[Congressional Record (Bound Edition), Volume 151 (2005), Part 1]
[Senate]
[Pages 1166-1251]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KENNEDY (for himself, Mr. Corzine, and Mr. Lautenberg):
  S. 224. A bill to extend the period for COBRA coverage for victims of 
the terrorist attacks of September 11, 2001; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. KENNEDY. Mr. President, one of the greatest domestic challenges 
facing our country today is the soaring cost of health care. It's a 
serious problem for millions of families. But when the chief income 
earner in a family suddenly becomes unemployed, the problem can be 
critical, and we give a helping hand. We give them the opportunity to 
continue their coverage through their employer for a reasonable period. 
Families who lost loved ones on September 11 deserve the same 
opportunity until they can land on their feet again.
  The Continuing Care for Recovering Families Act I am introducing 
today in the Senate with Senator Corzine and Senator Lautenberg, and 
Congressman Markey is introducing today in the House of 
Representatives, recognizes

[[Page 1167]]

that many of the September 11 families are still struggling to recover 
and we have an obligation to assist them.
  Some of the families have found ways to cover their health costs by 
purchasing private insurance or obtaining grant assistance on their 
own. For others, employers have agreed to provide coverage. For still 
other families, however, the safety net has fallen apart, because their 
coverage has expired under COBRA--the temporary low-cost continuation 
of coverage available under current Federal law for those who change 
their job, lose their job or for families that lose their chief income 
earner through death.
  The Continuing Care for Recovering Families Act will give spouses and 
children of victims of September 11 the ability to purchase or continue 
to purchase coverage under COBRA indefinitely, as long as they enroll 
within 120 days after passage of the Act or 120 days after they lose 
their COBRA coverage. Eligibility for the program would expire only if 
they become eligible for Medicare.
  The families of September 11 have shown great courage and 
extraordinary resilience. But we still have much more to do to help 
them on their long and arduous road to recovery, and I hope very much 
that we can pass this legislation this year. It will only affect a 
small number of families. But for them, it will make a world of a 
difference.
                                 ______
                                 
      By Mr. STEVENS (for himself, Mr. Inouye, and Ms. Murkowski):
  S. 225. A bill to direct the Secretary of the Interior to undertake a 
program to reduce the risks from and mitigate the effects of avalanches 
on recreational users of public land; to the Committee on Energy and 
Natural Resources.
  Mr. STEVENS. Mr. President, today I introduce, with Senators Inouye 
and Murkowski, the Federal Land Recreational Visitor Protection Act of 
2005.
  Across our State of Alaska, Western States, and areas of the 
Northeast, local governments and businesses struggle each year to 
remove potential avalanches or recover from the disastrous effects of 
avalanches.
  While such damage can bring hardships to many local communities, none 
can compare with the loss of a friend or family member. The U.S. 
averages over 20 deaths a year from avalanches, a majority of which are 
results of recreational activities in unmitigated avalanche areas. 
Earlier in January, 3 people were killed in two separate avalanches in 
northern Idaho and Utah, bringing the total number of people already 
killed in the U.S. this winter season to 16.
  Some States try and set aside money for rescues prior to the winter 
season, knowing that the resources required to clear all avalanche 
threats are not at hand.
  This bill brings those resources to the entities that need them the 
most, enabling us to significantly reduce the effects of avalanches on 
visitors, recreational users, transportation corridors, and our local 
communities.
                                 ______
                                 
      By Mr. DeWINE (for himself and Mrs. Clinton):
  S. 226. A bill to amend the Public Health Service Act to improve 
immunization rates by increasing the supply of vaccines; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. DeWINE. Mr. President, I rise today, along with my colleague from 
New York, Senator Clinton, to introduce the Improved Vaccine Supply 
Act--a bill that would help ensure that our Nation's public health 
system has an adequate vaccine supply.
  We all know that vaccinations are critical in our efforts to keep our 
population, particularly children and the elderly, healthy. They are 
key to protecting the elderly from influenza during flu season and 
protecting children from contracting polio or the mumps. Vaccinations, 
inoculations, immunizations--whatever you want to call them--also help 
lessen the threat of bacterial or viral infections and potential 
disease outbreaks.
  Currently, it is recommended that children receive 12 routine 
vaccinations against preventable diseases. These vaccinations are given 
in a series of shots and booster shots by the age of two, with an 
additional four doses later in life. This ends up being about 16 to 20 
doses of vaccines for children.
  Any shortage of vaccines is not acceptable, and we should do all we 
can to prevent any future shortage. As a Senator, and more importantly, 
as a parent of eight and grandparent of eight, I believe that nothing 
is more important than the health and safety of our children. While we 
are not currently experiencing a shortage, we know that the vaccine 
market is unstable and unpredictable. According to the Centers for 
Disease Control's National Immunization Program, there were several 
reasons for the shortages in past years. The CDC concluded and posted 
on its website that the ``reasons for these shortages were multi-
factorial and included companies leaving the vaccine market, 
manufacturing or production problems, and insufficient stockpiles.''
  The CDC did as good a job as it could, considering the vaccine 
shortages our Nation has faced in past years. The agency's website has 
posted information about shortages and released revised vaccine 
schedules to keep our public informed and knowledgeable about 
vaccination shortages. But, even with the strong efforts of the CDC, we 
need to work toward preventing a future vaccine shortage. We need a 
more permanent solution. The bill I am introducing will go a long way 
toward doing just that.
  The bill we are introducing today--the Improved Vaccine Supply Act--
would help bring some stability to our fragile vaccine supply. Unlike 
drug manufacturers, vaccine manufacturers do not have to give notice 
when they stop making a vaccine, whether the vaccine is withdrawn from 
the market intentionally or because the manufacturer is simply unable 
to continue making the vaccine. Essentially, these manufacturers leave 
the marketplace with no notice and no warning. Most doctors and 
hospitals--and more importantly parents and older adults--often have no 
idea that a vaccine is in short supply until they line up for a flu 
shot or go to the doctor for their child's immunizations.
  Our bill would change this. It would require any manufacturer of a 
vaccine to give a one-year notice of discontinuance. By giving notice, 
the Centers for Disease Control (CDC) and the Food and Drug 
Administration (FDA) would be better able to ensure an adequate vaccine 
supply for our Nation's population. Additionally, our bill would 
require all drug and vaccine manufacturers to give notice when they 
withdraw from the market. This change would ensure that we have a 
better sense of who is making vaccines and drugs and would allow the 
CDC and FDA to monitor the manufacturer's production and release of 
vaccines.
  Let me explain why this is important. Vaccines, or biological 
products, are difficult to develop and manufacture. They are more 
complex than drugs. Because of this, it takes longer for a biological 
product to reach the market. For example, a pharmaceutical company that 
manufactured tetanus vaccine stopped producing it, leaving only one 
company to produce tetanus vaccine for the entire country. The 
remaining company increased production to accommodate all of the needs 
of the United States. Despite this, it still required about 11 months 
for the vaccine to be ready for release. In other words, it took 11 
months for the company to ramp-up production to meet demand. Our bill 
would create a notification mechanism to capture those drugs and 
vaccines leaving the market so we can avoid future vaccine and drug 
shortages.
  Our bill also would require the Secretary, acting through the CDC, to 
develop a plan for the purchase, storage, and rotation of a supply of 
vaccines sufficient to provide routinely recommended vaccinations for a 
six-month period for children and adults. Essentially, it would create 
a framework for the CDC to develop a national vaccine stockpile to 
ensure that childhood vaccine shortages simply do not occur.

