 80 percent of whose aggregate noncontingent, 
     liquidated debts (excluding a debt for the principal 
     residence of such individual or such individual and spouse, 
     unless such debt arises out of a commercial fishing 
     operation), on the date the case is filed, arise out of a 
     commercial fishing operation owned or operated by such 
     individual or such individual and spouse; and
       ``(ii) who receive from such commercial fishing operation 
     more than 50 percent of such individual's or such 
     individual's and spouse's gross income for the taxable year 
     preceding the taxable year in which the case concerning such 
     individual or such individual and spouse was filed; or
       ``(B) a corporation or partnership--
       ``(i) in which more than 50 percent of the outstanding 
     stock or equity is held by--

       ``(I) 1 family that conducts the commercial fishing 
     operation; or
       ``(II) 1 family and the relatives of the members of such 
     family, and such family or such relatives conduct the 
     commercial fishing operation; and

       ``(ii)(I) more than 80 percent of the value of its assets 
     consists of assets related to the commercial fishing 
     operation;
       ``(II) its aggregate debts do not exceed $1,500,000 and not 
     less than 80 percent of its aggregate noncontingent, 
     liquidated debts (excluding a debt for 1 dwelling which is 
     owned by such corporation or partnership and which a 
     shareholder or partner maintains as a principal residence, 
     unless such debt arises out of a commercial fishing 
     operation), on the date the case is filed, arise out of a 
     commercial fishing operation owned or operated by such 
     corporation or such partnership; and
       ``(III) if such corporation issues stock, such stock is not 
     publicly traded;
       ``(19B) `family fisherman with regular annual income' means 
     a family fisherman whose annual income is sufficiently stable 
     and regular to enable such family fisherman to make payments 
     under a plan under chapter 12 of this title;''.
       (b) Who May Be a Debtor.--Section 109(f) of title 11, 
     United States Code, is amended by inserting ``or family 
     fisherman'' after ``family farmer''.
       (c)  Chapter 12.--Chapter 12 of title 11, United States 
     Code, is amended--
       (1) in the chapter heading, by inserting ``OR FISHERMAN'' 
     after ``FAMILY FARMER'';
       (2) in section 1203, by inserting ``or commercial fishing 
     operation'' after ``farm''; and
       (3) in section 1206, by striking ``if the property is 
     farmland or farm equipment'' and inserting ``if the property 
     is farmland, farm equipment, or property used to carry out a 
     commercial fishing operation (including a commercial fishing 
     vessel)''.
       (d) Clerical Amendment.--In the table of chapters for title 
     11, United States Code, the item relating to chapter 12, is 
     amended to read as follows:

``12. Adjustments of Debts of a Family Farmer or Family Fisherman with 
    Regular Annual Income...................................1201''.....

       (e) Applicability.--Nothing in this section shall change, 
     affect, or amend the Fishery Conservation and Management Act 
     of 1976 (16 U.S.C. 1801 et seq.).

              TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

     SEC. 1101. DEFINITIONS.

       (a) Health Care Business Defined.--Section 101 of title 11, 
     United States Code, as amended by section 306, is amended--
       (1) by redesignating paragraph (27A) as paragraph (27B); 
     and
       (2) by inserting after paragraph (27) the following:
       ``(27A) `health care business'--
       ``(A) means any public or private entity (without regard to 
     whether that entity is organized for profit or not for 
     profit) that is primarily engaged in offering to the general 
     public facilities and services for--
       ``(i) the diagnosis or treatment of injury, deformity, or 
     disease; and
       ``(ii) surgical, drug treatment, psychiatric, or obstetric 
     care; and
       ``(B) includes--
       ``(i) any--

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

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

[[Page 605]]

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

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

     SEC. 1102. DISPOSAL OF PATIENT RECORDS.

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

     ``Sec. 351. Disposal of patient records

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

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

     SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING 
                   A HEALTH CARE BUSINESS AND OTHER ADMINISTRATIVE 
                   EXPENSES.

       Section 503(b) of title 11, United States Code, as amended 
     by section 445, is amended by adding at the end the 
     following:
       ``(8) the actual, necessary costs and expenses of closing a 
     health care business incurred by a trustee or by a Federal 
     agency (as defined in section 551(1) of title 5) or a 
     department or agency of a State or political subdivision 
     thereof, including any cost or expense incurred--
       ``(A) in disposing of patient records in accordance with 
     section 351; or
       ``(B) in connection with transferring patients from the 
     health care business that is in the process of being closed 
     to another health care business; and''.

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

       (a) Ombudsman To Act as Patient Advocate.--
       (1) Appointment of ombudsman.--Title 11, United States 
     Code, as amended by section 232, is amended by inserting 
     after section 332 the following:

     ``Sec. 333. Appointment of patient care ombudsman

       ``(a)(1) If the debtor in a case under chapter 7, 9, or 11 
     is a health care business, the court shall order, not later 
     than 30 days after the commencement of the case, the 
     appointment of an ombudsman to monitor the quality of patient 
     care and to represent the interests of the patients of the 
     health care business unless the court finds that the 
     appointment of such ombudsman is not necessary for the 
     protection of patients under the specific facts of the case.
       ``(2)(A) If the court orders the appointment of an 
     ombudsman under paragraph (1), the United States trustee 
     shall appoint 1 disinterested person (other than the United 
     States trustee) to serve as such ombudsman.
       ``(B) If the debtor is a health care business that provides 
     long-term care, then the United States trustee may appoint 
     the State Long-Term Care Ombudsman appointed under the Older 
     Americans Act of 1965 for the State in which the case is 
     pending to serve as the ombudsman required by paragraph (1).
       ``(C) If the United States trustee does not appoint a State 
     Long-Term Care Ombudsman under subparagraph (B), the court 
     shall notify the State Long-Term Care Ombudsman appointed 
     under the Older Americans Act of 1965 for the State in which 
     the case is pending, of the name and address of the person 
     who is appointed under subparagraph (A).
       ``(b) An ombudsman appointed under subsection (a) shall--
       ``(1) monitor the quality of patient care provided to 
     patients of the debtor, to the extent necessary under the 
     circumstances, including interviewing patients and 
     physicians;
       ``(2) not later than 60 days after the date of appointment, 
     and not less frequently than at 60-day intervals thereafter, 
     report to the court after notice to the parties in interest, 
     at a hearing or in writing, regarding the quality of patient 
     care provided to patients of the debtor; and
       ``(3) if such ombudsman determines that the quality of 
     patient care provided to patients of the debtor is declining 
     significantly or is otherwise being materially compromised, 
     file with the court a motion or a written report, with notice 
     to the parties in interest immediately upon making such 
     determination.
       ``(c)(1) An ombudsman appointed under subsection (a) shall 
     maintain any information obtained by such ombudsman under 
     this section that relates to patients (including information 
     relating to patient records) as confidential information. 
     Such ombudsman may not review confidential patient records 
     unless the court approves such review in advance and imposes 
     restrictions on such ombudsman to protect the confidentiality 
     of such records.
       ``(2) An ombudsman appointed under subsection (a)(2)(B) 
     shall have access to patient records consistent with 
     authority of such ombudsman under the Older Americans Act of 
     1965 and under non-Federal laws governing the State Long-Term 
     Care Ombudsman program.''.
       (2) Clerical amendment.--The table of sections for 
     subchapter II of chapter 3 of title 11, United States Code, 
     as amended by section 232, is amended by adding at the end 
     the following:

``333. Appointment of ombudsman.''.
       (b) Compensation of Ombudsman.--Section 330(a)(1) of title 
     11, United States Code, is amended--
       (1) in the matter preceding subparagraph (A), by inserting 
     ``an ombudsman appointed under section 333, or'' before ``a 
     professional person''; and
       (2) in subparagraph (A), by inserting ``ombudsman,'' before 
     ``professional person''.

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

       (a) In General.--Section 704(a) of title 11, United States 
     Code, as amended by sections 102, 219, and 446, is amended by 
     adding at the end the following:
       ``(12) use all reasonable and best efforts to transfer 
     patients from a health care business that is in the process 
     of being closed to an appropriate health care business that--
       ``(A) is in the vicinity of the health care business that 
     is closing;
       ``(B) provides the patient with services that are 
     substantially similar to those provided by the health care 
     business that is in the process of being closed; and
       ``(C) maintains a reasonable quality of care.''.
       (b) Conforming Amendment.--Section 1106(a)(1) of title 11, 
     United States Code, as amended by section 446, is amended by 
     striking ``and (11)'' and inserting ``(11), and (12)''.

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

       Section 362(b) of title 11, United States Code, is amended 
     by inserting after paragraph (27), as amended by sections 
     224, 303, 311, 401, 718, and 907, the following:
       ``(28) under subsection (a), of the exclusion by the 
     Secretary of Health and Human Services of the debtor from 
     participation in the medicare program or any other Federal 
     health care program (as defined in section 1128B(f) of the 
     Social Security Act pursuant to title XI or XVIII of such 
     Act).''.

                    TITLE XII--TECHNICAL AMENDMENTS

     SEC. 1201. DEFINITIONS.

       Section 101 of title 11, United States Code, as 
     hereinbefore 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;

[[Page 606]]

       (3) in paragraph (35)(B), by striking ``paragraphs (21B) 
     and (33)(A)'' and inserting ``paragraphs (23) and (35)'';
       (4) in each of paragraphs (35A), (38), and (54A), by 
     striking ``; and'' at the end and inserting a period;
       (5) in paragraph (51B)--
       (A) by inserting ``who is not a family farmer'' after 
     ``debtor'' the first place it appears; and
       (B) by striking ``thereto having aggregate'' and all that 
     follows through the end of the paragraph and inserting a 
     semicolon;
       (6) by striking paragraph (54) and inserting the following:
       ``(54) The term `transfer' means--
       ``(A) the creation of a lien;
       ``(B) the retention of title as a security interest;
       ``(C) the foreclosure of a debtor's equity of redemption; 
     or
       ``(D) each mode, direct or indirect, absolute or 
     conditional, voluntary or involuntary, of disposing of or 
     parting with--
       ``(i) property; or
       ``(ii) an interest in property;'';
       (7) by indenting the left margin of paragraph (54A) 2 ems 
     to the right; and
       (8) in each of paragraphs (1) through (35), in each of 
     paragraphs (36), (37), (38A), (38B) and (39A), and in each of 
     paragraphs (40) through (55), by striking the semicolon at 
     the end and inserting a period.

     SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

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

     SEC. 1203. EXTENSION OF TIME.

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

     SEC. 1204. TECHNICAL AMENDMENTS.

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

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

       Section 110(j)(4) of title 11, United States Code, as so 
     redesignated by section 221, is amended by striking 
     ``attorney's'' and inserting ``attorneys'''.

     SEC. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL 
                   PERSONS.

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

     SEC. 1207. EFFECT OF CONVERSION.

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

     SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

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

     SEC. 1209. EXCEPTIONS TO DISCHARGE.

       Section 523 of title 11, United States Code, as amended by 
     sections 215 and 314, is amended--
       (1) by transferring paragraph (15), as added by section 
     304(e) of Public Law 103-394 (108 Stat. 4133), so as to 
     insert such paragraph after subsection (a)(14A);
       (2) in subsection (a)(9), by striking ``motor vehicle'' and 
     inserting ``motor vehicle, vessel, or aircraft''; and
       (3) in subsection (e), by striking ``a insured'' and 
     inserting ``an insured''.

     SEC. 1210. EFFECT OF DISCHARGE.

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

     SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

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

     SEC. 1212. PROPERTY OF THE ESTATE.

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

     SEC. 1213. PREFERENCES.

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

     SEC. 1214. POSTPETITION TRANSACTIONS.

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

     SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.

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

     SEC. 1216. GENERAL PROVISIONS.

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

     SEC. 1217. ABANDONMENT OF RAILROAD LINE.

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

     SEC. 1218. CONTENTS OF PLAN.

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

     SEC. 1219. BANKRUPTCY CASES AND PROCEEDINGS.

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

     SEC. 1220. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.

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

     SEC. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE 
                   CORPORATIONS.

       (a) Sale of Property of Estate.--Section 363(d) of title 
     11, United States Code, is amended by striking ``only'' and 
     all that follows through the end of the subsection and 
     inserting ``only--
       ``(1) in accordance with applicable nonbankruptcy law that 
     governs the transfer of property by a corporation or trust 
     that is not a moneyed, business, or commercial corporation or 
     trust; and
       ``(2) to the extent not inconsistent with any relief 
     granted under subsection (c), (d), (e), or (f) of section 
     362.''.
       (b) Confirmation of Plan of Reorganization.--Section 
     1129(a) of title 11, United States Code, as amended by 
     sections 213 and 321, is amended by adding at the end the 
     following:
       ``(16) All transfers of property of the plan shall be made 
     in accordance with any applicable provisions of nonbankruptcy 
     law that govern the transfer of property by a corporation or 
     trust that is not a moneyed, business, or commercial 
     corporation or trust.''.
       (c) Transfer of Property.--Section 541 of title 11, United 
     States Code, as amended by section 225, is amended by adding 
     at the end the following:
       ``(f) Notwithstanding any other provision of this title, 
     property that is held by a debtor that is a corporation 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986 and exempt from tax under section 501(a) of such Code 
     may be transferred to an entity that is not such a 
     corporation, but only under the same conditions as would 
     apply if the debtor had not filed a case under this title.''.
       (d) Applicability.--The amendments made by this section 
     shall apply to a case pending under title 11, United States 
     Code, on the date of enactment of this Act, or filed under 
     that title on or after that date of enactment, except that 
     the court shall not confirm a plan under chapter 11 of title 
     11, United States Code, without considering whether this 
     section would substantially affect the rights of a party in 
     interest who first acquired rights with respect to the debtor 
     after the date of the filing of the petition. The parties who 
     may appear and be heard in a proceeding under this section 
     include the attorney general of the State in which the debtor 
     is incorporated, was formed, or does business.
       (e) Rule of Construction.--Nothing in this section shall be 
     construed to require the court in which a case under chapter 
     11 of title 11, United States Code, is pending to remand or 
     refer any proceeding, issue, or controversy to any other 
     court or to require the approval of any other court for the 
     transfer of property.

     SEC. 1222. PROTECTION OF VALID PURCHASE MONEY SECURITY 
                   INTERESTS.

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

     SEC. 1223. BANKRUPTCY JUDGESHIPS.