[[Page 1168]]

  Our children need and deserve timely vaccinations. When childhood 
vaccinations are in short supply or are unavailable, they do without, 
living unprotected against disease. That should never happen. The bill 
we are introducing today is another step toward ensuring that children 
get the vaccines they need and that they get them at the right time. I 
urge my colleagues to join me in support of this important public 
health legislation.
  I ask unanimous consent that the text the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 226

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Improved Vaccine Supply 
     Act''.

     SEC. 2. SUPPLY OF VACCINES.

       Title XXI of the Public Health Service Act (42 U.S.C. 
     300aa-1 et seq.) is amended by adding at the end the 
     following:

                 ``Subtitle 3--Adequate Vaccine Supply

     ``SEC. 2141. SUPPLY OF VACCINES.

       ``(a) In General.--
       ``(1) Plan.--Not later than 6 months after the date of 
     enactment of this section, the Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall develop a plan for the purchase, storage, and rotation 
     of a supply of vaccines sufficient to provide routinely 
     recommended vaccinations for a 6-month period for--
       ``(A) a national stockpile of vaccines for all children as 
     authorized under section 1928(d)(6) of the Social Security 
     Act (42 U.S.C. 1396s(d)(6)); and
       ``(B) adults.
       ``(2) Supply.--The supply of vaccines under paragraph (1) 
     shall--
       ``(A) include all vaccines routinely recommended for 
     children by the Advisory Committee on Immunization Practices; 
     and
       ``(B) include all vaccines routinely recommended for adults 
     by the Advisory Committee on Immunization Practices.
       ``(3) Supply authority.--The Secretary shall carry out--
       ``(A) paragraph (2)(A) using the authority provided for 
     under section 1928(d)(6) of the Social Security Act (42 
     U.S.C. 1396s(d)(6)); and
       ``(B) paragraph (2)(B) using--
       ``(i) the authority provided for under section 317; and
       ``(ii) any other authority relating to the vaccines 
     described in such paragraph.
       ``(b) Submission of Plan.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this section, the Secretary shall submit the 
     plan developed under subsection (a) to--
       ``(A) the Committee on Health, Education, Labor, and 
     Pensions of the Senate;
       ``(B) the Committee on Finance of the Senate; and
       ``(C) the Committee on Energy and Commerce of the House of 
     Representatives.
       ``(2) Inclusions.--The plan shall include a discussion of 
     the considerations that formed--
       ``(A) the basis for the plan; and
       ``(B) the prioritization of the schedule for purchasing 
     vaccines set forth in the plan.
       ``(c) Implementation of the Plan.--Not later than September 
     30, 2007, the Secretary shall fully implement the plan 
     developed under subsection (a).
       ``(d) Notice.--
       ``(1) In general.--For the purposes of maintaining and 
     administering the supply of vaccines described under 
     subsection (a), the Secretary shall require by contract that 
     the manufacturer of a vaccine included in such supply provide 
     not less than 1 year notice to the Secretary of a 
     discontinuance of the manufacture of the vaccine, or of other 
     factors, that may prevent the manufacturer from providing 
     vaccines pursuant to an arrangement made to carry out this 
     section.
       ``(2) Reduction of period of notice.--The notification 
     period required under paragraph (1) may be reduced if the 
     manufacturer certifies to the Secretary that good cause 
     exists for reduction, under the conditions described in 
     section 506C(b) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 356c).
       ``(e) Proceeds.--Any proceeds received by the Secretary 
     from the sale of vaccines contained in the supply maintained 
     pursuant to this section, shall be available to the Secretary 
     for the purpose of purchasing additional vaccines for the 
     supply. Such proceeds shall remain available until expended.
       ``(f) Ongoing Reports.--
       ``(1) In general.--Not later than 2 years after submitting 
     the plan pursuant to subsection (b), and periodically 
     thereafter, the Secretary shall submit a report to the 
     Committees identified in subsection (b)(1) that--
       ``(A) details the progress made in implementing the plan 
     developed under subsection (a); and
       ``(B) notes impediments, if any, to implementing the plan 
     developed under subsection (a).
       ``(2) Recommendation.--The Secretary shall include in the 
     first of such reports required under paragraph (1)--
       ``(A) a recommendation as to whether the vaccine supply 
     should be extended beyond the 6-month period provided in 
     subsection (a); and
       ``(B) a discussion of the considerations that formed the 
     recommendation under subparagraph (A).
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2006 
     through 2011.''.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Domenici):
  S. 229. A bill to clear title to certain real property in New Mexico 
associated with the Middle Rio Grande Project, and for other purposes; 
to the Committee on Energy and Natural Resources.
  Mr. BINGAMAN. Mr. President, today I am pleased to introduce the 
Albuquerque Biological Park Title Clarification Act with my colleague 
Senator Domenici. This bill, which passed the Senate in the 108th 
Congress, is necessary to assist the City of Albuquerque, NM clear 
title to two parcels of land located along the Rio Grande. If title is 
cleared, the City will be able to move forward with its plans to 
improve the properties as part of a Biological Park Project, a city 
funded initiative to create a premier environmental educational center 
for its citizens, and the entire State of New Mexico.
  The Biological Park Project has been in the works since 1987 when the 
City began to develop an aquarium and botanic garden along the banks of 
the Rio Grande. Those facilities constitute just a portion of the 
overall project. As part of this effort, in 1997, the City purchased 
two properties from the Middle Rio Grande Conservancy District (MRGCD) 
for $3,875,000. The first property, Tingley Beach, had been leased by 
the City from MRGCD since 1931 and used for public park purposes. The 
second property, San Gabriel Park, had been leased by the City since 
1963, and also used for public park purposes.
  In the year 2000, the City's plans were interrupted when the U.S. 
Bureau of Reclamation asserted that in 1953, it had acquired ownership 
of all of MRGCD's property associated with the Middle Rio Grande 
Project. The United States' assertion called into question the validity 
of the 1997 transaction between the City and MRGCD. Both MRGCD and the 
City dispute the United States' claim of ownership.
  This dispute is unnecessarily delaying and complicating the City's 
progress in developing the Biological Park Project. If the matter is 
simply left to litigation, the delay will be indefinite. Reclamation 
has already determined that the two properties are surplus to the needs 
of the Middle Rio Grande Project. Moreover, the record indicates that 
Reclamation had once considered releasing its interest in the 
properties for $1.00 each. Obviously, the federal interest in these 
properties is low while the local interest is high. This bill is 
narrowly tailored to address this local interest, affecting only the 
two properties at issue. The general dispute concerning title to 
project works is left for the courts to decide.
  I hope my colleagues will work with me to help resolve this issue. 
While much of what we do here in the Congress is complex and time-
consuming work, we should also have the ability to move quickly when 
necessary and appropriate to solve local problems caused by federal 
actions. I therefore urge my colleagues to support this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 229

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Albuquerque Biological Park 
     Title Clarification Act''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to direct the Secretary of the 
     Interior to issue a quitclaim deed conveying any right, 
     title, and interest the United States may have in and to 
     Tingley Beach or San Gabriel Park to the City, thereby 
     removing the cloud on the City's title to these lands.

     SEC. 3. DEFINITIONS.

       In this Act:

[[Page 1169]]

       (1) City.--The term ``City'' means the City of Albuquerque, 
     New Mexico.
       (2) Middle rio grande conservancy district.--The terms 
     ``Middle Rio Grande Conservancy District'' and ``MRGCD'' mean 
     a political subdivision of the State of New Mexico, created 
     in 1925 to provide and maintain flood protection and 
     drainage, and maintenance of ditches, canals, and 
     distribution systems for irrigation and water delivery and 
     operations in the Middle Rio Grande Valley.
       (3) Middle rio grande project.--The term ``Middle Rio 
     Grande Project'' means the works associated with water 
     deliveries and operations in the Rio Grande basin as 
     authorized by the Flood Control Act of 1948 (Public Law 80-
     858; 62 Stat. 1175) and the Flood Control Act of 1950 (Public 
     Law 81-516; 64 Stat. 170).
       (4) San gabriel park.--The term ``San Gabriel Park'' means 
     the tract of land containing 40.2236 acres, more or less, 
     situated within Section 12 and Section 13, T10N, R2E, 
     N.M.P.M., City of Albuquerque, Bernalillo County, New Mexico, 
     and described by New Mexico State Plane Grid Bearings 
     (Central Zone) and ground distances in a Special Warranty 
     Deed conveying the property from MRGCD to the City, dated 
     November 25, 1997.
       (5) Tingley beach.--The term ``Tingley Beach'' means the 
     tract of land containing 25.2005 acres, more or less, 
     situated within Section 13 and Section 24, T10N, R2E, 
     N.M.P.M., City of Albuquerque, Bernalillo County, New Mexico, 
     and described by New Mexico State Plane Grid Bearings 
     (Central Zone) and ground distances in a Special Warranty 
     Deed conveying the property from MRGCD to the City, dated 
     November 25, 1997.

     SEC. 4. CLARIFICATION OF PROPERTY INTEREST.

       (a) Required Action.--The Secretary of the Interior shall 
     issue a quitclaim deed conveying any right, title, and 
     interest the United States may have in and to Tingley Beach 
     and San Gabriel Park to the City.
       (b) Timing.--The Secretary shall carry out the action in 
     subsection (a) as soon as practicable after the date of 
     enactment of this title and in accordance with all applicable 
     law.
       (c) No Additional Payment.--The City shall not be required 
     to pay any additional costs to the United States for the 
     value of San Gabriel Park and Tingley Beach.

     SEC. 5. OTHER RIGHTS, TITLE, AND INTERESTS UNAFFECTED.

       (a) In General.--Except as expressly provided in section 4, 
     nothing in this Act shall be construed to affect any right, 
     title, or interest in and to any land associated with the 
     Middle Rio Grande Project.
       (b) Ongoing Litigation.--Nothing contained in this Act 
     shall be construed or utilized to affect or otherwise 
     interfere with any position set forth by any party in the 
     lawsuit pending before the United States District Court for 
     the District of New Mexico, No. CV 99-1320 JP/RLP-ACE, 
     entitled Rio Grande Silvery Minnow v. John W. Keys, III, 
     concerning the right, title, or interest in and to any 
     property associated with the Middle Rio Grande Project.
                                 ______
                                 
      By Mr. ROBERTS:
  S. 233. A bill to increase the supply of quality child care; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. ROBERTS. Mr. President, I am pleased and honored today to 
introduce the ``Caring for Children Act''--a bill designed to help meet 
the child care challenges facing families, child care providers and 
small businesses around the Nation.
  Child care, in the home when possible and outside the home when both 
parents work, goes right to the heart of keeping families strong. 
Unfortunately, finding quality, affordable child care is one of the 
most pressing problems for families in Kansas and around the country. 
It is estimated that quality child care can cost as much or more than 
college tuition in some areas.
  The ``Caring for Children Act'' takes the first steps in addressing 
this challenge through a responsible approach. This legislation expands 
child care opportunities without unnecessary government intervention or 
mandates. This legislation will help working families who want quality 
child care for their children, child care providers who aim to provide 
the highest quality of care, and small businesses who currently may not 
have the resources to provide child care for their employees.
  The ``Caring for Children Act'' recognizes that small businesses play 
a critical role in providing child care options to millions of working 
parents. Unfortunately, small businesses generally do not have the 
resources required to start up and support a child care center. This 
legislation includes a short-term, flexible grant program to encourage 
small businesses to work together or with established local child care 
organizations to provide child care services for employees. This 
program is more of a demonstration project that will sunset at the end 
of five years. In the meantime, small businesses will be eligible for 
grants up to $250,000 for start-up costs, training, scholarships, or 
other related activities. Businesses, however, will be required to 
match Federal funds to encourage self-sustaining facilities well into 
the future. Business must continue to meet State quality and health 
standards. In essence, this grant program takes the necessary steps to 
ensuring small businesses and other local organizations are able to 
work together to provide child care for employees.
  The ``Caring for Children Act'' also addresses another key component 
of quality child care: child care training. My bill creates a new grant 
program to allow organizations to develop and operate distance learning 
child care training infrastructures and to develop model technology-
based training courses for child care providers. These infrastructures 
and courses will enable child care providers to receive the training, 
education and support they need to improve the quality of child care. 
The ``Caring for Children Act'' encourages grantees to work with 
secondary schools, institutions of higher education, state and local 
governments, and child care organizations to promote networking, 
information sharing, and resource sharing. These grants will be 
targeted to those areas with the fewest training opportunities for 
child care providers.
  Child care is an issue that impacts each and every one of us. While 
parents continue to struggle to meet the constant demand of work and 
family, we must continue to do our part to expand child care options 
and protect our nation's most valuable resource, our children. I look 
forward to working with all of my colleagues in this important effort.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 233

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Caring for Children Act''.

         TITLE I--CHILD CARE TRAINING THROUGH DISTANCE LEARNING

     SEC. 101. GRANTS FOR THE DEVELOPMENT OF A CHILD CARE TRAINING 
                   INFRASTRUCTURE.