       (a) Short Title.--This section may be cited as the 
     ``Bankruptcy Judgeship Act of 2003''.
       (b) Temporary Judgeships.--
       (1) Appointments.--The following bankruptcy judges shall be 
     appointed in the manner prescribed in section 152(a)(1) of 
     title 28,

[[Page 607]]

     United States Code, for the appointment of bankruptcy judges 
     provided for in section 152(a)(2) of such title:
       (A) One additional bankruptcy judge for the eastern 
     district of California.
       (B) Three additional bankruptcy judges for the central 
     district of California.
       (C) Four additional bankruptcy judges for the district of 
     Delaware.
       (D) Two additional bankruptcy judges for the southern 
     district of Florida.
       (E) One additional bankruptcy judge for the southern 
     district of Georgia.
       (F) Three additional bankruptcy judges for the district of 
     Maryland.
       (G) One additional bankruptcy judge for the eastern 
     district of Michigan.
       (H) One additional bankruptcy judge for the southern 
     district of Mississippi.
       (I) One additional bankruptcy judge for the district of New 
     Jersey.
       (J) One additional bankruptcy judge for the eastern 
     district of New York.
       (K) One additional bankruptcy judge for the northern 
     district of New York.
       (L) One additional bankruptcy judge for the southern 
     district of New York.
       (M) One additional bankruptcy judge for the eastern 
     district of North Carolina.
       (N) One additional bankruptcy judge for the eastern 
     district of Pennsylvania.
       (O) One additional bankruptcy judge for the middle district 
     of Pennsylvania.
       (P) One additional bankruptcy judge for the district of 
     Puerto Rico.
       (Q) One additional bankruptcy judge for the western 
     district of Tennessee.
       (R) One additional bankruptcy judge for the eastern 
     district of Virginia.
       (S) One additional bankruptcy judge for the district of 
     South Carolina.
       (T) One additional bankruptcy judge for the district of 
     Nevada.
       (2) Vacancies.--
       (A) Districts with single appointments.--Except as provided 
     in subparagraphs (B), (C), (D), and (E), the first vacancy 
     occurring in the office of bankruptcy judge in each of the 
     judicial districts set forth in paragraph (1)--
       (i) occurring 5 years or more after the appointment date of 
     the bankruptcy judge appointed under paragraph (1) to such 
     office; and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (B) Central district of california.--The 1st, 2d, and 3d 
     vacancies in the office of bankruptcy judge in the central 
     district of California--
       (i) occurring 5 years or more after the respective 1st, 2d, 
     and 3d appointment dates of the bankruptcy judges appointed 
     under paragraph (1)(B); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (C) District of delaware.--The 1st, 2d, 3d, and 4th 
     vacancies in the office of bankruptcy judge in the district 
     of Delaware--
       (i) occurring 5 years or more after the respective 1st, 2d, 
     3d, and 4th appointment dates of the bankruptcy judges 
     appointed under paragraph (1)(F); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (D) Southern district of florida.--The 1st and 2d vacancies 
     in the office of bankruptcy judge in the southern district of 
     Florida--
       (i) occurring 5 years or more after the respective 1st and 
     2d appointment dates of the bankruptcy judges appointed under 
     paragraph (1)(D); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (E) District of maryland.--The 1st, 2d, and 3d vacancies in 
     the office of bankruptcy judge in the district of Maryland--
       (i) occurring 5 years or more after the respective 1st, 2d, 
     and 3d appointment dates of the bankruptcy judges appointed 
     under paragraph (1)(F); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (c) Extensions.--
       (1) In general.--The temporary office of bankruptcy judges 
     authorized for the northern district of Alabama, the district 
     of Delaware, the district of Puerto Rico, and the eastern 
     district of Tennessee under paragraphs (1), (3), (7), and (9) 
     of section 3(a) of the Bankruptcy Judgeship Act of 1992 (28 
     U.S.C. 152 note) are extended until the first vacancy 
     occurring in the office of a bankruptcy judge in the 
     applicable district resulting from the death, retirement, 
     resignation, or removal of a bankruptcy judge and occurring 5 
     years after the date of the enactment of this Act.
       (2) Applicability of other provisions.--All other 
     provisions of section 3 of the Bankruptcy Judgeship Act of 
     1992 (28 U.S.C. 152 note) remain applicable to the temporary 
     office of bankruptcy judges referred to in this subsection.
       (d) Technical Amendments.--Section 152(a) of title 28, 
     United States Code, is amended--
       (1) in paragraph (1), by striking the first sentence and 
     inserting the following: ``Each bankruptcy judge to be 
     appointed for a judicial district, as provided in paragraph 
     (2), shall be appointed by the court of appeals of the United 
     States for the circuit in which such district is located.''; 
     and
       (2) in paragraph (2)--
       (A) in the item relating to the middle district of Georgia, 
     by striking ``2'' and inserting ``3''; and
       (B) in the collective item relating to the middle and 
     southern districts of Georgia, by striking ``Middle and 
     Southern . . . . . . 1''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 1224. COMPENSATING TRUSTEES.

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

     SEC. 1225. AMENDMENT TO SECTION 362 OF TITLE 11, UNITED 
                   STATES CODE.

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

     SEC. 1226. JUDICIAL EDUCATION.

       The Director of the Federal Judicial Center, in 
     consultation with the Director of the Executive Office for 
     United States Trustees, shall develop materials and conduct 
     such training as may be useful to courts in implementing this 
     Act and the amendments made by this Act, including the 
     requirements relating to the means test under section 707(b), 
     and reaffirmation agreements under section 524, of title 11 
     of the United States Code, as amended by this Act.

     SEC. 1227. RECLAMATION.

       (a) Rights and Powers of the Trustee.--Section 546(c) of 
     title 11, United States Code, is amended to read as follows:
       ``(c)(1) Except as provided in subsection (d) of this 
     section and in section 507(c), and subject to the prior 
     rights of a holder of a security interest in such goods or 
     the proceeds thereof, the rights and powers of the trustee 
     under sections 544(a), 545, 547, and 549 are subject to the 
     right of a seller of goods that has sold goods to the debtor, 
     in the ordinary course of such seller's business, to reclaim 
     such goods if the debtor has received such goods while 
     insolvent, within 45 days before the date of the commencement 
     of a case under this title, but such seller may not reclaim 
     such goods unless such seller demands in writing reclamation 
     of such goods--
       ``(A) not later than 45 days after the date of receipt of 
     such goods by the debtor; or
       ``(B) not later than 20 days after the date of commencement 
     of the case, if the 45-day period expires after the 
     commencement of the case.
       ``(2) If a seller of goods fails to provide notice in the 
     manner described in paragraph (1), the seller still may 
     assert the rights contained in section 503(b)(9).''.
       (b) Administrative Expenses.--Section 503(b) of title 11, 
     United States Code, as amended by sections 445 and 1103, is 
     amended by adding at the end the following:
       ``(9) the value of any goods received by the debtor within 
     20 days before the date of commencement of a case under this 
     title in which the goods have been sold to the debtor in the 
     ordinary course of such debtor's business.''.

     SEC. 1228. PROVIDING REQUESTED TAX DOCUMENTS TO THE COURT.

       (a) Chapter 7 Cases.--The court shall not grant a discharge 
     in the case of an individual who is a debtor in a case under 
     chapter 7 of title 11, United States Code, unless requested 
     tax documents have been provided to the court.

[[Page 608]]

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

     SEC. 1229. ENCOURAGING CREDITWORTHINESS.

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

     SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMPTION.

       Section 541(b) of title 11, United States Code, as amended 
     by sections 225 and 323, is amended by adding after paragraph 
     (7), as added by section 323, the following:
       ``(8) subject to subchapter III of chapter 5, any interest 
     of the debtor in property where the debtor pledged or sold 
     tangible personal property (other than securities or written 
     or printed evidences of indebtedness or title) as collateral 
     for a loan or advance of money given by a person licensed 
     under law to make such loans or advances, where--
       ``(A) the tangible personal property is in the possession 
     of the pledgee or transferee;
       ``(B) the debtor has no obligation to repay the money, 
     redeem the collateral, or buy back the property at a 
     stipulated price; and
       ``(C) neither the debtor nor the trustee have exercised any 
     right to redeem provided under the contract or State law, in 
     a timely manner as provided under State law and section 
     108(b); or''.

     SEC. 1231. TRUSTEES.

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

     SEC. 1232. BANKRUPTCY FORMS.

       Section 2075 of title 28, United States Code, is amended by 
     adding at the end the following:
       ``The bankruptcy rules promulgated under this section shall 
     prescribe a form for the statement required under section 
     707(b)(2)(C) of title 11 and may provide general rules on the 
     content of such statement.''.

     SEC. 1233. DIRECT APPEALS OF BANKRUPTCY MATTERS TO COURTS OF 
                   APPEALS.

       (a) Appeals.--Section 158 of title 28, United States Code, 
     is amended--
       (1) in subsection (c)(1), by striking ``Subject to 
     subsection (b),'' and inserting ``Subject to subsections (b) 
     and (d)(2),''; and
       (2) in subsection (d)--
       (A) by inserting ``(1)'' after ``(d)''; and
       (B) by adding at the end the following:
       ``(2)(A) The appropriate court of appeals shall have 
     jurisdiction of appeals described in the first sentence of 
     subsection (a) if the bankruptcy court, the district court, 
     or the bankruptcy appellate panel involved, acting on its own 
     motion or on the request of a party to the judgment, order, 
     or decree described in such first sentence, or all the 
     appellants and appellees (if any) acting jointly, certify 
     that--
       ``(i) the judgment, order, or decree involves a question of 
     law as to which there is no controlling decision of the court 
     of appeals for the circuit or of the Supreme Court of the 
     United States, or involves a matter of public importance;
       ``(ii) the judgment, order, or decree involves a question 
     of law requiring resolution of conflicting decisions; or
       ``(iii) an immediate appeal from the judgment, order, or 
     decree may materially advance the progress of the case or 
     proceeding in which the appeal is taken;
     and if the court of appeals authorizes the direct appeal of 
     the judgment, order, or decree.
       ``(B) If the bankruptcy court, the district court, or the 
     bankruptcy appellate panel--
       ``(i) on its own motion or on the request of a party, 
     determines that a circumstance specified in clause (i), (ii), 
     or (iii) of subparagraph (A) exists; or
       ``(ii) receives a request made by a majority of the 
     appellants and a majority of appellees (if any) to make the 
     certification described in subparagraph (A);
     then the bankruptcy court, the district court, or the 
     bankruptcy appellate panel shall make the certification 
     described in subparagraph (A).
       ``(C) The parties may supplement the certification with a 
     short statement of the basis for the certification.
       ``(D) An appeal under this paragraph does not stay any 
     proceeding of the bankruptcy court, the district court, or 
     the bankruptcy appellate panel from which the appeal is 
     taken, unless the respective bankruptcy court, district 
     court, or bankruptcy appellate panel, or the court of appeals 
     in which the appeal in pending, issues a stay of such 
     proceeding pending the appeal.
       ``(E) Any request under subparagraph (B) for certification 
     shall be made not later than 60 days after the entry of the 
     judgment, order, or decree.''.
       (b) Procedural Rules.--
       (1) Temporary application.--A provision of this subsection 
     shall apply to appeals under section 158(d)(2) of title 28, 
     United States Code, until a rule of practice and procedure 
     relating to such provision and such appeals is promulgated or 
     amended under chapter 131 of such title.
       (2) Certification.--A district court, a bankruptcy court, 
     or a bankruptcy appellate panel may make a certification 
     under section 158(d)(2) of title 28, United States Code, only 
     with respect to matters pending in the respective bankruptcy 
     court, district court, or bankruptcy appellate panel.
       (3) Procedure.--Subject to any other provision of this 
     subsection, an appeal authorized by the court of appeals 
     under section 158(d)(2)(A) of title 28, United States Code, 
     shall be taken in the manner prescribed in subdivisions 
     (a)(1), (b), (c), and (d) of rule 5 of the Federal Rules of 
     Appellate Procedure. For purposes of subdivision (a)(1) of 
     rule 5--
       (A) a reference in such subdivision to a district court 
     shall be deemed to include a reference to a bankruptcy court 
     and a bankruptcy appellate panel, as appropriate; and
       (B) a reference in such subdivision to the parties 
     requesting permission to appeal to be served with the 
     petition shall be deemed to include a reference to the 
     parties to the judgment, order, or decree from which the 
     appeal is taken.
       (4) Filing of petition with attachment.--A petition 
     requesting permission to appeal, that is based on a 
     certification made under subparagraph (A) or (B) of section 
     158(d)(2) shall--
       (A) be filed with the circuit clerk not later than 10 days 
     after the certification is entered on the docket of the 
     bankruptcy court, the district court, or the bankruptcy 
     appellate panel from which the appeal is taken; and
       (B) have attached a copy of such certification.

[[Page 609]]

       (5) References in rule 5.--For purposes of rule 5 of the 
     Federal Rules of Appellate Procedure--
       (A) a reference in such rule to a district court shall be 
     deemed to include a reference to a bankruptcy court and to a 
     bankruptcy appellate panel; and
       (B) a reference in such rule to a district clerk shall be 
     deemed to include a reference to a clerk of a bankruptcy 
     court and to a clerk of a bankruptcy appellate panel.
       (6) Application of rules.--The Federal Rules of Appellate 
     Procedure shall apply in the courts of appeals with respect 
     to appeals authorized under section 158(d)(2)(A), to the 
     extent relevant and as if such appeals were taken from final 
     judgments, orders, or decrees of the district courts or 
     bankruptcy appellate panels exercising appellate jurisdiction 
     under subsection (a) or (b) of section 158 of title 28, 
     United States Code.

     SEC. 1234. INVOLUNTARY CASES.

       (a) Amendments.--Section 303 of title 11, United States 
     Code, is amended--
       (1) in subsection (b)(1), by--
       (A) inserting ``as to liability or amount'' after ``bona 
     fide dispute''; and
       (B) striking ``if such claims'' and inserting ``if such 
     noncontingent, undisputed claims''; and
       (2) in subsection (h)(1), by inserting ``as to liability or 
     amount'' before the semicolon at the end.
       (b) Effective Date; Application of Amendments.--This 
     section and the amendments made by this section shall take 
     effect on the date of the enactment of this Act and shall 
     apply with respect to cases commenced under title 11 of the 
     United States Code before, on, and after such date.

     SEC. 1235. FEDERAL ELECTION LAW FINES AND PENALTIES AS 
                   NONDISCHARGEABLE DEBT.

       Section 523(a) of title 11, United States Code, as amended 
     by section 314, is amended by inserting after paragraph (14A) 
     the following:
       ``(14B) incurred to pay fines or penalties imposed under 
     Federal election law;''.