       (a) Authority to Award Grants.--The Secretary of Health and 
     Human Services shall award grants to eligible entities to 
     develop distance learning child care training technology 
     infrastructures and to develop model technology-based 
     training courses for child care providers and child care 
     workers, to be provided through distance learning programs 
     made available through the infrastructure. The Secretary 
     shall, to the maximum extent possible, ensure that such 
     grants are awarded in those regions of the United States with 
     the fewest training opportunities for child care providers.
       (b) Eligibility Requirements.--To be eligible to receive a 
     grant under subsection (a), an entity shall--
       (1) develop the technological and logistical aspects of the 
     infrastructure described in this section and have the 
     capability of implementing and maintaining the 
     infrastructure;
       (2) to the maximum extent possible, develop partnerships 
     with secondary schools, institutions of higher education, 
     State and local government agencies, and private child care 
     organizations for the purpose of sharing equipment, technical 
     assistance, and other technological resources, including--
       (A) developing sites from which individuals may access the 
     training;
       (B) converting standard child care training courses to 
     programs for distance learning; and
       (C) promoting ongoing networking among program 
     participants; and
       (3) develop a mechanism for participants to--
       (A) evaluate the effectiveness of the infrastructure, 
     including the availability and affordability of the 
     infrastructure, and the training offered through the 
     infrastructure; and
       (B) make recommendations for improvements to the 
     infrastructure.
       (c) Application.--To be eligible to receive a grant under 
     subsection (a), an entity shall submit an application to the 
     Secretary at such time and in such manner as the Secretary 
     may require, and that includes--

[[Page 1170]]

       (1) a description of the partnership organizations through 
     which the distance learning programs will be made available;
       (2) the capacity of the infrastructure in terms of the 
     number and type of distance learning programs that will be 
     made available;
       (3) the expected number of individuals to participate in 
     the distance learning programs; and
       (4) such additional information as the Secretary may 
     require.
       (d) Limitation on Fees.--No entity receiving a grant under 
     this section may collect fees from an individual for 
     participation in a distance learning program funded in whole 
     or in part under this section that exceed the pro rata share 
     of the amount expended by the entity to provide materials for 
     the program and to develop, implement, and maintain the 
     infrastructure (minus the amount of the grant awarded under 
     this section).
       (e) Rule of Construction.--Nothing in this section shall be 
     construed as requiring a child care provider to subscribe to 
     or complete a distance learning program made available under 
     this section.

     SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     title $50,000,000 for each of fiscal years 2006 through 2010.

TITLE II--REMOVAL OF BARRIERS TO INCREASING THE SUPPLY OF QUALITY CHILD 
                                  CARE

     SEC. 201. SMALL BUSINESS CHILD CARE GRANT PROGRAM.

       (a) Establishment.--The Secretary of Health and Human 
     Services (referred to in this section as the ``Secretary'') 
     shall establish a program to award grants to States, on a 
     competitive basis, to assist States in providing funds to 
     encourage the establishment and operation of employer 
     operated child care programs.
       (b) Application.--To be eligible to receive a grant under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including an assurance that the funds required under 
     subsection (e) will be provided.
       (c) Amount of Grant.--The Secretary shall determine the 
     amount of a grant to a State under this section based on the 
     population of the State as compared to the population of all 
     States receiving grants under this section.
       (d) Use of Funds.--
       (1) In general.--A State shall use amounts provided under a 
     grant awarded under this section to provide assistance to 
     small businesses located in the State to enable the small 
     businesses to establish and operate child care programs. Such 
     assistance may include--
       (A) technical assistance in the establishment of a child 
     care program;
       (B) assistance for the startup costs related to a child 
     care program;
       (C) assistance for the training of child care providers;
       (D) scholarships for low-income wage earners;
       (E) the provision of services to care for sick children or 
     to provide care to school aged children;
       (F) the entering into of contracts with local resource and 
     referral or local health departments;
       (G) assistance for care for children with disabilities; or
       (H) assistance for any other activity determined 
     appropriate by the State.
       (2) Application.--To be eligible to receive assistance from 
     a State under this section, a small business shall prepare 
     and submit to the State an application at such time, in such 
     manner, and containing such information as the State may 
     require.
       (3) Preference.--
       (A) In general.--In providing assistance under this 
     section, a State shall give priority to applicants that 
     desire to form a consortium to provide child care in a 
     geographic area within the State where such care is not 
     generally available or accessible.
       (B) Consortium.--For purposes of subparagraph (A), a 
     consortium shall be made up of 2 or more entities that may 
     include businesses, nonprofit agencies or organizations, 
     local governments, or other appropriate entities.
       (4) Limitation.--With respect to grant funds received under 
     this section, a State may not provide in excess of $250,000 
     in assistance from such funds to any single applicant.
       (e) Matching Requirement.--To be eligible to receive a 
     grant under this section a State shall provide assurances to 
     the Secretary that, with respect to the costs to be incurred 
     by an entity receiving assistance in carrying out activities 
     under this section, the entity will make available (directly 
     or through donations from public or private entities) non-
     Federal contributions to such costs in an amount equal to--
       (1) for the first fiscal year in which the entity receives 
     such assistance, not less than 50 percent of such costs ($1 
     for each $1 of assistance provided to the entity under the 
     grant);
       (2) for the second fiscal year in which the entity receives 
     such assistance, not less than 66\2/3\ percent of such costs 
     ($2 for each $1 of assistance provided to the entity under 
     the grant); and
       (3) for the third fiscal year in which the entity receives 
     such assistance, not less than 75 percent of such costs ($3 
     for each $1 of assistance provided to the entity under the 
     grant).
       (f) Requirements of Providers.--To be eligible to receive 
     assistance under a grant awarded under this section a child 
     care provider shall comply with all applicable State and 
     local licensing and regulatory requirements and all 
     applicable health and safety standards in effect in the 
     State.
       (g) State-level Activities.--A State may not retain more 
     than 3 percent of funds for State administration and other 
     State-level activities.
       (h) Administration.--
       (1) State responsibility.--A State shall have 
     responsibility for administering a grant awarded for the 
     State under this section and for monitoring entities that 
     receive assistance under such grant.
       (2) Audits.--A State shall require each entity receiving 
     assistance under the grant awarded under this section to 
     conduct an annual audit with respect to the activities of the 
     entity. Such audits shall be submitted to the State.
       (3) Misuse of funds.--
       (A) Repayment.--If the State determines, through an audit 
     or otherwise, that an entity receiving assistance under a 
     grant awarded under this section has misused the assistance, 
     the State shall notify the Secretary of the misuse. The 
     Secretary, upon such a notification, may seek from such an 
     entity the repayment of an amount equal to the amount of any 
     such misused assistance plus interest.
       (B) Appeals process.--The Secretary shall by regulation 
     provide for an appeals process with respect to repayments 
     under this paragraph.
       (i) Reporting Requirements.--
       (1) 2-year study.--
       (A) In general.--Not later than 2 years after the date on 
     which the Secretary first awards grants under this section, 
     the Secretary shall conduct a study to determine--
       (i) the capacity of entities to meet the child care needs 
     of communities within States;
       (ii) the kinds of partnerships that are being formed with 
     respect to child care at the local level to carry out 
     programs funded under this section; and
       (iii) who is using the programs funded under this section 
     and the income levels of such individuals.
       (B) Report.--Not later than 28 months after the date on 
     which the Secretary first awards grants under this section, 
     the Secretary shall prepare and submit to the appropriate 
     committees of Congress a report on the results of the study 
     conducted in accordance with subparagraph (A).
       (2) 4-year study.--
       (A) In general.--Not later than 4 years after the date on 
     which the Secretary first awards grants under this section, 
     the Secretary shall conduct a study to determine the number 
     of child care facilities funded through entities that 
     received assistance through a grant awarded under this 
     section that remain in operation and the extent to which such 
     facilities are meeting the child care needs of the 
     individuals served by such facilities.
       (B) Report.--Not later than 52 months after the date on 
     which the Secretary first awards grants under this section, 
     the Secretary shall prepare and submit to the appropriate 
     committees of Congress a report on the results of the study 
     conducted in accordance with subparagraph (A).
       (j) Definition.--In this section, the term ``small 
     business'' means an employer who employed an average of at 
     least 2 but not more than 50 employees on business days 
     during the preceding calendar year.
       (k) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated to 
     carry out this section, $50,000,000 for the period of fiscal 
     years 2006 through 2010.
       (2) Evaluations and administration.--With respect to the 
     total amount appropriated for such period in accordance with 
     this subsection, not more than $2,500,000 of that amount may 
     be used for expenditures related to conducting evaluations 
     required under, and the administration of, this section.
       (l) Termination of Program.--The program established under 
     subsection (a) shall terminate on September 30, 2011.
                                 ______
                                 