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

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

       (a) Minimum Payment Disclosures.--Section 127(b) of the 
     Truth in Lending Act (15 U.S.C. 1637(b)) is amended by adding 
     at the end the following:
       ``(11)(A) In the case of an open end credit plan that 
     requires a minimum monthly payment of not more than 4 percent 
     of the balance on which finance charges are accruing, the 
     following statement, located on the front of the billing 
     statement, disclosed clearly and conspicuously: `Minimum 
     Payment Warning: Making only the minimum payment will 
     increase the interest you pay and the time it takes to repay 
     your balance. For example, making only the typical 2% minimum 
     monthly payment on a balance of $1,000 at an interest rate of 
     17% would take 88 months to repay the balance in full. For an 
     estimate of the time it would take to repay your balance, 
     making only minimum payments, call this toll-free number: 
     ______.' (the blank space to be filled in by the creditor).
       ``(B) In the case of an open end credit plan that requires 
     a minimum monthly payment of more than 4 percent of the 
     balance on which finance charges are accruing, the following 
     statement, in a prominent location on the front of the 
     billing statement, disclosed clearly and conspicuously: 
     `Minimum Payment Warning: Making only the required minimum 
     payment will increase the interest you pay and the time it 
     takes to repay your balance. Making a typical 5% minimum 
     monthly payment on a balance of $300 at an interest rate of 
     17% would take 24 months to repay the balance in full. For an 
     estimate of the time it would take to repay your balance, 
     making only minimum monthly payments, call this toll-free 
     number: ______.' (the blank space to be filled in by the 
     creditor).
       ``(C) Notwithstanding subparagraphs (A) and (B), in the 
     case of a creditor with respect to which compliance with this 
     title is enforced by the Federal Trade Commission, the 
     following statement, in a prominent location on the front of 
     the billing statement, disclosed clearly and conspicuously: 
     `Minimum Payment Warning: Making only the required minimum 
     payment will increase the interest you pay and the time it 
     takes to repay your balance. For example, making only the 
     typical 5% minimum monthly payment on a balance of $300 at an 
     interest rate of 17% would take 24 months to repay the 
     balance in full. For an estimate of the time it would take to 
     repay your balance, making only minimum monthly payments, 
     call the Federal Trade Commission at this toll-free number: 
     ______.' (the blank space to be filled in by the creditor). A 
     creditor who is subject to this subparagraph shall not be 
     subject to subparagraph (A) or (B).
       ``(D) Notwithstanding subparagraph (A), (B), or (C), in 
     complying with any such subparagraph, a creditor may 
     substitute an example based on an interest rate that is 
     greater than 17 percent. Any creditor that is subject to 
     subparagraph (B) may elect to provide the disclosure required 
     under subparagraph (A) in lieu of the disclosure required 
     under subparagraph (B).
       ``(E) The Board shall, by rule, periodically recalculate, 
     as necessary, the interest rate and repayment period under 
     subparagraphs (A), (B), and (C).
       ``(F)(i) The toll-free telephone number disclosed by a 
     creditor or the Federal Trade Commission under subparagraph 
     (A), (B), or (G), as appropriate, may be a toll-free 
     telephone number established and maintained by the creditor 
     or the Federal Trade Commission, as appropriate, or may be a 
     toll-free telephone number established and maintained by a 
     third party for use by the creditor or multiple creditors or 
     the Federal Trade Commission, as appropriate. The toll-free 
     telephone number may connect consumers to an automated device 
     through which consumers may obtain information described in 
     subparagraph (A), (B), or (C), by inputting information using 
     a touch-tone telephone or similar device, if consumers whose 
     telephones are not equipped to use such automated device are 
     provided the opportunity to be connected to an individual 
     from whom the information described in subparagraph (A), (B), 
     or (C), as applicable, may be obtained. A person that 
     receives a request for information described in subparagraph 
     (A), (B), or (C) from an obligor through the toll-free 
     telephone number disclosed under subparagraph (A), (B), or 
     (C), as applicable, shall disclose in response to such 
     request only the information set forth in the table 
     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 2003, a toll-free telephone number, or provide a toll-
     free telephone number established and maintained by a third 
     party, for use by creditors that are depository institutions 
     (as defined in section 3 of the Federal Deposit Insurance 
     Act), including a Federal credit union or State credit union 
     (as defined in section 101 of the Federal Credit Union Act), 
     with total assets not exceeding $250,000,000. The toll-free 
     telephone number may connect consumers to an automated device 
     through which consumers may obtain information described in 
     subparagraph (A) or (B), as applicable, by inputting 
     information using a touch-tone telephone or similar device, 
     if consumers whose telephones are not equipped to use such 
     automated device are provided the opportunity to be connected 
     to an individual from whom the information described in 
     subparagraph (A) or (B), as applicable, may be obtained. A 
     person that receives a request for information described in 
     subparagraph (A) or (B) from an obligor through the toll-free 
     telephone number disclosed under subparagraph (A) or (B), as 
     applicable, shall disclose in response to such request only 
     the information set forth in the table promulgated by the 
     Board under subparagraph (H)(i). The dollar amount contained 
     in this subclause shall be adjusted according to an indexing 
     mechanism established by the Board.
       ``(II) Not later than 6 months prior to the expiration of 
     the 24-month period referenced in subclause (I), the Board 
     shall submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives a report on the program 
     described in subclause (I).
       ``(G) The Federal Trade Commission shall establish and 
     maintain a toll-free number for the purpose of providing to 
     consumers the information required to be disclosed under 
     subparagraph (C).
       ``(H) The Board shall--
       ``(i) establish a detailed table illustrating the 
     approximate number of months that it would take to repay an 
     outstanding balance if a consumer pays only the required 
     minimum monthly payments and if no other advances are made, 
     which table shall clearly present standardized information to 
     be used to disclose the information required to be disclosed 
     under subparagraph (A), (B), or (C), as applicable;
       ``(ii) establish the table required under clause (i) by 
     assuming--
       ``(I) a significant number of different annual percentage 
     rates;
       ``(II) a significant number of different account balances;
       ``(III) a significant number of different minimum payment 
     amounts; and
       ``(IV) that only minimum monthly payments are made and no 
     additional extensions of credit are obtained; and
       ``(iii) promulgate regulations that provide instructional 
     guidance regarding the manner in which the information 
     contained in the table established under clause (i) should be 
     used in responding to the request of an obligor for any 
     information required to be disclosed under subparagraph (A), 
     (B), or (C).
       ``(I) The disclosure requirements of this paragraph do not 
     apply to any charge card account, the primary purpose of 
     which is to require payment of charges in full each month.
       ``(J) A creditor that maintains a toll-free telephone 
     number for the purpose of providing customers with the actual 
     number of months that it will take to repay the customer's 
     outstanding balance is not subject to the requirements of 
     subparagraph (A) or (B).
       ``(K) A creditor that maintains a toll-free telephone 
     number for the purpose of providing customers with the actual 
     number of

[[Page 610]]

     months that it will take to repay an outstanding balance 
     shall include the following statement on each billing 
     statement: `Making only the minimum payment will increase the 
     interest you pay and the time it takes to repay your balance. 
     For more information, call this toll-free number: ____.' (the 
     blank space to be filled in by the creditor).''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board of Governors of the Federal 
     Reserve System (hereafter in this title referred to as the 
     ``Board'') shall promulgate regulations implementing the 
     requirements of section 127(b)(11) of the Truth in Lending 
     Act, as added by subsection (a) of this section.
       (2) Effective date.--Section 127(b)(11) of the Truth in 
     Lending Act, as added by subsection (a) of this section, and 
     the regulations issued under paragraph (1) of this subsection 
     shall not take effect until the later of--
       (A) 18 months after the date of enactment of this Act; or
       (B) 12 months after the publication of such final 
     regulations by the Board.
       (c) Study of Financial Disclosures.--
       (1) In general.--The Board may conduct a study to determine 
     the types of information available to potential borrowers 
     from consumer credit lending institutions regarding factors 
     qualifying potential borrowers for credit, repayment 
     requirements, and the consequences of default.
       (2) Factors for consideration.--In conducting a study under 
     paragraph (1), the Board should, in consultation with the 
     other Federal banking agencies (as defined in section 3 of 
     the Federal Deposit Insurance Act), the National Credit Union 
     Administration, and the Federal Trade Commission, consider 
     the extent to which--
       (A) consumers, in establishing new credit arrangements, are 
     aware of their existing payment obligations, the need to 
     consider those obligations in deciding to take on new credit, 
     and how taking on excessive credit can result in financial 
     difficulty;
       (B) minimum periodic payment features offered in connection 
     with open end credit plans impact consumer default rates;
       (C) consumers make only the required minimum payment under 
     open end credit plans;
       (D) consumers are aware that making only required minimum 
     payments will increase the cost and repayment period of an 
     open end credit obligation; and
       (E) the availability of low minimum payment options is a 
     cause of consumers experiencing financial difficulty.
       (3) Report to congress.--Findings of the Board in 
     connection with any study conducted under this subsection 
     shall be submitted to Congress. Such report shall also 
     include recommendations for legislative initiatives, if any, 
     of the Board, based on its findings.

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

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

[[Page 611]]

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

     SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.

       (a) Internet-Based Solicitations.--Section 127(c) of the 
     Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding 
     at the end the following:
       ``(7) Internet-based solicitations.--
       ``(A) In general.--In any solicitation to open a credit 
     card account for any person under an open end consumer credit 
     plan using the Internet or other interactive computer 
     service, the person making the solicitation shall clearly and 
     conspicuously disclose--
       ``(i) the information described in subparagraphs (A) and 
     (B) of paragraph (1); and
       ``(ii) the information described in paragraph (6).
       ``(B) Form of disclosure.--The disclosures required by 
     subparagraph (A) shall be--
       ``(i) readily accessible to consumers in close proximity to 
     the solicitation to open a credit card account; and
       ``(ii) updated regularly to reflect the current policies, 
     terms, and fee amounts applicable to the credit card account.
       ``(C) Definitions.--For purposes of this paragraph--
       ``(i) the term `Internet' means the international computer 
     network of both Federal and non-Federal interoperable packet 
     switched data networks; and
       ``(ii) the term `interactive computer service' means any 
     information service, system, or access software provider that 
     provides or enables computer access by multiple users to a 
     computer server, including specifically a service or system 
     that provides access to the Internet and such systems 
     operated or services offered by libraries or educational 
     institutions.''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board shall promulgate regulations 
     implementing the requirements of section 127(c)(7) of the 
     Truth in Lending Act, as added by this section.
       (2) Effective date.--The amendment made by subsection (a) 
     and the regulations issued under paragraph (1) of this 
     subsection shall not take effect until the later of--
       (A) 12 months after the date of enactment of this Act; or
       (B) 12 months after the date of publication of such final 
     regulations by the Board.

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

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

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

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

     SEC. 1307. DUAL USE DEBIT CARD.

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

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

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

     SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS.

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

      TITLE XIV--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.--
       (1) In general.--Except as otherwise provided in this Act 
     and paragraph (2), the amendments made by this Act shall not 
     apply with respect to cases commenced under title 11, United 
     States Code, before the effective date of this Act.

[[Page 612]]

       (2) Certain limitations applicable to debtors.--The 
     amendments made by sections 308, 322, and 330 shall apply 
     with respect to cases commenced under title 11, United States 
     Code, on or after the date of the enactment of this Act.

            TITLE XV--PREVENTING CORPORATE BANKRUPTCY ABUSE

     SEC. 1501. EMPLOYEE WAGE AND BENEFIT PRIORITIES.

       Section 507(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (3) by striking ``90'' and inserting 
     ``180'', and
       (2) in paragraphs (3) and (4) by striking ``$4,000'' and 
     inserting ``$10,000''.

     SEC. 1502. FRAUDULENT TRANSFERS AND OBLIGATIONS.

       Section 548 of title 11, United States Code, is amended--
       (1) in subsections (a) and (b) by striking ``one year'' and 
     inserting ``2 years'',
       (2) in subsection (a)--
       (A) by inserting ``(including any transfer to or for the 
     benefit of an insider under an employment contract)'' after 
     ``transfer'' the 1st place it appears, and
       (B) by inserting ``(including any obligation to or for the 
     benefit of an insider under an employment contract)'' after 
     ``obligation'' the 1st place it appears, and
       (3) in subsection (a)(1)(B)(ii)--
       (A) in subclause (II) by striking ``or'' at the end,
       (B) in subclause (III) by striking the period at the end 
     and inserting ``; or'', and
       (C) by adding at the end the following:
       ``(IV) made such transfer to or for the benefit of an 
     insider, or incurred such obligation to or for the benefit of 
     an insider, under an employment contract and not in the 
     ordinary course of business.''.

     SEC. 1503. PAYMENT OF INSURANCE BENEFITS TO RETIRED 
                   EMPLOYEES.

       Section 1114 of title 11, United States Code, is amended--
       (1) by redesignating subsection (l) as subsection (m), and
       (2) by inserting after subsection (k) the following:
       ``(l) If the debtor, during the 180-day period ending on 
     the date of the filing of the petition--
       ``(1) modified retiree benefits; and
       ``(2) was insolvent on the date such benefits were 
     modified;
     the court, on motion of a party in interest, and after notice 
     and a hearing, shall issue an order reinstating as of the 
     date the modification was made, such benefits as in effect 
     immediately before such date unless the court finds that the 
     balance of the equities clearly favors such modification.''.

     SEC. 1504. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as provided in subsection (b), 
     this Act and the amendments made by this Act shall take 
     effect on the date of the enactment of this Act.
       (b) Application of Amendments.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this Act shall apply only with respect to 
     cases commenced under title 11 of the United States Code on 
     or after the date of the enactment of this Act.
       (2) Avoidance period.--The amendment made by section 3(1) 
     shall apply only with respect to cases commenced under title 
     11 of the United States Code more than 1 year after the date 
     of the enactment of this Act.

  The CHAIRMAN. No amendments to the amendment in the nature of a 
substitute are in order except the amendments printed in House Report 
108-407. Each amendment may be offered only in the order printed in the 
report, by a Member designated in the report, shall be considered read, 
shall be 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 108-407.


              Amendment No. 1 Offered by Mr. Sensenbrenner

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

       Amendment No. 1 offered by Mr. Sensenbrenner:
       Strike ``Bankruptcy Abuse Prevention and Consumer 
     Protection Act of 2003'' each place it appears and insert 
     ``Bankruptcy Abuse Prevention and Consumer Protection Act of 
     2004''.
       In section 204 strike ``2002'' and insert ``2003''.
       Strike section 1001 and insert the following:

     SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--
       (1) In general.--Chapter 12 of title 11, United States 
     Code, as reenacted by section 149 of division C of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999 (Public Law 105-277), and as in 
     effect on December 31, 2003, is hereby reenacted.
       (2) Effective date of reenactment.--Paragraph (1) shall 
     take effect on January 1, 2004.
       (b) Amendments--Chapter 12 of title 11, United States Code, 
     as reenacted by subsection (a), is amended by this Act.
       (c) Conforming Amendment.--Section 302 of the Bankruptcy 
     Judges, United States Trustees, and Family Farmer Bankruptcy 
     Act of 1986 (28 U.S.C. 581 note) is amended by striking 
     subsection (f).
       In section 1201--
       (1) strike paragraph (2) and insert the following:

       (2) in each paragraph (other than paragraph (54A)), by 
     inserting ``The term'' after the paragraph designation;

     and
       (2) strike paragraph (7) and insert the following:
       (7) in paragraph (54A)--
       (A) by striking ``the term'' and inserting ``The term''; 
     and
       (B) by indenting the left margin of paragraph (54A) 2 ems 
     to the right; and
       Strike titles XIV and XV, and insert the following:

            TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE

     SEC. 1401. EMPLOYEE WAGE AND BENEFIT PRIORITIES.

       Section 507(a) of title 11, United States Code, as amended 
     by section 212, is amended--
       (1) in paragraph (4) by striking ``90'' and inserting 
     ``180'', and
       (2) in paragraphs (4) and (5) by striking ``$4,000'' and 
     inserting ``$10,000''.

     SEC. 1402. FRAUDULENT TRANSFERS AND OBLIGATIONS.

       Section 548 of title 11, United States Code, is amended--
       (1) in subsections (a) and (b) by striking ``one year'' and 
     inserting ``2 years'',
       (2) in subsection (a)--
       (A) by inserting ``(including any transfer to or for the 
     benefit of an insider under an employment contract)'' after 
     ``transfer'' the 1st place it appears, and
       (B) by inserting ``(including any obligation to or for the 
     benefit of an insider under an employment contract)'' after 
     ``obligation'' the 1st place it appears, and
       (3) in subsection (a)(1)(B)(ii)--
       (A) in subclause (II) by striking ``or'' at the end,
       (B) in subclause (III) by striking the period at the end 
     and inserting ``; or'', and
       (C) by adding at the end the following:
       ``(IV) made such transfer to or for the benefit of an 
     insider, or incurred such obligation to or for the benefit of 
     an insider, under an employment contract and not in the 
     ordinary course of business.''.

     SEC. 1403. PAYMENT OF INSURANCE BENEFITS TO RETIRED 
                   EMPLOYEES.

       Section 1114 of title 11, United States Code, is amended--
       (1) by redesignating subsection (l) as subsection (m), and
       (2) by inserting after subsection (k) the following:
       ``(l) If the debtor, during the 180-day period ending on 
     the date of the filing of the petition--
       ``(1) modified retiree benefits; and
       ``(2) was insolvent on the date such benefits were 
     modified;

     the court, on motion of a party in interest, and after notice 
     and a hearing, shall issue an order reinstating as of the 
     date the modification was made, such benefits as in effect 
     immediately before such date unless the court finds that the 
     balance of the equities clearly favors such modification.''.

     SEC. 1404. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as provided in subsection (b), 
     this title and the amendments made by this title shall take 
     effect on the date of the enactment of this Act.
       (b) Application of Amendments.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this title shall apply only with respect 
     to cases commenced under title 11 of the United States Code 
     on or after the date of the enactment of this Act.
       (2) Avoidance period.--The amendment made by section 
     1402(1) shall apply only with respect to cases commenced 
     under title 11 of the United States Code more than 1 year 
     after the date of the enactment of this Act.

      TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

     SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as otherwise provided in this 
     Act, this Act and the amendments made by this Act shall take 
     effect 180 days after the date of enactment of this Act.
       (b) Application of Amendments.--
       (1) In general.--Except as otherwise provided in this Act 
     and paragraph (2), the amendments made by this Act shall not 
     apply with respect to cases commenced under title 11, United 
     States Code, before the effective date of this Act.

[[Page 613]]

       (2) Certain limitations applicable to debtors.--The 
     amendments made by sections 308, 322, and 330 shall apply 
     with respect to cases commenced under title 11, United States 
     Code, on or after the date of the enactment of this Act.