      By Mr. NELSON of Nebraska (for himself, Ms. Collins, Ms. 
        Cantwell, and Mrs. Murray):
  S. 236. A bill to amend title XVIII of the Social Security Act to 
clarify the treatment of payment under the medicare program for 
clinical laboratory tests furnished by critical access hospitals; to 
the Committee on Finance.
  Mr. NELSON of Nebraska. Mr. President. Today, I introduce legislation 
that will overturn a new regulation that is putting critical access 
hospitals (CAH) at risk by arbitrarily lowering the Medicare 
reimbursement for laboratory services. Sixty rural hospitals in 
Nebraska will be negatively impacted unless this regulation is 
reversed.

[[Page 1171]]

  This legislation would repeal a Center for Medicare and Medicaid 
Services' (CMS) regulation that would prohibit critical access 
hospitals from being reimbursed at-cost for laboratory services, unless 
patients are ``physically present in a critical access hospital'' when 
laboratory specimens are collected. Many CAHs provide laboratory 
services in rural health clinics (RHCs) and nursing homes in smaller, 
neighboring communities, as well as in home-health settings; however, 
the elimination of cost-based reimbursement may make it prohibitive for 
them to continue offering off-site laboratory testing. In short, under 
the new regulation, lab services would not be reimbursed by CMS unless 
the patient is at the facility where testing will occur.
  This change jeopardizes rural Americans' access to care by imposing 
an additional burden on the frail elderly by requiring them to visit 
the hospital to get simple lab tests done. The additional time and 
expense incurred by the patient is unnecessary if the CAR is willing 
and able to conduct tests at the point of patient care and transport it 
back to the hospital for analysis.
  Congress created the CAR program in 1997 to ensure that those in 
isolated, rural communities have access to health care. To protect the 
viability of these hospitals, often a community's only source of vital 
health care services, Congress established cost-based reimbursement for 
Medicare inpatient and outpatient services--regardless of where the 
services are provided. The new regulation would fundamentally alter 
this well-established practice.
  We have tried to work with CMS to change the rule. In November of 
2003, I was joined by 28 Senators in a bipartisan letter to the 
Administrator of CMS asking for his assistance in constructing a rule 
that does not penalize CAHs for offering off-site laboratory services. 
Unfortunately, CMS responded that the rule would stay intact.
  I am pleased to be joined in this effort by Senator Susan Collins. 
Senator Collins has been a strong advocate for rural health care, and I 
look forward to working together on this legislation.
  The Nebraska critical access hospitals affected by the regulation 
are:
  Harlan County Health System in Alma
  Fillmore County Hospital in Geneva
  Pawnee County Memorial Hospital in Pawnee City
  Niobrara Valley Hospital Corporation in Lynch
  Thayer County Health Services in Hebron
  Kimball County Hospital in Kimball
  Kearney County Health Services/Hospital in Minden
  Saunders County Health Services in Wahoo
  Henderson Health Care Services in Henderson
  Community Memorial Hospital in Syracuse
  Garden County Hospital & Nursing Home in Oshkosh
  Franklin County Memorial Hospital in Franklin
  Genoa Community Hospital in Genoa
  Gothenburg Memorial Hospital in Gothenburg
  Annie Jeffrey Memorial County Health Center in Osceola
  Brodstone Memorial Nuckolls County Hospital in Superior
  Webster County Community Hospital in Red Cloud
  Tilden Community Hospital in Tilden
  Morrill County Community Hospital in Bridgeport
  Jefferson Community Health Center in Fairbury
  Memorial Hospital in Aurora
  Oakland Memorial Hospital in Oakland
  St. Francis Memorial Hospital in West Point
  Alegent Health Memorial Hospital in Schuyler
  Nemaha County Hospital in Auburn
  Brown County Hospital in Ainsworth
  Antelope Memorial Hospital in Neligh
  Cozad Community Hospital in Cozad
  Litzenberg Memorial County Hospital in Central City
  Avera St. Anthony's Hospital in O'Neill
  Warren Memorial Hospital in Friend
  Creighton Area Health Services in Creighton
  Butler County Health Care Center in David City
  Rock County Hospital in Bassett
  Boone County Health Center in Albion
  Callaway District Hospital in Callaway
  York General Hospital in York
  Howard County Community Hospital in St. Paul
  Memorial Hospital CAH in Seward
  Dundy County Hospital in Benkelman
  Chadron Community Hospital Health Services in Chadron
  St. Mary's Hospital in Nebraska City
  West Holt Memorial Hospital in Atkinson
  Cherry County Hospital in Valentine
  Providence Medical Center in Wayne
  Plainview Public Hospital in Plainview
  Osmond General Hospital in Osmond
  Tri Valley Health System in Cambridge
  Pender Community Hospital in Pender
  Johnson County Hospital in Tecumseh
  Chase County Community Hospital in Imperial
  Community Medical Center in Falls City
  Valley County Hospital in Ord
  Crete Area Medical Center in Crete
  Ogallala Community Hospital in Ogallala
  Perkins County Health Services in Grant
  Memorial Health Center in Sidney
  Gordon Memorial Hospital District in Gordon
  Memorial Community Hospital in Blair
  Box Butte General Hospital in Alliance
                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 237. A bill to amend title 23, United States Code, to ensure that 
certain states remain eligible for Federal highway funds; to the 
Committee on Environment and Public Works.
  Mr. LAUTENBERG. Mr. President, I rise to introduce a bill to correct 
a serious problem in Federal law which prevents States like New Jersey 
from receiving vital Federal highway funds under certain conditions.
  On September 22, 2004, former New Jersey Governor James McGreevey 
issued an Executive Order that prohibited the State from entering into 
certain contracts. Governor McGreevey took this step to ensure fairness 
and transparency in the contracting process, and under current Federal 
laws, our State is being punished for it.
  Bush administration officials interpreted Federal law as prohibiting 
this type of action by New Jersey and consequently withheld 
authorization of Federal funding for highway projects in our State, 
putting some $250 million in highway projects at risk.
  I worked with Department of Transportation Secretary Norman Mineta in 
an attempt to resolve this problem quickly. Ultimately, Acting Governor 
Richard Codey reluctantly suspended the part of the Executive Order 
causing the problem. But since that's not really a permanent solution, 
I am introducing this legislation today.
  New Jersey's transportation infrastructure is vital to millions of 
travelers and the entire East Coast economy. It is estimated that some 
70 billion vehicle miles are traveled in New Jersey each year, but only 
6 million drivers are licensed in our State. In addition, projected 
increases in port traffic will put 80 percent more trucks on the roads 
in the next 15 years, which will exacerbate congestion and continue to 
tax our infrastructure.
  In short, I believe that New Jersey's good intentions should not cost 
our State the Federal highway funding we need so desperately.
  I thank my colleague and friend Senator Corzine for co-sponsoring 
this legislation, and I look forward to working with my colleagues in 
getting it enacted.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page 1172]]



                                 S. 237

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Pay to Play Reform 
     Protection Act''.

     SEC. 2. PAY TO PLAY REFORM.

       Section 112 of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(h) Construction.--Nothing in this section prohibits a 
     State from enacting a law or issuing an order that limits the 
     amount of money an individual who is doing business with a 
     State agency for a Federal-aid highway project may contribute 
     to a political campaign.''.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Wyden, Mr. McCain, Mrs. Feinstein, 
        and Mr. Feingold):
  S. 239. A bill to reduce the costs of prescription drugs for medicare 
beneficiaries, and for other purposes; to the Committee on Finance.
  Ms. SNOWE. Mr. President, Senator Wyden and I broke new ground 
together when we introduced the first bipartisan Medicare Prescription 
drug bill known as SPICE back in 1999. And after Congress passed the 
historic Medicare Modernization Act of 2003, Senator Wyden and I 
authored legislation aimed at ensuring long term value of the drug 
benefit to seniors. Today we are joined again by Senator Feinstein, who 
has been committed with us to forging a bipartisan effort to do what we 
must today--to move beyond offering a benefit and ensure that we meet 
our obligation to address affordability.
  When we consider both a recent ten year cost estimate of over $534 
billion for the prescription drug benefit, and drug price increases 
which have rapidly outpaced inflation and earnings, we could see the 
benefit to seniors depreciated--and the cost to the Federal Government 
increased. So today we introduce The Medicare Enhancements for Needed 
Drugs Act of 2005, MEND, today to manage costs, and assure seniors will 
receive better value for their dollar.
  This bill provides both better consumer information to help 
beneficiaries and the negotiation power to assure that the power of 
millions of seniors will result in competitive pricing. That is why two 
of our colleagues--Senators McCain and Feingold--have now joined us in 
this effort.
  Ours is a simple approach informed by a ``healthy dosage'' of common 
sense. It simply makes no sense to cut off the ability of the HHS 
Secretary--the individual who is responsible for the success of this 
benefit--from negotiating on behalf of beneficiaries. That's why our 
legislation repeals the ``noninterference provision'' of the 
prescription drug bill and authorizes the Secretary of Health and Human 
Services to participate in negotiations on drug prices. Last month when 
Secretary Thompson announced his departure from HHS, he described 
several issues of critical concern--one of these was that he had been 
barred from negotiating on behalf of beneficiaries. He noted, ``I would 
like to have had the opportunity to negotiate''. And for good reason! 
The Congressional Budget Office has confirmed that this negotiation 
authority can help us realize savings, particularly for drugs that lack 
significant competition.
  When Senator Gregg recently queried Secretary Leavitt about keeping 
the cost of the Part D program within the original $400 billion budget, 
and the Secretary asserted that ``It's my practice as a manager to act 
within my budget''. That will require competition, so I ask why 
wouldn't we employ negotiation to do what it does best--drive costs 
down? I asked Secretary Leavitt about negotiation at his confirmation 
hearing in the Finance Committee and he told me, ``I know little about 
negotiation authority, but there are times when the national government 
should play a role''. Well, that time is now. Senator Wyden and I have 
received our first report on drug price trends from the GAO, and the 
news isn't good. Since 2000, the increase in prescription drug prices 
has increase at two to three times the rate of inflation. And worse, we 
found the rate spiked in 2002, just as we were working to create a 
prescription drug benefit. It's no wonder that the Congressional Budget 
Office projects an annual increase of about 8.5 percent in costs, most 
of which can be attributed to the rise in prices. But we can address 
this problem, and avoid depreciating the value of this long sought 
benefit.
  To do so you must do more than simply end the prohibition on the 
Secretary negotiating, you must do more than simply granting permissive 
authority, you must actually ensure that when needed, the Secretary 
will negotiate.
  So our legislation will not only empower the HHS Secretary to 
negotiate but, under two circumstances, requires it. For those 
beneficiaries who do not have access to two prescription drug plans, 
the Secretary steps in with a fallback plan, and this plan must be 
competitive--so the Secretary must assure that he negotiates on behalf 
of those beneficiaries. In addition, the Secretary must be responsive 
to the needs of the plan providers. When a manufacturer simply is not 
inclined to negotiate--as may occur when competition for a drug is 
lacking--then the Secretary must respond when plans request his 
assistance in negotiations.
  Some will say this will compel excessive involvement by the 
Secretary, but the truth is quite to the contrary. Plans will compete 
to gain advantage, and it is when they are stymied and cannot achieve 
reasonable discounts that they will call upon the Secretary. CBO 
foresaw one such situation--when a drug lacks significant competition--
and those are among our most expensive drugs!
  The buying power of millions of seniors should produce substantial 
savings, but at the same time, competitive plans won't help if seniors 
cannot identify which plan is right for them.
  Senator Wyden and I believe we must arm beneficiaries with 
information. Our bill requires GAO to track not only the price of drugs 
under the Medicare program, but calls for that price to be compared to 
the price negotiated by the VA, DOD and other privately run systems. We 
will have a measure of how well the seniors are being served.
  This bill will also help seniors determine which Medicare plan offers 
the most savings by requiring that beginning in 2007 the Centers for 
Medicare and Medicaid Services will determine the savings received from 
each plan by the average Medicare beneficiary, using a market basket of 
commonly-used drugs. This will allow seniors to make the proverbial 
``apples to apples'' comparison. This information will be shared with 
all beneficiaries during the annual enrollment period each fall, and 
will be a great help as a starting point for seniors to compare plans.
  Our legislation will make annual the report Senator Wyden and I first 
requested following passage of the prescription drug bill in 2003. We 
asked the GAO to review changes in drug prices from 2000 through 2003, 
focusing on the drugs most likely to be used by seniors, and the 
results are in: Prescription drug prices have increased at two to three 
times the rate of inflation.
  Finally, many advocates and seniors alike have raised questions about 
the restriction of Medigap policies under the new Part D benefit. The 
prohibition of the sale of new Medigap policies which include 
prescription drug coverage has prompted the need for a re-examination 
of the role of Medigap plans. So we have directed the Secretary to work 
with the National Association of Insurance Commissioners to conduct a 
review of the changes to the Medigap policies and to evaluate the 
impact on Medicare beneficiaries. It is an important step in looking at 
the future of Medigap plans. With this report in hand, we will have the 
information necessary to make wise adjustments.
  Some say we don't need to act now. But we have seen drug price 
increases which are driving costs upwards--contributing to the 
estimated 8.5 percent annual increases in costs projected by CBO. We 
simply cannot wait until 2006 to address the issue of drug prices. This 
bill provides beneficiaries and our government with the information and 
tools necessary to achieve access to low-cost prescription drugs. I 
urge my colleagues to join me in support of this bill so that we can 
pass it quickly.
  Mr. WYDEN. Mr. President, Senator Snowe and I are once again teaming 
up