     SEC. 1502. TECHNICAL CORRECTIONS.

       (a) Conforming Amendments to Title 11 of the United States 
     Code.--Title 11 of the United States Code, as amended by the 
     preceding provisions of this Act, is amended--
       (1) in section 507--
       (A) in subsection (a)--
       (i) in paragraph (5)(B)(ii) by striking ``paragraph (3)'' 
     and inserting ``paragraph (4)''; and
       (ii) in paragraph (8)(D) by striking ``paragraph (3)'' and 
     inserting ``paragraph (4)'';
       (B) in subsection (b) by striking ``subsection (a)(1)'' and 
     inserting ``subsection (a)(2)''; and
       (C) in subsection (d) by striking ``subsection (a)(3)'' and 
     inserting ``subsection (a)(1)'';
       (2) in section 523(a)(1)(A) by striking ``507(a)(2)'' and 
     inserting ``507(a)(3)'';
       (3) in section 752(a) by striking ``507(a)(1)'' and 
     inserting ``507(a)(2)'';
       (4) in section 766--
       (A) in subsection (h) by striking ``507(a)(1)'' and 
     inserting ``507(a)(2)''; and
       (B) in subsection (i) by striking ``507(a)(1)'' each place 
     it appears and inserting ``507(a)(2)'';
       (5) in section 901(a) by striking ``507(a)(1)'' and 
     inserting ``507(a)(2)'';
       (6) in section 943(b)(5) by striking ``507(a)(1)'' and 
     inserting ``507(a)(2)'';
       (7) in section 1123(a)(1) by striking ``507(a)(1), 
     507(a)(2)'' and inserting ``507(a)(2), 507(a)(3)'';
       (8) in section 1129(a)(9)--
       (A) in subparagraph (A) by striking ``507(a)(1) or 
     507(a)(2)'' and inserting ``507(a)(2) or 507(a)(3)''; and
       (B) in subparagraph (B) by striking ``507(a)(3)'' and 
     inserting ``507(a)(1)'';
       (9) in section 1226(b)(1) by striking ``507(a)(1)'' and 
     inserting ``507(a)(2)''; and
       (10) in section 1326(b)(1) by striking ``507(a)(1)'' and 
     inserting ``507(a)(2)''.
       (b) Related Conforming Amendment.--Section 6(e) of the 
     Securities Investor Protection Act of 1970 (15 U.S.C. 
     78fff(e)) is amended by striking ``507(a)(1)'' and inserting 
     ``507(a)(2)''.
       In the table of contents strike the items relating to 
     titles XIV and XV, and insert the following items:

            TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE

Sec. 1401. Employee wage and benefit priorities.
Sec. 1402. Fraudulent transfers and obligations.
Sec. 1403. Payment of insurance benefits to retired employees.
Sec. 1404. Effective date; application of amendments.

      TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1501. Effective date; application of amendments.
Sec. 1502. Technical corrections.


  The CHAIRMAN. Pursuant to House Resolution 503, the gentleman from 
Wisconsin (Mr. Sensenbrenner) and a Member opposed 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 very straightforward. It simply makes 
several minor corrections to the text of H.R. 975 that was passed by 
the House, which according to the rule has been substituted as the text 
of Senate 1920.
  The technical revisions consist of the following:
  The short title of the bill is revised to reflect the current year. 
Section 1001 of the bill is amended to clarify that the reenactment of 
Chapter 12 is made retroactively; this ensures that cases filed by 
family farmers during the lapsed period can simply be converted to 
Chapter 12 once it is reenacted. Titles XIV and XV of the bill are 
renumbered as titles XV and XIV, respectively, to clarify the bill's 
overall effective date. An erroneous drafting instruction in section 
1201 of the bill is corrected. And a new provision is added to correct 
statutory cross-references in current law.
  This is technical and noncontroversial, and I urge my colleagues to 
support the amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. WATT. Mr. Chairman, I claim the time in opposition to the 
amendment, and I yield myself such time as I may consume.
  Mr. Chairman, I rise solely to advise that we have had no indication 
from our side that there is anybody who opposes these technical 
amendments and we, therefore, concur in the amendments.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Wisconsin (Mr. Sensenbrenner).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider Amendment No. 2 printed 
in House Report 108-407.


  Amendment In The Nature Of A Substitute No. 2 Offered by Ms. Baldwin

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

       Amendment in the nature of a substitute No. 2 offered by 
     Ms. Baldwin:
       Strike all after the enacting clause and insert the 
     following:
       

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Protection of Family Farmers 
     and Family Fishermen Act of 2004''.

     SEC. 2. PERMANENT REENACTMENT OF CHAPTER 12.

       (a) Permanent Reenactment.--
       (1) Reenactment.--Chapter 12 of title 11, United States 
     Code, as reenacted by section 149 of division C of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999 (Public Law 105-277), and as in 
     effect on December 31, 2003, is hereby reenacted.
       (2) 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).
       (b) Effective Date of Reenactment.--Subsection (a) shall 
     take effect on January 1, 2004.

     SEC. 3. DEBT LIMIT INCREASE.

       Section 104(b) of title 11, United States Code, as amended 
     by section 226, is amended by inserting ``101(18),'' after 
     ``101(3),'' each place it appears.

     SEC. 4. 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 section 719, is 
     amended by striking ``a State or local governmental unit'' 
     and inserting ``any governmental unit''.
       (c) Effective Date; Application of Amendments.--This 
     section and the amendments made by this section shall take 
     effect on the date of the enactment of this Act and shall not 
     apply with respect to cases commenced under title 11 of the 
     United States Code before such date.

     SEC. 5. DEFINITION OF FAMILY FARMER.

       Section 101(18) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (A)--
       (A) by striking ``$1,500,000'' and inserting 
     ``$3,237,000''; and
       (B) by striking ``80'' and inserting ``50''; and
       (2) in subparagraph (B)(ii)--
       (A) by striking ``$1,500,000'' and inserting 
     ``$3,237,000''; and
       (B) by striking ``80'' and inserting ``50''.

     SEC. 6. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND 
                   SPOUSE RECEIVE OVER 50 PERCENT OF INCOME FROM 
                   FARMING OPERATION IN YEAR PRIOR TO BANKRUPTCY.

       Section 101(18)(A) of title 11, United States Code, is 
     amended by striking ``for the taxable year preceding the 
     taxable year'' and inserting the following:
     ``for--
       ``(i) the taxable year preceding; or
       ``(ii) each of the 2d and 3d taxable years preceding;

     the taxable year''.

     SEC. 7. PROHIBITION OF RETROACTIVE ASSESSMENT OF DISPOSABLE 
                   INCOME.

       (a) Confirmation of Plan.--Section 1225(b)(1) of title 11, 
     United States Code, is amended--
       (1) in subparagraph (A) by striking ``or'' at the end;

[[Page 614]]

       (2) in subparagraph (B) by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the value of the property to be distributed under the 
     plan in the 3-year period, or such longer period as the court 
     may approve under section 1222(c), beginning on the date that 
     the first distribution is due under the plan is not less than 
     the debtor's projected disposable income for such period.''.
       (b) Modification of Plan.--Section 1229 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(d) A plan may not be modified under this section--
       ``(1) to increase the amount of any payment due before the 
     plan as modified becomes the plan;
       ``(2) by anyone except the debtor, based on an increase in 
     the debtor's disposable income, to increase the amount of 
     payments to unsecured creditors required for a particular 
     month so that the aggregate of such payments exceeds the 
     debtor's disposable income for such month; or
       ``(3) in the last year of the plan by anyone except the 
     debtor, to require payments that would leave the debtor with 
     insufficient funds to carry on the farming operation after 
     the plan is completed.''.

     SEC. 8. FAMILY FISHERMEN.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (7) the following:
       ``(7A) `commercial fishing operation' means--
       ``(A) the catching or harvesting of fish, shrimp, lobsters, 
     urchins, seaweed, shellfish, or other aquatic species or 
     products of such species; or
       ``(B) for purposes of section 109 and chapter 12, 
     aquaculture activities consisting of raising for market any 
     species or product described in subparagraph (A);
       ``(7B) `commercial fishing vessel' means a vessel used by a 
     family fisherman to carry out a commercial fishing 
     operation;''; and
       (2) by inserting after paragraph (19) the following:
       ``(19A) `family fisherman' means--
       ``(A) an individual or individual and spouse engaged in a 
     commercial fishing operation--
       ``(i) whose aggregate debts do not exceed $1,500,000 and 
     not less than 80 percent of whose aggregate noncontingent, 
     liquidated debts (excluding a debt for the principal 
     residence of such individual or such individual and spouse, 
     unless such debt arises out of a commercial fishing 
     operation), on the date the case is filed, arise out of a 
     commercial fishing operation owned or operated by such 
     individual or such individual and spouse; and
       ``(ii) who receive from such commercial fishing operation 
     more than 50 percent of such individual's or such 
     individual's and spouse's gross income for the taxable year 
     preceding the taxable year in which the case concerning such 
     individual or such individual and spouse was filed; or
       ``(B) a corporation or partnership--
       ``(i) in which more than 50 percent of the outstanding 
     stock or equity is held by--

       ``(I) 1 family that conducts the commercial fishing 
     operation; or
       ``(II) 1 family and the relatives of the members of such 
     family, and such family or such relatives conduct the 
     commercial fishing operation; and

       ``(ii)(I) more than 80 percent of the value of its assets 
     consists of assets related to the commercial fishing 
     operation;
       ``(II) its aggregate debts do not exceed $1,500,000 and not 
     less than 80 percent of its aggregate noncontingent, 
     liquidated debts (excluding a debt for 1 dwelling which is 
     owned by such corporation or partnership and which a 
     shareholder or partner maintains as a principal residence, 
     unless such debt arises out of a commercial fishing 
     operation), on the date the case is filed, arise out of a 
     commercial fishing operation owned or operated by such 
     corporation or such partnership; and
       ``(III) if such corporation issues stock, such stock is not 
     publicly traded;
       ``(19B) `family fisherman with regular annual income' means 
     a family fisherman whose annual income is sufficiently stable 
     and regular to enable such family fisherman to make payments 
     under a plan under chapter 12 of this title;''.
       (b) Who May Be a Debtor.--Section 109(f) of title 11, 
     United States Code, is amended by inserting ``or family 
     fisherman'' after ``family farmer''.
       (c)  Chapter 12.--Chapter 12 of title 11, United States 
     Code, is amended--
       (1) in the chapter heading, by inserting ``OR FISHERMAN'' 
     after ``FAMILY FARMER'';
       (2) in section 1203, by inserting ``or commercial fishing 
     operation'' after ``farm''; and
       (3) in section 1206, by striking ``if the property is 
     farmland or farm equipment'' and inserting ``if the property 
     is farmland, farm equipment, or property used to carry out a 
     commercial fishing operation (including a commercial fishing 
     vessel)''.
       (d) Clerical Amendment.--In the table of chapters for title 
     11, United States Code, the item relating to chapter 12, is 
     amended to read as follows:

``12. Adjustments of Debts of a Family Farmer or Family Fisherman with 
    Regular Annual Income...................................1201''.....

       (e) Applicability.--Nothing in this section shall change, 
     affect, or amend the Fishery Conservation and Management Act 
     of 1976 (16 U.S.C. 1801, et seq.).

  The CHAIRMAN. Pursuant to House Resolution 503, the gentlewoman from 
Wisconsin (Ms. Baldwin) and the gentleman from Wisconsin (Mr. 
Sensenbrenner) each will control 30 minutes.
  The gentlewoman from Wisconsin (Ms. Baldwin) is recognized for 30 
minutes.
  Ms. BALDWIN. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, as you know, Chapter 12 family farmers bankruptcy 
protection is an effective and noncontroversial part of our Nation's 
Bankruptcy Code. Since its creation in 1986, it has allowed our 
Nation's family farmers who face economic hardship a greater 
opportunity to reorganize their debts and continue in farming.
  As with many laws that we pass, the benefits of the direct impact, 
which can be easily measured, are often exceeded by the indirect 
benefits. Chapter 12 does not just benefit those using its protections. 
Many farmers who face the possibility of a bankruptcy never get to the 
point of a court filing. Bankruptcy trustees and bankruptcy attorneys 
are quick to point out that the very existence of the option of Chapter 
12 filing promotes negotiations between farmers and their creditors, 
thus preventing bankruptcy filings altogether.
  Chapter 12 protection is currently unavailable to our Nation's 
farmers. It expired on December 31, 2003. The House should have taken 
up the 6-month extension bill, Senate bill 1920, passed without 
amendment, and sent it to the President immediately. However, by 
approving the rule earlier today, we have foreclosed that option; 
therefore, I am offering this substitute amendment.
  Mr. Chairman, my amendment provides the House with a clear policy 
choice by allowing a vote on passing a permanent Chapter 12 
authorization instead of continuing to keep it tied to the 
controversial larger bankruptcy bill. My amendment simply uses the 
Chapter 12 language that was agreed to by bipartisan, bicameral 
conferees during the 107th Congress. It is the same as the bipartisan 
bill, Senate bill 2004, introduced by Members of the other body.
  The amendment does the following: It makes Chapter 12 farm bankruptcy 
protections a permanent part of our Bankruptcy Code; it would increase 
the debt limits that a family farm can hold to qualify for Chapter 12 
from $1.5 million to $3.2 million; and it would index those debt limits 
to the consumer price index. It would reduce from 80 percent to 50 
percent the percentage of family farm liabilities that are due to 
farming operations; it would look at the previous 3 years, instead of 
only the previous year when determining whether 50 percent of income is 
from farming operations; and it would expand this type of bankruptcy 
protection to family fishermen.
  These changes to Chapter 12 are not controversial and enjoy 
widespread bipartisan support.
  Since I was first elected to Congress 5 years ago, we have passed 
eight, eight temporary extensions to Chapter 12. It is time to end this 
repetitive cycle of extensions and extensions. Our struggling family 
farmers should not be used as leverage. They should not have to 
continue to wait while we play games with Chapter 12 protections. This 
bill provides a textbook example that what we do here in Washington 
directly affects the lives of people facing real financial challenges.
  In Wisconsin recently, a farmer from Columbus filed for Chapter 12 
bankruptcy. He works day and night to make his farm a success. 
Unfortunately, like many farmers, the weather and the market conspired 
to disrupt his cash flow. Filing Chapter 12 bankruptcy gave his family 
time to negotiate with his creditors while he switched production from 
corn and soybeans to vegetables, which he now sells in local markets. 
He sells his produce in farmers markets in Madison and in Princeton, 
Wisconsin, and he is paying his debts.
  Under Chapter 12, it was not only the Columbus farmer that benefited, 
his

[[Page 615]]

family and his creditors now are receiving their money. The people in 
my district can purchase his bounty, and he can continue to support his 
farm, his family and his obligations.
  Every time we come to the floor to extend Chapter 12, we are told 
that a permanent extension cannot be passed separately from the big 
bill because taking out this terribly popular item would slow the 
bill's momentum. We were told that we had to strip the permanent 
extension of Chapter 12 from last year's farm bill because it would 
slow down the progress of the bankruptcy bill. We were told in June 
when we extended Chapter 12 again that we had to wait. Our farmers have 
been waiting for more than 5 years, and it is time to get this done.
  Let us end the uncertainty these extensions cause by passing a 
permanent authorization. That is what my amendment would do. I sort of 
feel like I am in the middle of the movie ``Groundhog Day.'' Every 6 
months we go through a process of extending Chapter 12 extensions 
again. Every session of Congress we go through a drawn-out debate 
regarding a larger overhaul of our bankruptcy laws. My amendment would 
break us out of that cycle.
  It is time to stop using our farmers as pawns to push for bankruptcy 
reform and it is time to restore this important protection. We should 
not be playing politics with the livelihood of our farmers by putting 
the special interests who want the bankruptcy overhaul ahead of the 
real needs of struggling family farmers.
  I urge my colleagues to pass the Baldwin substitute amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, with all due respect to my colleague from Wisconsin 
(Ms. Baldwin), she had an opportunity to advance the bankruptcy bill on 
November 14, 2002, but voted against the rule to bring up the 
conference report that contained the compromise language relative to 
the abortion clinic protestors judgment discharge, and that vote was 
rejected, 172 to 243. Had that rule passed, obviously the conference 
report would have passed, the President would have signed the bill at 
the end of 2002, and we would not be here talking about any of these 
issues here today.
  But I rise in opposition to this amendment because as we begin this 
debate, I want to make it perfectly clear that by opposing this 
amendment we are not in any respect jeopardizing the financial well-
being of family farmers, or as proponents of this amendment have tried 
to construe the issue, holding farmers hostage. Nothing could be 
further from the truth.
  The reality is that Senate 1920, as it will be voted on today, 
already accomplishes everything this amendment does and, indeed, much 
more. Since its enactment, Chapter 12 has lapsed on six occasions. The 
shortest lapse periods was 20 days; the longest was approximately 10 
months. As with prior measures reenacting Chapter 12, the bill before 
us is retroactive, which will protect family farmers.
  Mr. Chairman, you should know that the amendments simply extract one 
series of reforms from pending bankruptcy legislation. But what 
opponents of the amendment fail to include, however, are literally 
hundreds of other reforms in Senate 1920 that would benefit farmers in 
many other ways and nearly all Americans as well.
  Although my colleague on the other side of the aisle essentially 
asserts that farmers are being held hostage to bankruptcy reform, the 
reality is that bankruptcy reform is being held hostage. Just look at 
the roll calls and who voted which way in the eight or nine votes that 
the House has had since 1998.
  Here are just a small sample of the reforms being held up by 
opponents of overall reforms: First, reforms giving the Justice 
Department and the courts the tools they need to deal with fraud and 
abuse in the current bankruptcy system. Voting for this amendment and 
against the bill means that the Justice Department and the courts will 
not have those tools to deal with fraud and abuse.
  Second, remedies addressing the so-called ``mansion loophole'' by 
which corporate criminals and other wrongdoers can shield their million 
dollar homes from the just claims of their creditors. And that includes 
employees of major corporations that had their 401(k)s looted as a 
result of stock prices tanking and they could not diversify what was in 
the 401(k)s.
  So try telling that to an Enron or WorldCom employee that we are 
going to allow future corporate wrongdoers to be able to stiff their 
employees as well. The amendment offered by the gentlewoman from 
Wisconsin (Ms. Baldwin) would allow that to happen. The base bill does 
not.
  Third, reforms representing deadbeat parents from using bankruptcy as 
a means of avoiding their child support obligation. This bill increases 
the priority of child support obligations in bankruptcy. The Baldwin 
amendment does not do that. The National Child Support Enforcement 
Association states that these reforms are crucial to the collection of 
child support during bankruptcy. Do not turn your back on custodial 
parents who have to file bankruptcy because they cannot collect their 
support.

                              {time}  1500

  Fourth, authorization for the appointment of additional bankruptcy 
judges in districts where there is a huge backlog of bankruptcy cases. 
Voting for the Baldwin amendment will mean justice delayed being 
justice denied. Voting against it and passing the bill will allow more 
judges to prosecute these cases to a conclusion.
  Fifth, protections for victims of crimes of violence from being 
further victimized by criminals who file for bankruptcy relief.
  Sixth, reforms requiring consumers to receive important information 
about the alternatives to, and consequences of, bankruptcy before they 
file for relief. Is it not better that people not file for bankruptcy 
because they can get better information and counseling to prevent them 
from having a scarlet letter being attached to their name because they 
had to go through bankruptcy?
  There are also provisions waiving the filing of bankruptcy fees for 
the indigent. If my colleagues vote for the Baldwin amendment and 
against the bill, those provisions are not there.
  There are reforms requiring millions of consumers to receive a 
monthly credit card billing statement that would include specific 
disclosures about the increased interest and repayment time associated 
with making minimum payments. A lot of people end up having to file for 
bankruptcy because they get themselves further and further in the hole 
with revolving credit card payments. If there is a warning on that and 
some information on that on the statements maybe not as many people 
will end up getting in that hole.
  Also, the enactment of long-overdue reforms intended to reduce 
systemic risk in the banking and financial marketplace by minimizing 
the risk of disruption when parties to certain financial transactions 
become bankrupt or insolvent, the so-called netting provision. Federal 
Reserve Board Chairman Alan Greenspan has said these reforms are 
extremely important. They are extremely important for economic 
stability. The authors and supporters of the Baldwin amendment turn 
their backs on these reforms.
  Also, protections against the disclosure of the name of a debtor's 
minor children in public bankruptcy files. Apparently, the people who 
want to strip these reforms out want anybody to go into a courthouse 
and see the names of minor children in a parent's bankruptcy file and 
let that become a matter of public discussion. There are also 
provisions preventing debtors from selling their customers' personally 
identifiable information.
  The bill has reforms requiring the appointment of an ombudsman to 
safeguard the interests of patients in health care facilities that are 
in bankruptcy. Support the amendment and vote down the bill; there is 
no ombudsman to help out those patients in the bankrupt health care 
facility.

[[Page 616]]

  In light of the disastrous impact that bankruptcy cases like WorldCom 
and Enron have had on their employees, reforms that more than double 
the current monetary cap on wage and employee benefit claims entitled 
to priority under the bankruptcy code are included in my bill, but not 
the amendment that is before the House.
  Other provisions would protect retirees in cases where chapter 11 
debtors unilaterally modify their benefits, such as health insurance. 
We protect as best as possible retirees of a bankrupt company in 
forcing the company to try to uphold their health insurance obligation 
to those retirees.
  Vote for the Baldwin amendment; those are not in there. My bill has 
got them.
  These reforms would make it easier to recover excessive pre-petition 
compensation such as bonuses paid to insiders of a debtor that can be 
used to pay unpaid employee wage claims. My bill has got that. The 
amendment does not.
  I should also point out that chapter 12 is rarely utilized by family 
farmers. Last year, less than 700 chapter 12 cases were filed out of 
the nearly 1.7 million bankruptcy cases filed during the same period. 
When chapter 12 lapses, as it has in the past, farmers can still seek 
bankruptcy relief under other chapters of the bankruptcy code; so we do 
not leave farmers that need to file for bankruptcy out in the cold. 
Merely what we do is enact chapter 12 on a permanent basis, and because 
of the provision in retroactivity and the amendment that was just 
adopted, their cases can be converted to chapter 12 once that chapter 
is reenacted.
  While we obviously care about family farmers, we also care about the 
indigent, the patient, the single moms with unpaid support claims, 
retired employees who have lost their health benefits and the financial 
well-being of millions of consumers. Accordingly, Mr. Chairman, I urge 
my colleagues to vote against this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Ms. BALDWIN. Mr. Chairman, I yield myself such time as I may consume.
  This House has already debated and voted on H.R. 975. My amendment 
does nothing to change that. This is truly a matter between the 
Republican leadership of the two bodies.
  The gentleman notes that the chapter 12 provisions have expired six 
times of varying length, most recently on December 31, 2003.
  I would note that June 23, 2003, the same gentleman said on this 
floor that ``it is crucial that this specialized form of bankruptcy 
relief for farmers not be allowed to sunset for two fundamental 
reasons. First, family farmers absent chapter 12 would be forced to 
file for bankruptcy relief under the bankruptcy code's other 
alternatives, none of which work as well for them as does chapter 12.''
  We started the day with a bill before us that was simply a 6-month 
extension of chapter 12 bankruptcy. We can end the day with a permanent 
authorization of that bankruptcy code if my colleagues support my 
substitute amendment.
  Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from 
Pennsylvania (Mr. Holden), who has been extraordinarily active on this 
issue in fighting for family farmers.
  Mr. HOLDEN. Mr. Chairman, I thank the gentlewoman for yielding me the 
time.
  Mr. Chairman, I rise in support of the Baldwin amendment, which 
simply seeks to extend chapter 12 of the bankruptcy code on a permanent 
basis once and for all. This amendment represents an achievable 
solution to a problem that has existed for more than 6 years.
  In 1997, the National Bankruptcy Review Commission recommended that 
chapter 12 of the Federal Bankruptcy Code, the chapter that contains 
bankruptcy protection for family farmers, be made permanent.
  Chapter 12 is by no means a controversial issue. It was enacted in 
1986 as a measure to allow family farmers to repay their debts 
according to a plan under court supervision. Chapter 12 prevents a 
situation from occurring where a few bad crop years result in the loss 
of the family farm.
  In the absence of chapter 12, family farmers are forced to file for 
bankruptcy relief under the bankruptcy code's other alternatives, none 
of which work quite as well for farmers as chapter 12 does. Chapter 11, 
for example, will require a farmer to sell the family farm to pay the 
claims of creditors. How can a farmer be expected to come up with the 
money to pay off his debts without his farm? Chapter 11 is an expensive 
process that does not accommodate the special needs of farmers.
  This Congress, just as in previous Congresses, the larger Bankruptcy 
Reform Act, H.R. 975, includes a provision that permanently extends 
chapter 12. Also in this Congress, just as in previous Congresses, the 
larger Bankruptcy Reform Act, while enjoying a majority of support in 
the House, remains a controversial bill whose consideration by the 
other body remains a question. Simply substituting the text of H.R. 975 
into this bill and sending it back over to the other body will not 
bring us any closer to extending chapter 12, even on a temporary basis.
  For years now, family farmers have been held hostage by the 
contentious debate surrounding the larger bankruptcy issue. Since at 
least the 105th Congress, they have been made to sit on pins and 
needles waiting to see if we will extend these protections for another 
few months as we try to work out the larger bankruptcy issue.
  Mr. Chairman, the family farmers have waited long enough. Family 
farmers cannot make long-term financial plans based on 6-month 
extensions. Permanently extending chapter 12 will give farmers the kind 
of protection they desperately need, the kind of protections we have 
already voted for time and time again since the 1997 National 
Bankruptcy Review Commission recommendation.
  I urge my colleagues to accept the Baldwin amendment.
  Mr. SENSENBRENNER. Mr. Chairman, how much time remains on each side?
  The CHAIRMAN. The gentleman from Wisconsin (Mr. Sensenbrenner) has 
20\1/2\ minutes remaining. The gentlewoman from Wisconsin (Ms. Baldwin) 
has 18\1/2\ minutes remaining.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 3 minutes to the gentleman 
from Utah (Mr. Cannon).
  Mr. CANNON. Mr. Chairman, I think it is important here to agree where 
things are agreeable and to be clear about what the disagreements are.
  I think it is very clear that we have had a number of extensions to 
the farm bill. I think it is clear that those extensions have all been 
retroactive. I think it is clear that every Member of this body wants 
to make sure that this noncontroversial provision continues in place. I 
think everyone should agree here that it is important that farmers are 
able to get credit, and balancing the issues before us are important so 
that that credit system stays in place and so that we also enhance, by 
the way, the rest of our economy.
  The fact is the bill before us is a bipartisan bill. We have heard 
special interests uttered numerous times here, and perhaps we ought to 
have the same kind of response to that that we have in the Bible 
because it is so misleading. The fact is this is not a special interest 
bill. This is a bill that passed 315 to 115. This is a bipartisan bill 
that solves problems that we need to resolve in our economy.
  On the other hand, those people who are passionate about prosecuting 
possible acts of people who are against abortion, that represents I 
believe a special interest that should not be one that sets aside this 
bill and allows it to go forward.
  Another thing that we apparently disagree on is that this bill can be 
passed or not. The fact is this is a passable bill. It can be passed 
very quickly. It can solve the problems of our family farmers. It can 
reinstate chapter 12, which we all agree is very, very important, and 
it can move through a conference with the Senate and to the President 
for signature very quickly. We have done a number of things in this 
bill to make it helpful for Americans and for American consumers, and I 
would urge opposition to the amendment and support for the underlying 
bill.

[[Page 617]]


  Ms. BALDWIN. Mr. Chairman, I yield 5 minutes to the gentleman from 
North Carolina (Mr. Watt).
  Mr. WATT. Mr. Chairman, I thank the gentlewoman for yielding me the 
time; and, Mr. Chairman, I do not think I will take 5 minutes, but I 
wanted to make a couple of comments because the chairman of the full 
committee has chided me on one or more occasions about voting against 
the rule that would have allowed the old bankruptcy bill that had the 
abortion clinics provisions in it to come to the floor and has made it 
sound like I did something that was inappropriate.
  Now the chairman of the committee is going to have the opportunity to 
show how committed he is to a permanent extension of the family farms 
because the gentlewoman from Wisconsin's (Ms. Baldwin) amendment would 
make the family farms provisions of the bankruptcy law permanent, and 
he has gone out of his way to talk about how he would like to see those 
provisions be permanent. I will be anxious to see how he plans to vote 
on this amendment because this is the clear way to make the provisions 
that protect family farmers permanent in the law, to keep it away from 
all of this abortion clinic politics, to keep it completely away from 
bankruptcy reform politics. This is the vote that will show either my 
colleagues are committed to protecting family farmers in this country 
or they are not.
  I am anxiously awaiting how my colleagues are going to cast their 
vote on this, since the gentleman from Wisconsin (Mr. Sensenbrenner) 
has made such a point of pointing out that I voted against the rule 
that would have allowed the prior bill to come to the floor last year. 
So this amendment is on the floor. There will be a recorded vote. I 
will be anxious to see how my chairman votes on it.
  It is clear that farmers in this country are having a difficult time. 
Whereas there was a 7 percent, almost-8 percent decline in small 
business or business bankruptcies in 2003 and a 7 percent increase in 
individual bankruptcy filings in 2003, there was a 116.8 percent 
increase in bankruptcy filings by farmers in this country.