[[Page 1173]]

to work on a bipartisan commonsense proposal to help America's seniors 
receive affordable prescription drugs. Our bill, ``The Medicare 
Enhancement for Needed Drugs Act'' or ``MEND Act'' focuses on cost 
containment.
  At our request, the U.S. Government Accountability Office (GAO) 
recently reviewed drug cost trends. For 77 prescription drugs 
frequently used by seniors on Medicare the usual and customary price 
increased 21.8 percent from January 2000 through June 2004, a 4.6 
percent average annual rate of increase. They also found that the 
process for the brand drugs increased 26.4 percent for that same time 
period whereas prices for generic drugs increased 8.3 percent. We need 
to make sure that Medicare has every weapon in its arsenal to assure 
seniors and Medicare get the best deal possible on prescription drug 
prices.
  One of the most important tools for Medicare to use to assure better 
prescription drug prices for seniors is bargaining power. That tool is 
missing from the legislation Congress passed in 2003. The legislation 
that Senator Snowe and I are introducing today, the MEND Act, would 
provide the Secretary of Health and Human Services that tool. As 
responsible stewards of the taxpayers' money, Congress must provide 
Medicare all the tools, including bargaining power, in its cost 
containment arsenal.
  This concept was endorsed by the outgoing Secretary of Health and 
Human Services, Tommy Thompson. The Congressional Budget Office in a 
letter to me last March stated that striking the so-called ``non 
interference'' provision in the Medicare Prescription Drug Improvement 
and Modernization Act could provide opportunities for savings.
  In addition to providing the Secretary with bargaining power, the 
MEND Act will require the Secretary to negotiate on behalf of what are 
known as ``fall back'' plans, those plans that are provided when there 
is no choice of a drug plan and the company administering the benefit 
is not at risk. In addition, if any plan asks the Secretary for 
assistance in negotiations for any covered drug, the Secretary must 
assist the plan. Lower drug prices should mean lower premiums; lower 
out of pocket costs and a better benefit.
  America's seniors are savvy and they will shop around for a plan that 
is going to provide them the best deal on prescriptions. That is why 
the MEND Act also requires Medicare to provide a comparison of how much 
a plan is saving seniors on the cost of the most commonly used drugs. 
Giving seniors more control over their health care and health care 
dollars will also help keep costs down.
  Mrs. FEINSTEIN. Mr. President, I rise today to join my colleagues 
Senator Snowe, Senator Wyden and Senator McCain in introducing the 
bipartisan Medicare Enhancement for Needed Drugs, MEND, Act of 2005. 
This legislation is an important step toward controlling the spiraling 
cost of prescription drugs for America's seniors.
  The MEND Act addresses what I saw as a major weakness of the Medicare 
Modernization Act of 2003 when I voted for the bill. The Medicare 
Modernization Act offers an opportunity for the Federal Government via 
the Secretary of Health and Human Services to harness its bulk 
purchasing power to deliver lower drug prices for our seniors.
  However, the Medicare bill prohibits the HHS Secretary from doing 
just that.
  I have said several times that I would work to see that this 
prohibition on the HHS Secretary from negotiating with drug 
manufacturers be stricken and I was pleased that Secretary Tommy 
Thompson, upon announcing his departure as HHS Secretary, acknowledged 
publicly that he sought the negotiating power that this legislation 
provides. Secretary Thompson said, ``I would have liked to have had the 
opportunity to negotiate.''
  First and foremost the bill strikes the prohibition language in the 
Medicare bill, also called the noninterference provision.
  I strongly believe that the HHS Secretary should be given the 
authority similar to that of other Federal entities that purchase 
prescription drugs in bulk to negotiate prices with manufacturers of 
prescription drugs to ensure that beneficiaries pay the lowest possible 
price for their prescription drug plans.
  The CBO has told us that the effect of striking the 
``noninterference'' provision would have a ``negligible effect'' on 
federal spending. CBO's conclusion is based on their prediction that 
private plans will be able to obtain savings that will be greater than 
what the Secretary will be able to achieve and that simply striking 
this provision does not ensure that the Secretary will use the 
negotiation authority.
  Meanwhile, our seniors are being given no guarantee that private plan 
competition will mean lower drug prices for them. So while CBO makes 
this conclusion that private market forces will bring about savings, 
the federal government is forced to sit on the sidelines, unable to 
leverage its purchasing power to negotiate lower drug prices. The 
Federal Government cannot even participate in negotiations for 
prescription drug plans for which it assumes the risk.
  That is simply wrong and the MEND Act corrects this flaw in the 
Medicare bill.
  Second, if a future HHS Secretary does not agree with Secretary 
Thompson's view that he be given the opportunity to negotiate with drug 
manufacturers, there must be circumstances under which the Secretary is 
required by law to negotiate.
  The MEND Act mandates two scenarios under which the Secretary must 
negotiate with manufacturers. First, the Secretary must negotiate with 
manufacturers of covered Part D drugs for the fallback prescription 
drug plan.
  The ``fallback'' plan is a guaranteed drug benefit to beneficiaries 
living in areas where only one private plan, or none, shows up. In 
areas where a ``fallback'' prescription drug plan is triggered, the 
federal government must offer the standard drug benefit and assume 
performance risk. However, the Federal Government does not have a say 
in the prices manufacturers charge them in the ``fallback.''
  To ensure that the Federal Government achieves the lowest available 
price for enrollees in a ``fallback'' plan, the MEND Act requires that 
the Secretary negotiate drug prices in such plans.
  The MEND Act also requires the Secretary to participate in 
negotiations upon the request of an approved prescription drug plan or 
Medicare Advantage prescription drug plan.
  If the untested theory that private plans can achieve larger drug 
price discounts than the Secretary could negotiate proves to be false 
because the smaller insurers in the private market cannot achieve the 
savings larger, more established companies can, a company can petition 
the Secretary to negotiate with drug manufacturers on their behalf.
  So that seniors can make an ``apples to apples'' comparison when 
determining which drug plan offers them the most competitive drug 
prices, the bill requires that the Secretary of HHS determine the 
average aggregate beneficiary costs and savings basic prescription drug 
plans are able to achieve to better inform seniors about which plan 
might suit them best.
  I have heard concerns raised by many of my constituents about the 
impact the Medicare bill will have on their Medigap plans. This bill 
directs the HHS Secretary to work with the National Association of 
Insurance Commissioners to conduct a review of the changes to the 
Medigap policies in the new drug benefit for the purpose of evaluating 
its impact on Medicare beneficiaries.
  Lastly, the bill requires GAO to conduct a review of the retail cost 
of prescription drugs in the U.S. during 2000 through 2003 with an 
emphasis on the prescription drugs most utilized for individuals age 65 
or older. Subsequent reviews will be required annually through 2007.
  And, it requires GAO to conduct an annual study that compares the 
average retail cost in the U.S. for each of the 20 most utilized 
prescription drugs for individuals 65 or older with the average price 
at which private health