                              {time}  1515

  So it is clear that farmers have been in distress.
  This bill started out being a noncontroversial, farmer-friendly bill 
that would have passed this House on the suspension calendar had the 
leadership decided that it would put it on the suspension calendar. It 
had broad bipartisan support. We have extended on several occasions 
before the family-farm provisions.
  It is not tied up in the politics of bankruptcy reform. It is not 
tied up in the politics of abortion clinics and whether there ought to 
be abortion provisions in the bankruptcy bill. This is a clear, clear-
cut vote on whether we want to permanently extend the family-farm 
provisions.
  So let there be no mistake about it, family farmers ought to hold 
Members of this body accountable on this vote. It is not trapped with 
any kind of political agenda. It is what we all have fought for. It is 
what we say we all believe in. This is our opportunity to vote on it. 
So I want to encourage my colleagues to support the Baldwin amendment.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentleman 
from Virginia (Mr. Goodlatte), the chairman of the Committee on 
Agriculture.
  Mr. GOODLATTE. Mr. Chairman, I want to thank the chairman, the 
gentleman from Wisconsin (Mr. Sensenbrenner), for yielding me this 
time, and as chairman of the House Committee on Agriculture, I thank 
him for his leadership in bringing this legislation to the floor to 
help not only America's farmers and ranchers, but all small businesses 
dealing with the problems that exist in our current Bankruptcy Code.
  The Baldwin amendment seeks to pick apart the comprehensive reforms 
by addressing farm and ranch bankruptcy only, which may be a popular 
proposal at first glance to many of us who represent farm country, but 
it is one the House should turn down this afternoon. If the House wants 
to enact full Chapter 12 reforms, including a permanent authorization, 
then Members should adopt the Sensenbrenner substitute, which contains 
these reforms.
  Unfortunately, the Baldwin amendment is another cynical attempt to 
pit farmers and ranchers against other small-business owners and 
consumers. The bottom line is, adopting the Sensenbrenner comprehensive 
package protects family farmers, single moms, small businesses and 
millions of consumers. I would ask Members to vote ``no'' on the 
Baldwin amendment and keep bankruptcy reforms in a single bipartisan 
package of long overdue reforms to the Bankruptcy Code.
  Ms. BALDWIN. Mr. Chairman, I yield myself such time as I may consume; 
and in closing, I would only reiterate what I said earlier, which is 
that we started the day, this morning, with a very simple bill before 
us, a bill to extend by 6 months the Chapter 12 protections for family 
farmers. We could end the day, if we pass this substitute amendment, 
with permanent authorization of Chapter 12 bankruptcy protections for 
our family farmers and family fishermen who are struggling today in the 
United States.
  Instead, we have before us a massive bankruptcy overhaul that we have 
already debated and voted on in this House. These parliamentary 
maneuvers are most unfair to the farmers across America who woke up 
today hoping we would provide them relief. That is what we should do, 
and I urge Members to support the Baldwin substitute amendment.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of my 
time.
  Mr. Chairman, I do not think that Chapter 12 is controversial. It is 
also not utilized very much in bankruptcy filings. The statistical 
report of the Administrative Office of the U.S. Courts, for example, 
show that in the fiscal year that ended last September 30, there were 
only 19 Chapter 12 filings for the entire State of Wisconsin. So we are 
dealing with 19 family farmers, which is important, but there are still 
thousands of family farmers in my State and elsewhere that end up 
having to pay this $400 per household hidden tax and higher cost of 
goods and services and higher interest on the money that they have to 
borrow because of the abuses of the bankruptcy system that my amendment 
seeks to plug.
  Now, the major reform of all of those that we have talked about in 
the bankruptcy bill, that this House has voted to approve eight times 
in various forms and motions, is that someone who is able to repay all 
or part of their debts through future earning cannot get a Chapter 7 
liquidation and have all those debts discharged.
  So this so-called ``means test'' means that someone who is really 
down and out and does not have the prospect of future earnings being 
able to repay a significant part of their debts, my bill does not 
impact on what their legal options are. They will still be able to file 
for Chapter 7, get a discharge, and be able to try to put their lives 
together and start anew. But somebody who does have the potential of 
future earnings, and, yes, a lot of these people use the bankruptcy 
system as a financial planning tool, my bill will allow a court to 
order a repayment of all or part of those debts.
  Remember, every penny that is recovered this way is one less penny 
that has to be passed on to the 98 percent of the people of this 
country who pay their bills on time or as agreed to. The abuses of the 
bankruptcy system amount to about a $40 billion cost shift from people 
who do not pay their bills to people who do pay their bills.
  I ask the Members to vote down the Baldwin amendment to give us 
another shot at getting a conference report passed and on the 
President's desk, because that is the vote in the interest of saving as 
much money as possible for the people who do pay their bills rather 
than allowing continued abuses of the bankruptcy system.

[[Page 618]]

  Vote ``no'' on the Baldwin amendment, pass the underlying bill, the 
substitute amendment, as authorized by the Committee on Rules.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time has expired. The question is on the amendment 
in the nature of a substitute offered by the gentlewoman from Wisconsin 
(Ms. Baldwin).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Ms. BALDWIN. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 158, 
noes 204, answered ``present'' 1, not voting 70, as follows:

                              [Roll No. 8]

                               AYES--158

     Allen
     Andrews
     Baird
     Baldwin
     Ballance
     Becerra
     Berkley
     Berman
     Berry
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Case
     Clay
     Clyburn
     Conyers
     Cooper
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dooley (CA)
     Doyle
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Green (TX)
     Grijalva
     Harman
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley (OR)
     Hoyer
     Inslee
     Jackson (IL)
     Jefferson
     John
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Lynch
     Majette
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McNulty
     Meehan
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Ross
     Rothman
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Sherman
     Skelton
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--204

     Aderholt
     Akin
     Baca
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Boozman
     Boucher
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Burgess
     Burns
     Burr
     Burton (IN)
     Calvert
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cox
     Cramer
     Crenshaw
     Cubin
     Culberson
     Davis (FL)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Emerson
     English
     Feeney
     Ferguson
     Flake
     Foley
     Fossella
     Franks (AZ)
     Frelinghuysen
     Garrett (NJ)
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Isakson
     Issa
     Istook
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     LaHood
     Latham
     LaTourette
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Matheson
     McCotter
     McCrery
     McHugh
     McKeon
     Meek (FL)
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Pickering
     Pitts
     Platts
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Rogers (AL)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ryan (WI)
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (FL)

                        ANSWERED ``PRESENT''--1

      
     Ruppersberger
      

                             NOT VOTING--70

     Abercrombie
     Ackerman
     Alexander
     Bachus
     Ballenger
     Bell
     Bereuter
     Bishop (GA)
     Bono
     Brown, Corrine
     Brown-Waite, Ginny
     Buyer
     Camp
     Carson (OK)
     Crane
     Cunningham
     DeGette
     Delahunt
     Doggett
     Everett
     Fattah
     Forbes
     Gallegly
     Gephardt
     Gerlach
     Gutierrez
     Hastings (FL)
     Hefley
     Honda
     Houghton
     Hunter
     Hyde
     Israel
     Jackson-Lee (TX)
     Jenkins
     Johnson, E. B.
     Jones (NC)
     Kolbe
     Kucinich
     Leach
     Lewis (CA)
     Lipinski
     McInnis
     McIntyre
     Meeks (NY)
     Miller (MI)
     Miller, George
     Mollohan
     Ortiz
     Petri
     Pombo
     Reyes
     Reynolds
     Rodriguez
     Rogers (KY)
     Roybal-Allard
     Royce
     Ryun (KS)
     Sandlin
     Serrano
     Shimkus
     Slaughter
     Souder
     Tanner
     Thomas
     Turner (TX)
     Waters
     Watson
     Weldon (PA)
     Young (AK)

                              {time}  1550

  Mr. SAXTON and Mr. MEEK of Florida changed their vote from ``aye'' to 
``no.''
  Mrs. LOWEY changed her vote from ``no'' to ``aye.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  Stated against:
  Mr. BEREUTER. Mr. Chairman, on rollcall No. 8, I was attending the 
Memorial Service for former Member Barber Conable. Had I been present, 
I would have voted ``no.''
  Mr. REYNOLDS. Mr. Chairman, on rollcall Number 8, I was unable to be 
in the Chamber to cast a vote on the Baldwin Substitute Amendment to S. 
1920 before time elapsed on the vote. My absence was due to my 
attendance at the Memorial Service for former Representative Barber 
Conable of New York.
  Had I been present for the vote, I would have voted ``no,'' on the 
Baldwin Substitute Amendment.
  The CHAIRMAN. The question is on the amendment in the nature of a 
substitute, as amended.
  The amendment in the nature of a substitute, as amended, was agreed 
to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Simpson) having assumed the chair, Mr. LaHood, Chairman of the 
Committee of the Whole House on the State of the Union, reported that 
that Committee, having had under consideration the Senate bill (S. 
1920) to extend for 6 months the period for which chapter 12 of title 
11 of the United States Code is reenacted, pursuant to House Resolution 
503, he reported the Senate bill back to the House with an amendment 
adopted by the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on the amendment to the amendment in the 
nature of a substitute adopted by the Committee of the Whole? If not, 
the question is on the amendment in the nature of a substitute.
  The amendment in the nature of a substitute was agreed to.
  The SPEAKER pro tempore. The question is on the third reading of the 
Senate bill.
  The Senate bill was ordered to be read a third time, and was read the 
third time.


              Motion to Recommit Offered by Ms. Schakowsky

  Ms. SCHAKOWSKY. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentlewoman opposed to the Senate 
bill?
  Ms. SCHAKOWSKY. I am, Mr. Speaker, in its present form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Ms. Schakowsky moves to recommit the bill (S. 1920) to the 
     Committee on the Judiciary, with instructions to report the 
     bill back

[[Page 619]]

     to the House forthwith, with the following amendment:
       After section 102 insert the following:
       

     SEC. 102A. PROTECTING MEMBERS OF THE MILITARY, VETERANS, AND 
                   THEIR FAMILIES.

       Section 707(b)(7) of title 11, United States Code, as 
     amended by section 102, is amended--
       (1) in subparagraph (B) by striking the close quotation 
     marks and the period at the end; and
       (2) by adding at the end the following:
       ``(C) No judge, United States trustee (or bankruptcy 
     administrator, if any), trustee, or other party in interest 
     may file a motion under paragraph (2) if--
       ``(i) the debtor or the debtor's spouse is a servicemember 
     (as defined in section 101 of the Servicemembers Civil Relief 
     Act);
       ``(ii) the debtor or the debtor's spouse is a veteran (as 
     defined in section 101(2) of title 38); or
       ``(iii) the debtor's spouse dies while in military service 
     (as defined in section 101 of the Servicemembers Civil Relief 
     Act).''.
       
       
       In the table of contents, after the item relating to 
     section 102, insert the following item:

Sec. 102A. Protecting members of the military, veterans, and their 
              families.

  Mr. SENSENBRENNER (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion to recommit be considered as read and printed 
in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Illinois (Ms. Schakowsky) is recognized for 5 minutes in support of her 
motion to recommit.
  Ms. SCHAKOWSKY. Mr. Speaker, I yield myself 2 minutes.
  I rise today with the gentlewoman from California (Ms. Loretta 
Sanchez) and the gentleman from Ohio (Mr. Strickland) to offer this 
motion to recommit on behalf of our brave soldiers and their families 
and veterans across the country. My motion to recommit would provide 
basic protections to financially distressed military families and 
veterans from the harsher aspects of the means test found in the newly 
added text of S. 1920. This motion would provide safe harbor from the 
bill's means test for military and veterans' families and safe harbor 
for the widows of our servicewomen and men.
  Without changing the bill, military personnel, veterans and their 
families could be dragged into court by their creditors. They could be 
harassed because of an arbitrary standard, the means test, that has no 
true reflection of whether they can pay their debt or not. The men and 
women who in the past have and do today risk their lives to protect us 
deserve protection from us in return. We should be offering them 
relief, not greater hardships.
  Since 9/11, 350,000 reservists and guardsmen have been called to 
active duty and almost 40,000 are serving in Iraq. According to the 
National Guard, four out of 10 members of the Reserves and National 
Guard lose money when they leave their civilian jobs for active duty. 
Additionally, many left for the war thinking they would be deployed for 
6 months and have ended up staying for a year or even longer. There is 
almost no way that they could have financially anticipated and prepared 
for that extension of their service.
  We want to help people like Mrs. Vicky Wessel. When she appeared on 
``60 Minutes'' last year, she expressed the concerns that many families 
of reservists whose husbands or wives have been called to active duty 
experience. What she talked about was the financial difficulty. She 
said, ``It is because a staff sergeant's pay is a 60 percent cut in pay 
from my husband's regular job.''
  There are thousands of families like the Wessels. Make no mistake 
about it, these families will not be protected under the bill as it 
stands. These are people who, through no fault of their own, may end up 
in bankruptcy. They are risking their lives for us. And the veterans 
who have done so in the past, we should protect them. This is what my 
motion to recommit does.
  Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from 
California (Ms. Loretta Sanchez).
  Ms. LORETTA SANCHEZ of California. Mr. Speaker, I rise today in 
support of this motion to recommit this bill with instructions to 
ensure that members of our military, veterans and their families are 
afforded bankruptcy protection under Chapter 7.
  Every American knows that our Nation's greatest debt is to the men 
and the women who have worn the uniform of our country so that we can 
live in freedom and prosperity. Unfortunately, this has come at a very 
high price to many of the service members and to their families.
  The war on terror is taking an entirely new toll, and a considerable 
portion of the burden is falling on our reservists. Never before have 
we asked so much of our troops. Nearly 250,000, including 120,000 
reservists, have been fighting or are scheduled to begin service. 
Nearly 40 percent of the reservists suffer a major loss in income 
during this time. For many, the difference can amount to tens of 
thousands of dollars. As a result, service members are falling behind 
in their mortgages, depleting their life savings, losing personal 
businesses and racking up significant credit card debt. My colleagues 
might be surprised to know that some that are suffering the worst are 
medical doctors, self-employed doctors who were in private practices, 
but now have to leave them, have to keep the fixed overhead and pay 
that and come back. Their patients are gone, their nurses are gone, and 
they have thousands of dollars in unpaid bills.
  Mr. Speaker, this country has a history of undertaking efforts to 
secure legal protections so that service members can devote their 
energy to the defense needs of our Nation. This motion would continue 
those efforts.
  I urge all of my colleagues to vote ``yes.''
  Ms. SCHAKOWSKY. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Ohio (Mr. Strickland).
  Mr. STRICKLAND. Mr. Speaker, it is because of the unique financial 
situations that veterans and military personnel often find themselves 
in as a result of their military service to our country that I support 
this motion to recommit, which would exempt them from the means test 
under Chapter 7.
  The means test used to determine whether a debtor can file under 
Chapter 7 is an arbitrary bureaucratic formula. Its mathematical 
variables really do not reflect the unique circumstances of deployed 
military personnel that experience sudden loss of income. The test does 
not look at the debtor's actual expenses or personal situation. Rather, 
it uses a hypothetical expense of what a debtor's cost of living is 
mathematically determined to be. The means test uses this figure to 
calculate excess money, and when someone has too much excess money, 
they are prohibited from filing under Chapter 7.

                              {time}  1600

  The only recourse left to the individual denied this is a court 
motion for permission to use actual income and expenses, and such a 
motion takes time and money, something our soldiers and our veterans do 
not have.
  So I would just simply ask my colleagues to consider what we have 
asked of our veterans and what we are currently asking of our military 
personnel. They have endured much for us, and I ask that we simply 
honor their service by voting for this exemption.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore (Mr. Simpson). The gentleman from Wisconsin 
(Mr. Sensenbrenner) is recognized for 5 minutes.
  Mr. SENSENBRENNER. Mr. Speaker, let us be clear. The means-based test 
only applies to people with incomes above the State median income 
average. Anybody who is below the State median income does not qualify 
under the means-based test, and their bankruptcy petition cannot be 
thrown out.
  Secondly, what the motion of the gentlewoman from Illinois proposes 
to do is to provide an exemption for active-duty servicemembers from 
the means-based test. That has been taken

[[Page 620]]

care of in most part since 1940 under the Soldiers and Sailors Relief 
Act, which allows for the staying of legal proceedings against anybody 
who is on active duty.
  And I submit to the gentlewoman from Illinois and others that next 
year join us in voting for a defense authorization bill that gives our 
servicepeople a pay raise because that is the way to prevent 
bankruptcies to begin with.
  But I would also like to point out that this motion to recommit 
applies to anybody who is a veteran. There are a lot of veterans that 
would fall under this exemption that have a lot of income. Take, for 
example, the junior Senator from Massachusetts, Mr. Kerry. He gets the 
same salary that we do, and it is reported that his wife has 
significant assets on her own. Under the gentlewoman's motion to 
recommit, should Mr. Kerry end up in hard times and have to file for 
bankruptcy, he would not allow his creditors to be able to ask for a 
means-based bankruptcy to apply at least some of the Senate salary that 
he received to apply to his debts. That is wrong. Vote ``no'' on the 
motion to recommit and vote to pass the bill.


                announcement by the speaker pro tempore

  The SPEAKER pro tempore. The Chair would remind Members to refrain 
from improper references to Senators.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
  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

  Ms. SCHAKOWSKY. 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 passage.
  The vote was taken by electronic device, and there were--ayes 170, 
noes 198, answered ``present'' 1, not voting 63, as follows:

                              [Roll No. 9]

                               AYES--170

     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boyd
     Brady (PA)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Case
     Clay
     Clyburn
     Conyers
     Cooper
     Costello
     Cramer
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dooley (CA)
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Green (TX)
     Grijalva
     Harman
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley (OR)
     Hoyer
     Inslee
     Jackson (IL)
     Jefferson
     John
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Lucas (KY)
     Lynch
     Majette
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McNulty
     Meehan
     Meek (FL)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Ross
     Rothman
     Rush
     Ryan (OH)
     Sabo
     Sánchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Simmons
     Skelton
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velázquez
     Visclosky
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wynn

                               NOES--198

     Aderholt
     Akin
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Boozman
     Boucher
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Burgess
     Burns
     Burr
     Burton (IN)
     Calvert
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cox
     Crenshaw
     Cubin
     Culberson
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emerson
     English
     Feeney
     Ferguson
     Flake
     Foley
     Fossella
     Franks (AZ)
     Frelinghuysen
     Garrett (NJ)
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hulshof
     Isakson
     Issa
     Istook
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCotter
     McCrery
     McHugh
     McKeon
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ryan (WI)
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shuster
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (FL)

                        ANSWERED ``PRESENT''--1

      
     Ruppersberger
      

                             NOT VOTING--63

     Abercrombie
     Ackerman
     Alexander
     Ballenger
     Bell
     Bono
     Brown, Corrine
     Brown-Waite, Ginny
     Buyer
     Camp
     Carson (OK)
     Crane
     Cunningham
     DeGette
     Delahunt
     Doggett
     Everett
     Fattah
     Forbes
     Gallegly
     Gephardt
     Gerlach
     Gutierrez
     Hastings (FL)
     Hefley
     Honda
     Hunter
     Hyde
     Israel
     Jackson-Lee (TX)
     Jenkins
     Johnson, E. B.
     Jones (NC)
     Kucinich
     Leach
     Lewis (CA)
     Lipinski
     McInnis
     McIntyre
     Meeks (NY)
     Miller (MI)
     Miller, George
     Mollohan
     Ortiz
     Pombo
     Reyes
     Rodriguez
     Rogers (KY)
     Roybal-Allard
     Royce
     Ryun (KS)
     Sandlin
     Shimkus
     Slaughter
     Souder
     Tanner
     Thomas
     Turner (TX)
     Waters
     Watson
     Weldon (PA)
     Wu
     Young (AK)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are 
advised that 2 minutes remain in this vote.

                              {time}  1624

  Mr. CONYERS changed his vote from ``no'' to ``aye.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the Senate 
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 will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 265, 
nays 99, answered ``present'' 1, not voting 67, as follows:

                             [Roll No. 10]

                               YEAS--265

     Aderholt
     Akin
     Andrews
     Baca
     Bachus
     Baird
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Berkley
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blackburn
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Boozman
     Boswell
     Boucher
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Burgess
     Burns
     Burr
     Burton (IN)
     Calvert
     Cannon
     Cantor
     Capito
     Cardoza

[[Page 621]]


     Carter
     Case
     Castle
     Chabot
     Chocola
     Clyburn
     Coble
     Cole
     Collins
     Cox
     Cramer
     Crenshaw
     Crowley
     Cubin
     Culberson
     Davis (AL)
     Davis (FL)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Deutsch
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Dooley (CA)
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Emerson
     English
     Etheridge
     Feeney
     Ferguson
     Flake
     Foley
     Ford
     Fossella
     Franks (AZ)
     Frelinghuysen
     Frost
     Garrett (NJ)
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harman
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hensarling
     Herger
     Hill
     Hinojosa
     Hobson
     Hoekstra
     Hooley (OR)
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Inslee
     Isakson
     Issa
     Istook
     Jefferson
     John
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Keller
     Kelly
     Kennedy (MN)
     Kind
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Lampson
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Matheson
     McCarthy (NY)
     McCotter
     McCrery
     McHugh
     McKeon
     Meek (FL)
     Menendez
     Mica
     Michaud
     Miller (FL)
     Miller, Gary
     Moore
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pallone
     Pascrell
     Pastor
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Renzi
     Rogers (AL)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ross
     Rothman
     Ryan (WI)
     Saxton
     Schrock
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shuster
     Simmons
     Simpson
     Skelton
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Spratt
     Stearns
     Stenholm
     Strickland
     Sullivan
     Sweeney
     Tancredo
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Wynn
     Young (FL)

                                NAYS--99

     Allen
     Baldwin
     Ballance
     Becerra
     Berman
     Brady (PA)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Clay
     Conyers
     Cooper
     Costello
     Cummings
     Davis (CA)
     Davis (IL)
     DeFazio
     DeLauro
     Emanuel
     Engel
     Eshoo
     Evans
     Farr
     Filner
     Frank (MA)
     Gonzalez
     Green (TX)
     Grijalva
     Hinchey
     Hoeffel
     Holden
     Holt
     Jackson (IL)
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kleczka
     Langevin
     Lantos
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Lynch
     Majette
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy (MO)
     McCollum
     McDermott
     McGovern
     McNulty
     Meehan
     Millender-McDonald
     Miller (NC)
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Owens
     Payne
     Pelosi
     Rangel
     Rush
     Ryan (OH)
     Sabo
     Sánchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Sherman
     Snyder
     Solis
     Stark
     Stupak
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Watt
     Waxman
     Weiner
     Woolsey

                        ANSWERED ``PRESENT'' --1

      
     Ruppersberger
      

                             NOT VOTING--67

     Abercrombie
     Ackerman
     Alexander
     Baker
     Ballenger
     Bell
     Bono
     Brown, Corrine
     Brown-Waite, Ginny
     Buyer
     Camp
     Carson (OK)
     Crane
     Cunningham
     DeGette
     Delahunt
     Doggett
     Everett
     Fattah
     Forbes
     Gallegly
     Gephardt
     Gerlach
     Gutierrez
     Hastings (FL)
     Hefley
     Honda
     Hunter
     Hyde
     Israel
     Jackson-Lee (TX)
     Jenkins
     Johnson, E. B.
     Jones (NC)
     Kucinich
     Leach
     Lewis (CA)
     Lipinski
     McInnis
     McIntyre
     Meeks (NY)
     Miller (MI)
     Miller, George
     Mollohan
     Ortiz
     Pombo
     Reyes
     Reynolds
     Rodriguez
     Rogers (KY)
     Roybal-Allard
     Royce
     Ryun (KS)
     Sandlin
     Shimkus
     Slaughter
     Smith (MI)
     Souder
     Tanner
     Thomas
     Turner (TX)
     Waters
     Watson
     Weldon (PA)
     Wexler
     Wu
     Young (AK)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised 2 
minutes remain in this vote.

                              {time}  1632

  So the Senate bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                              {time}  1630


                       Motion to Go to Conference

  Mr. SENSENBRENNER. Mr. Speaker, pursuant to House Resolution 503, I 
offer a motion.
  The Clerk read as follows:

       Mr. Sensenbrenner moves that the House insist on its 
     amendment to S. 1920 and request a conference with the Senate 
     thereon.

  The motion was agreed to.


                      Motion to Instruct Conferees

  Mr. NADLER. Mr. Speaker, I offer a motion to instruct.
  The Clerk read as follows:

       Mr. Nadler moves that the managers on the part of the House 
     at the conference on the disagreeing votes of the two Houses 
     on the House amendment to the Senate bill (S. 1920) be 
     instructed to disagree to section 414 of the House amendment.

  The SPEAKER pro tempore (Mr. Simpson). Pursuant to clause 7 of rule 
XXII, the gentleman from New York (Mr. Nadler) and the gentleman from 
Wisconsin (Mr. Sensenbrenner) each will control 30 minutes.
  The Chair recognizes the gentleman from New York (Mr. Nadler).
  Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume. I 
anticipate that this debate on this motion to instruct will take only a 
small fraction of the time allotted to it.
  Mr. Speaker, this motion would instruct the conferees to strike 
section 414 of the bill. Section 414 would repeal important protections 
in the Bankruptcy Code against conflicts of interest on the part of 
investment bankers involved in the reorganization of a bankrupt 
company.
  Section 414 would relieve investment bankers of the duty of being 
disinterested persons before they can be retained as professionals by 
the bankruptcy trustee. This disinterestedness standard has been in the 
code since 1938. It protects the estate from conflicts of interest by 
professionals in the case.
  Mr. Speaker, many, many people who support this bill, which I do not, 
are opposed to this provision and support this motion to instruct. 
Judge Edith Jones of the U.S. Court of Appeals for the Fifth Circuit, a 
very conservative judge who is a member of the Bankruptcy Reform 
Commission and supports the bill, has written: ``Such a standard can 
alone protect integrity in the bankruptcy process. If professionals who 
have previously been associated with a debtor continue to work for the 
debtor during a bankruptcy case, they will often be subject to 
conflicting loyalties that undermine their foremost fiduciary duty to 
the creditors. Strict disinterestedness required by current law 
eliminates such conflicts or potential conflicts. Section 414, in 
removing the rigorous standard of disinterestedness, is out of 
character with the rest of this important legislation, however, and it 
should be eliminated.''
  Mr. Speaker, that letter is as follows:

                                   United States Court of Appeals,


                                                Fifth Circuit,

                                      Houston, TX, March 11, 2003.
     Hon. F. James Sensenbrenner, Jr.,
     Chairman, House Committee on the Judiciary, Rayburn House 
         Office Building, Washington, DC.
       Dear Mr. Chairman: I understand that the House Committee on 
     the Judiciary will consider H.R. 975, bankruptcy reform 
     legislation, on the morning of March 11, 2003. I also 
     understand that the Committee may consider whether or not to 
     retain Section 414 of the bill, which would amend the 
     ``disinterested person'' standard codified at 11 U.S.C. 
     Sec. 101(14). As a former member of the National Bankruptcy 
     Review Commission and, in that capacity, a consistent 
     advocate of maintaining strict disinterestedness standards 
     for bankruptcy professionals, I urge the Committee not to 
     change existing law. I support Congressman Bachus's effort to 
     remove Section 414.
       The National Bankruptcy Review Commission was asked to 
     recommend a modification of the disinterestedness standard in 
     order to accommodate, as I recall, the geographic growth and 
     increasing sophistication of professional firms of all kinds 
     involved in Chapter 11 bankruptcvy practice. Despite fervent

[[Page 622]]

     lobbying by prominent bankruptcy professionals and scholars, 
     the Commission resisted making such a recommendation. We 
     voted (by a lopsided majority, I believe) to retain the 
     standard as it has existed since the 1930's.
       The Commission report cites two reasons for retaining a 
     strict prophylactic standard for all bankruptcy 
     professionals. These are worth brief restatement. First, such 
     a standard can alone protect integrity in the bankruptcy 
     process. If professionals who have previously been associated 
     with the debtor continue to work for the debtor during a 
     bankruptcy case, they will often be subject to conflicting 
     loyalties that undermine their foremost fiduciary duty to the 
     creditors. Strict disinterestedness, required by current law, 
     eliminates such conflicts or potential conflicts.
       Second, enforcing a strict standard of disinterestedness is 
     necessary to maintain public confidence in the integrity of 
     the bankruptcy system. A bankruptcy case should not be 
     subject to the criticism that professional fees are generated 
     to no purpose or for a bad purpose such as delay. The courts' 
     efforts to ensure that fees remain reasonable are enhanced 
     when, because of the complete disinterestedness of 
     participating professionals, no hidden motives may be imputed 
     to the actors in the case.
       One need not focus solely on today's high-profile 
     bankruptcy cases to realize that the challenge of maintaining 
     disinterested professional services has permeated modern 
     corporate reorganization law. The Commission, for instance, 
     voted to retain the original standard in the wake of the 
     criminal conviction of a prominent bankruptcy lawyer and 
     several well-known instances in which law firms were required 
     to disgorge part of their fees--all for violating 
     disinterestedness standards. Given the ongoing nature of the 
     problem, I do not see how any professional group can 
     advocate, consistent with the public interest, eliminating 
     the statutory requirement of disinterestedness. Moreover, as 
     it appears likely that many future complex bankruptcy cases 
     will arise in which the role of investment bankers will have 
     to be explored, it seems particularly unwise to grant that 
     group--alone among bankruptcy professionals--a status 
     insulated from the strict disinterestedness requirement.
       Since the close of the Commission's work in October 1997, I 
     have been a proponent of the bankruptcy reform legislation 
     that has been repeatedly passed by Congress. I still believe 
     the bankruptcy reform legislation is essential to restoring 
     integrity to personal and business bankruptcies, redressing 
     the imbalances and opportunities for manipulation that plague 
     current law, and encouraging individual responsibility in 
     financial affairs. Section 414, in removing investment 
     bankers from a rigorous standard of disinterestedness, is out 
     of character with the rest of this important legislation, 
     however, and it should be eliminated.
            Very truly yours,
                                                   Edith H. Jones.

  Mr. Speaker, why are we voting on this technical issue? Because, Mr. 
Speaker, it has significant real-world consequences for employees, 
retirees, shareholders, and creditors of a bankrupt company. Current 
law prevents an investment banker who had been part of the financial 
affairs, and perhaps of the problems, of a bankrupt company from being 
responsible during the bankruptcy for advising, organizing, and 
overseeing the reorganization.
  Anyone who has read a newspaper in the last few years cannot fail to 
understand the importance of this motion. This deals with conflicts of 
interest. Conflicts of interest among investment bankers, accountants, 
management, and other insiders have been at the heart of the most 
outrageous corporate scandals that have ended up in bankruptcy court, 
which have been in the headlines in our front pages in the last few 
years.
  Perhaps when this provision was first proposed several years ago, 
some Members may have thought it was a minor technical change. No one 
any longer can believe for a moment after everything that has happened 
that this is just a small benign change.
  The chairman of the Securities and Exchange Commission, William 
Donaldson, has written to Senators Leahy and Sarbanes in opposition to 
this provision. The former chairman of the Securities and Exchange 
Commission, Arthur Levin, has written to us in opposition to this 
provision.
  Mr. Speaker, that letter is as follows:

                                               U.S. Securities and


                                          Exchange Commission,

                                     Washington, DC, May 22, 2003.
     Hon. Patrick J. Leahy,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
     Hon. Paul S. Sarbanes,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senators Leahy and Sarbanes: Thank you for requesting 
     the Commission's views on Section 414 of H.R. 975, which 
     would amend the ``disinterested person'' definition in the 
     conflict of interest standards of the Bankruptcy Code to 
     remove the specific provisions covering investment bankers. 
     On May 7, in response to a question from Senator Sarbanes at 
     a hearing of the Senate Committee on Banking Housing and 
     Urban Affairs on the Impact of the Global Settlement, I 
     expressed my personal views about this amendment. Now I am 
     pleased to convey the view of the Commission, which is that, 
     while it may be possible to draft language that would address 
     some of the concerns of the proponents of the amendment, 
     Congress should proceed very cautiously before loosening any 
     conflicts of interest restriction. While we recognize that 
     this one-size-fits-all statutory exclusion is controversial, 
     we believe that it would be a mistake to eliminate the 
     exclusion in a similar one-size-fits-all manner at a time 
     when investor confidence is fragile.
       The current ``disinterested person'' requirement was 
     adopted at least in part in response to a 1938 study by the 
     Securities and Exchange Commission that provided extensive 
     documentation and analysis of abuses in corporate 
     reorganization. The study concluded that a firm that served 
     as underwriter for a company's securities should not advise 
     the company about distributions to those security holders in 
     a reorganization plan. It further found that such a firm 
     should not advise the company about potential claims against 
     those involved with the company prior to the bankruptcy since 
     this often would involve an assessment of transaction in 
     which the firm participated. However, we should note that in 
     the 65 years since the 1938 study was issued, bankruptcy 
     practices and procedures have improved significantly with the 
     addition of a dedicated bankruptcy judicial system, the 
     establishment of the U.S. Trustee's office, and the 
     strengthening of active creditors' committees.
       We are aware of the arguments of proponents of the 
     amendment that the current statutory exclusion is too broad 
     because it covers firms that participated in any underwriting 
     of the debtor, even if it was years ago and the firm has had 
     no further involvement with the debtor. However, if the 
     exclusion is eliminated entirely, we are concerned that the 
     general protection in the statute--which relies on the judge, 
     at the outset of the proceedings, to forbid those with 
     materially adverse interests to the estate, its creditors, or 
     its equity security holders from advising a company in 
     bankruptcy--may well be insufficient.
       We appreciate the opportunity to comment on this proposed 
     amendment. If you or your staff need any further information, 
     please contact my office.
           Sincerely,
                                             William H. Donaldson,
     Chairman.
                                  ____


                      [From Reuters, May 7, 2003]

                SEC Chief Pans Bankruptcy Adviser Change

       Washington (Reuters).--A measure before Congress that would 
     let an investment bank advise a former corporate client 
     during bankruptcy drew criticism from Securities and Exchange 
     Commission Chairman William Donaldson on Wednesday.
       ``Personally, at a time like this, where investor 
     confidence is as fragile as it is, I would want to proceed 
     very cautiously before lifting any of the conflict of 
     interest restrictions that we have,'' Donaldson told the 
     Senate Banking Committee.
       The provision redefining a ``disinterested person'' is 
     contained in an overhaul of bankruptcy law that cleared the 
     U.S. House of Representatives in March.
       Sen. Paul Sarbanes, Maryland Democrat, asked Donaldson 
     about the bankruptcy measure at a hearing on the $1.4 billion 
     settlement reached last week with 10 Wall Street firms over 
     biased research.
       Donaldson said he was not speaking for the five-member SEC 
     and could not rule out that some better definition might 
     emerge in time to let former investment bankers bring their 
     expertise into the bankruptcy process.
       ``But right now, I think it personally would be a mistake 
     to change,'' said Donaldson.
       Sarbanes, who said the prohibition on former investment 
     bankers acting as bankruptcy trustees dated back to 1938, 
     thanked Donaldson and said: ``I appreciate the attitude that 
     is reflected in that response.''
       No date has been set in the Senate for taking up the bill, 
     which would also make it harder for individuals to walk away 
     from their debts through bankruptcy.

  New York State Attorney General Eliot Spitzer, who has been in the 
forefront of the investigation and prosecution of the Wall Street 
scandals, has urged us not to make this change.
  The people responsible in both parties, Republicans and Democrats, 
the people responsible for protecting corporate integrity and 
protecting the shareholders and the stakeholders are opposed to this 
change.
  We should be passing legislation to tighten the rules against 
conflicts of interest. We should not be loosening the rules. Whatever 
anyone may think

[[Page 623]]

of the rest of this mammoth bill, I hope everyone will agree that this 
one provision cannot be justified and that when people on this side of 
the aisle joined with William Donaldson as chairman of the SEC and 
Judge Edith Jones, with whom I disagree in every other provision in 
this bill, and Arthur Levin and Eliot Spitzer, stop, look, and listen.
  This provision has been in the code since 1938. It is a protective 
provision. It protects shareholders, it protects workers, it protects 
the 401(k) accounts. Why do we need to make this change now?
  I hope people will vote to instruct the conferees, whatever they do 
in the rest of this bill, not this change.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, section 414 does allow an investment banker that 
previously represented a business to continue to represent the business 
after it files for bankruptcy. Under current law, that investment 
banker would be prohibited from representing the debtor on a per se 
basis.
  Let me say that this issue was debated in the Committee on the 
Judiciary. There was an amendment that was offered, and it was rejected 
by a vote of 12 to 17 when H.R. 975 was marked up in the committee. 
This issue was not brought up during the conference committee on H.R. 
333 in the previous Congress. And to my knowledge, there was no motion 
to instruct on this issue that was ever made by anyone.
  Let me say I am as sensitive to conflicts of interest as anybody 
else. But if you have this absolute bar, an investment banker that 
knows something about the business would be disqualified and then the 
business if it was trying to reorganize under chapter 11 would have to 
hire a new investment banker, and the new investment banker would end 
up having to be paid for all the time to get himself or that 
institution's self up to speed on the issues of the business.
  So section 414 was designed to provide the professional advice that 
investment bankers give in a way that would be able to reduce the cost 
to the estate of the bankrupt business. And that is why I think that at 
least section 414 should not be stricken in its entirety and would urge 
a ``no'' vote on the motion to instruct.
  Mr. Speaker, I yield 3 minutes to the gentleman from New York (Mr. 
Weiner).
  Mr. WEINER. Mr. Speaker, I will be brief, perhaps even less than the 
3 minutes.
  Of the forest of things that is wrong with the bankruptcy bill, and I 
voted against it, this is actually a provision that represents a tree 
that actually makes some sense.
  So my colleagues understand this provision, it says that when an 
entity enters into bankruptcy no investment house that has been 
involved in underwriting on any level at any time in the history of 
that company could be involved in the reorganization. So the following 
not-so-hypothetical could happen: Ford Motor Company goes into a 
bankruptcy proceeding and Goldman Sachs, who happened to be involved in 
their IPO 50 years ago and has had no investment and no underwriting 
since, is precluded from doing it. So who winds up benefiting from this 
provision? One company that is not an American company that happens not 
to do any underwriting.
  We have been all year on this side of the aisle, more than all year, 
for the last several years, fighting against efforts by the Republicans 
to take away discretion from judges. This is a provision that says we 
are going to let the bankruptcy judge decide whether a party is 
disinterested, conflicted or not. If we are truly concerned about 
having conflicts of interest, theoretically we should not let 
accountants do business with the debtor company or a lawyer that has 
done business with the debtor company or anyone that has given advice 
to the debtor company. Yet we are singling out investment banks. Why? 
It does not make any sense to do that.
  What we should do is take the language in this bill and make it the 
model for other debates on tort reform and everything else in this 
House. We have judges; we trust them to judge. We trust them to go 
through the parties, decide who is interested, who is disinterested, 
who has conflicts and who does not and then to draw conclusions about 
who is interested in doing what.
  By striking 414 and putting this blanket provision that says anyone 
who has ever done any underwriting work cannot be involved in the 
proceedings, I would argue does not benefit the debtor or the 
stockholders or anyone else. We should want judges that say we want the 
very best, most talented people who are going to look out for the 
people who are the parties in the case. That should be how we do it. If 
we think the judges are doing a bad job, well, that is another 
question. If we think they cannot be trusted, well, that is another 
question. But we had a problem in this House recently. We say that 
juries cannot be trusted when it comes to tort reform. We say that 
judges cannot be trusted when it comes to this type of thing. When did 
we become such experts?
  Apparently, the only thing American people can be trusted to do is 
vote for us, and then we take away all the discretion for everyone 
else. I think it is a very bad idea. There are 1,001 reasons why this 
bankruptcy bill should go into the dust bin. This is one provision that 
should not be changed. I urge a ``no'' vote.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
  Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume.
  I have two basic comments. First, in response to the comments of my 
distinguished colleague from New York, it is not the case that anyone 
who worked as an investment banker for the banker company 50 years ago 
is affected by this provision.
  If you actually read the provision in the statute book, a 
disinterested person is defined as a number of things, but it says the 
following: ``Was not an investment banker for any outstanding security 
of the debtor.'' If it is still outstanding, then he has still got a 
relationship and he still has an interest in that. ``Has not been, 
within 3 years before the date of the finding of the petition, an 
investment banker,'' et cetera. So in other words, it is a 3-year bar 
for outstanding securities. So the situation we were told about a 
moment ago does not apply.
  Let me say that this is not a question of discretion; it is a 
question of protection. And, again, all the professionals in the field, 
everyone to whom we ought to be looking for guidance in this comes to 
the same conclusion. I do not claim to be an expert in investment 
banking or bankruptcy law, but everyone who is basically says the same 
thing.
  I am going to read three quotes and that will be that. This is from 
the senior professor at Harvard Law School, an expert on bankruptcy, 
Elizabeth Warren: ``There is a reason why the professionals who have 
worked for a business that collapses into bankruptcy are not permitted 
to stay on.

                              {time}  1645

  ``The company must go back after bankruptcy and examine its old 
transactions. Having the same professionals review their own work is 
not likely to yield the most searching inquiry.''
  Arthur Levitt, former Chairman of the Securities and Exchange 
Commission: ``I haven't read a single argument made by the investment 
banks that would persuade me that that prohibition should be changed. 
What we are talking about is a significant potential conflict of 
interest, and I think it is outrageous that investment banks would even 
try to go down that road.''
  William Donaldson, the current Chairman of the Securities and 
Exchange Commission: ``We are aware of the arguments of proponents of 
the amendment that the current statutory exclusion is too broad because 
it covers firms that participated in any underwriting by the debtor, 
even if it was years ago, and the firm has had no further involvement 
with the debtor. However, if the exclusion is eliminated entirely,'' 
which is what this provision

[[Page 624]]

does, ``we are concerned that the general protection in the statute, 
which relies on the judge at the outset of the proceedings to forbid 
those with materially adverse interest to the estate, its creditors or 
its equity and security holders from advising a company in bankruptcy 
may well be insufficient.''
  So there is a unanimity of judgment among the people involved in 
protecting shareholders and stakeholders and 401(k)s and employees and 
everybody else with a stake in this matter. We should not do this. And 
just one further observation. This has been the law since 1938. We have 
had no problems with it. We have no great hordes of people coming to 
our offices saying, Get rid of this. It has caused all kind of 
problems. Leave it alone.
  Vote for the motion to recommit.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SPEAKER pro tempore (Mr. Simpson). Without objection, the 
previous question is ordered on the motion to instruct.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to instruct 
offered by the gentleman from New York (Mr. Nadler).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. NADLER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 146, 
nays 203, answered ``present'' 1, not voting 82, as follows:

                             [Roll No. 11]

                               YEAS--146

     Allen
     Andrews
     Baca
     Bachus
     Baird
     Baldwin
     Ballance
     Becerra
     Berkley
     Bishop (GA)
     Bishop (NY)
     Boyd
     Brady (PA)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Case
     Clyburn
     Conyers
     Cooper
     Costello
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis, Jo Ann
     DeFazio
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Green (TX)
     Grijalva
     Harman
     Hayworth
     Hill
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley (OR)
     Hoyer
     Inslee
     Jackson (IL)
     Jefferson
     Johnson (CT)
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lynch
     Majette
     Maloney
     Markey
     Matsui
     McCarthy (MO)
     McCollum
     McDermott
     McGovern
     Meehan
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Moore
     Moran (VA)
     Murtha
     Nadler
     Neal (MA)
     Oberstar
     Obey
     Olver
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Rohrabacher
     Ross
     Rothman
     Rush
     Ryan (OH)
     Sabo
     Sánchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Strickland
     Stupak
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velázquez
     Visclosky
     Watt
     Waxman
     Wexler
     Woolsey

                               NAYS--203

     Aderholt
     Akin
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blumenauer
     Blunt
     Boehlert
     Bonilla
     Bonner
     Boozman
     Boswell
     Boucher
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Burgess
     Burns
     Burr
     Burton (IN)
     Calvert
     Cannon
     Cantor
     Capito
     Cardoza
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Cox
     Cramer
     Crenshaw
     Crowley
     Cubin
     Culberson
     Davis (AL)
     Davis (TN)
     Davis, Tom
     DeLay
     DeMint
     Diaz-Balart, L.
     Dooley (CA)
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emerson
     English
     Feeney
     Ferguson
     Flake
     Foley
     Fossella
     Franks (AZ)
     Frelinghuysen
     Garrett (NJ)
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hulshof
     Isakson
     Issa
     Istook
     John
     Johnson (IL)
     Johnson, Sam
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Marshall
     Matheson
     McCarthy (NY)
     McCotter
     McCrery
     McHugh
     McKeon
     Meek (FL)
     Mica
     Miller (FL)
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (MI)
     Ros-Lehtinen
     Ryan (WI)
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (TX)
     Spratt
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weiner
     Weldon (FL)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (FL)

                        ANSWERED ``PRESENT''--1

      
     Ruppersberger
      

                             NOT VOTING--82

     Abercrombie
     Ackerman
     Alexander
     Baker
     Ballenger
     Barrett (SC)
     Bell
     Berman
     Berry
     Blackburn
     Boehner
     Bono
     Brown, Corrine
     Brown-Waite, Ginny
     Buyer
     Camp
     Carson (OK)
     Clay
     Collins
     Crane
     Cunningham
     Deal (GA)
     DeGette
     Delahunt
     Diaz-Balart, M.
     Doggett
     Everett
     Fattah
     Forbes
     Gallegly
     Gephardt
     Gerlach
     Gutierrez
     Hastings (FL)
     Hefley
     Hinchey
     Honda
     Hunter
     Hyde
     Israel
     Jackson-Lee (TX)
     Jenkins
     Johnson, E. B.
     Jones (NC)
     King (NY)
     Kucinich
     Leach
     Lewis (CA)
     Lipinski
     Lowey
     McInnis
     McIntyre
     McNulty
     Meeks (NY)
     Miller (MI)
     Miller, Gary
     Miller, George
     Mollohan
     Napolitano
     Ortiz
     Paul
     Pombo
     Reyes
     Rodriguez
     Rogers (KY)
     Roybal-Allard
     Royce
     Ryun (KS)
     Sandlin
     Shimkus
     Slaughter
     Souder
     Stark
     Tanner
     Thomas
     Turner (TX)
     Waters
     Watson
     Weldon (PA)
     Wu
     Wynn
     Young (AK)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are 
advised that 2 minutes remain in this vote.

                              {time}  1710

  Mrs. CUBIN, Messrs. HOUGHTON, GREENWOOD and LINCOLN DIAZ-BALART of 
Florida changed their vote from ``yea'' to ``nay.''
  So the motion to instruct was rejected.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated against:
  Mr. BARRETT of South Carolina. Mr. Speaker, due to a telephone call 
concerning an issue critical to my district with the Deputy Secretary 
of the Department of Energy, I unfortunately missed one recorded vote 
on the House floor earlier today.
  I ask that the Record reflect that had I not been unavoidably 
detained, I would have voted ``no'' on Rollcall vote No. 11 (Democratic 
Motion to Instruct Conferees on S. 1920).


                          personal explanation

  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, on January 28, 2004, 
due to an illness, I unfortunately missed four recorded votes on S. 
1920. I would like the Record to reflect that had I been present, I 
would have voted in the following manner:
  Mr. Speaker, on Rollcall No. 8, I would have voted ``aye.''
  Mr. Speaker, on Rollcall No. 9, I would have voted ``aye.''
  Mr. Speaker, on Rollcall No. 10, I would have voted ``aye.''
  Mr. Speaker, on Rollcall No. 11, I would have voted ``aye.''


                          Personal Explanation

  Mr. ABERCROMBIE. Mr. Speaker, on January 27 and January 28, 2004, I 
was unavoidably unable to vote. Had I been present, I would have voted 
as follows:
  Rollcall 6, H.R. 1385, Postage Stamp to benefit breast cancer 
research, ``yes.''
  Rollcall 7, H.R. 3493, Medical Devices Technical Corrections Act, 
``yes.''
  Rollcall 8, Baldwin Substitute to S. 1920, federal bankruptcy law, 
``yes.''
  Rollcall 9, Motion to Recommit S. 1920, federal bankruptcy law, 
``yes.''
  Rollcall 10, Final Passage S. 1920, federal bankruptcy law, ``no.''

[[Page 625]]

  Rollcall 11, Motion to Instruct Conferees, ``yes.''


                          personal explanation

  Mr. RUPPERSBERGER. Mr. Speaker, I have interest in a company that 
does business with a financial institution that one way or another 
might be impacted by this legislation, so I have decided to vote 
present on S. 1920, the Bankruptcy Extension Act and the accompanying 
amendments and motions on January 28, 2004. This includes all rollcall 
votes starting at No. 8 until the end of the consideration of this 
measure. It also includes any motion to recommit and final passage.


                        Appointment of Conferees

  The SPEAKER pro tempore. Without objection, the Chair appoints the 
following conferees:
  From the Committee on the Judiciary, for consideration of the Senate 
bill and the House amendment, and modifications committed to 
conference:
  Messrs. Sensenbrenner, Hyde, Smith of Texas, Chabot, Cannon, Ms. 
Hart, and Messrs. Conyers, Boucher, Nadler and Watt.
  From the Committee on Financial Services, for consideration of 
sections 901-906, 908-909, 911, and 1301-1309 of the House amendment, 
and modifications committed to conference:
  Messrs. Oxley, Bachus and Sanders.
  There was no objection.

                          ____________________