[[Page 1174]]

plans acquire each such drug, the average price at which the Department 
of Defense and Veterans Administration each acquire such drug, and the 
average negotiated price for each such drug that eligible beneficiaries 
enrolled in a prescription drug plan under Part D of Medicare pay.
  As someone who voted for the Medicare bill and has seen the cost 
estimate of that bill go from $400 billion to $534 billion and someone 
who is very concerned about the growth of entitlement spending, I 
believe that this bill will shed light on one of the big drivers of 
health care costs, the cost of prescription drugs.
  CBO projects that Americans over 65 will spend $1.8 trillion on 
prescription drugs over the next ten years. Recent studies of U.S. and 
Canadian drug-price comparisons show that, on average, prices charged 
by manufacturers, wholesalers, and retailers were higher in the U.S., 
most recently by about 70 percent.
  For example, an American consumer pays $62.99 for a 30-day supply of 
the popular cholesterol-lowering drug Lipitor. The same consumer in 
Canada is paying $35.42. For Prevacid, used to treat acid reflux, an 
American consumer pays $120.99 for a 30-day supply whereas a Canadian 
consumer pays $44.27.
  If we do not address the exorbitant costs of prescription drugs in 
this country today, we threaten the viability of programs like Medicare 
for future generations. I am pleased to join Senators Snowe, Wyden and 
McCain in the fight for lower prescription drug prices for our seniors.
  I urge my colleagues to join me in supporting this important 
legislation.
                                 ______
                                 
      By Mr. KERRY (for himself, Mr. Leahy, Mrs. Murray, Mr. 
        Rockefeller, Mr. Durbin, and Ms. Stabenow):
  S. 240. A bill to mend the Internal Revenue Code of 1986 to allow 
small business employers a credit against income tax with respect to 
employees who participate in the military reserve components and are 
called to active duty and with respect to replacement employees and to 
allow a comparable credit for activated military reservists who are 
self-employed, and for other purposes; to the Committee on Finance.
  Mr. KERRY. Mr. President, the continuing activation of military 
reservists to serve in Iraq and the war on terror has imposed a 
tremendous burden on many of our country's small businesses, their 
employees and their employees' families. Too many small businesses, 
when their employees are asked to leave their jobs and serve the 
Nation, are unable to continue operating successfully and face severe 
financial difficulties, even bankruptcy. At the same time, more than 40 
percent of military reservists and National Guard members suffer a pay 
cut when they're called to defend our Nation. Most large businesses 
have the resources to provide supplemental income to resist employees 
called up for active duty and to replace them with a temporary 
employee. However, too many small businesses are unable to provide this 
assistance (or temporarily replace the employee called up to active 
duty. I believe the Federal Government must take action to help small 
businesses weather the loss of an employee to active duty and protect 
small business employees and their families from suffering unnecessary 
financial hardship to serve our Nation. That is why I am again 
introducing legislation that will provide an immediate tax credit 
assist both military reservists who are called to active duty and the 
small businesses who must endure their absence.
  The Small Business Military Reservist Tax Credit Act that I am 
introducing today will provide immediate help to affected small 
businesses through a Federal income tax credit and a reduced 
withholding requirement to help pay the difference in salary for a 
reservist called up to active duty and the cost of temporarily 
replacing that employee while he or she is serving our Nation. 
Specifically, the bill will provide a tax credit of up to $21,000 to 
any very small business, defined as any business with up to 50 
employees, whose employee has been called up for active duty. Up to 
$15,000 for businesses that pay any difference in salary for the 
activated reservist and up to an additional $6,000 for the business to 
offset the cost of hiring a temporary replacement. For small 
manufacturers with up to 100 employees, the bill will provide a tax 
credit of up to $30,000, up to $20,000 for small manufacturers that pay 
all or part of the difference in salary for the reservist called to 
duty and up to $10,000 for small manufacturers to offset the cost of 
hiring a temporary replacement. This tax credit is critically necessary 
if we are to immediately help struggling entrepreneurs keep their small 
businesses running after the loss of an employee to temporary military 
service. Too many American small manufacturers are already facing a 
difficult economy and strong international competition. This 
legislation provides higher thresholds for small manufacturers because 
they need greater help and they employ more technical workers who 
typically command higher salaries and are more difficult to replace. It 
will also help cushion the financial cost of being a citizen solder for 
our reservists.
  To fight our wars and to meet our military responsibilities, the 
United States supplements its regular, standing military with 
reservists, citizen soldiers who serve nobly. Since 1973, the United 
States has built an all-volunteer military of which reservists are an 
essential part. Our reservists are much more than weekend warriors. 
When they are called to active duty, they are an essential ingredient 
of any long-term or significant deployment of American forces. Everyone 
knows the contributions our reservists have made in the Army, Navy, Air 
Force, Marines and Coast Guard. They have been serving our country with 
distinction and pride for many years and should not be penalized 
financially for their honorable service. The use of reservists is a 
significant way to reduce the costs of maintaining a standing army, and 
those costs, in lieu of having a critical reservist component, are far 
higher than the cost of providing the small, targeted tax credit 
offered by this legislation.
  Reservists have become a vital component of U.S. forces in Iraq and 
the war on terror. On September 14, 2001, President Bush issued 
Executive Order 13223 authorizing the activation of up to 1 million 
military reservists for up to 2 years of active duty. Since October 
2002, there has been a presidentially approved ceiling of 300,000 on 
the number of reservists that can be on duty at anyone time. Some 
475,000 reserves have been called up cumulatively since the issuance of 
the original Executive Order. Today, there are about 193,458 reserves 
on active duty in the war against terrorism. Of the approximately 
150,000 troops serving in Iraq, 40 percent are reserves. This number is 
expected to increase to approximately 50 percent in the near future as 
current troop deployments mobilize.
  Earlier this month, published reports showed that Lt. Gen. James R. 
Helmly, the Commander of the Reserve, has told Army Chief of Staff 
General Peter J. Schoomaker that the burdens placed on military 
reservists since the September 11, 2001 attacks, combined with 
dysfunctional Pentagon policies, have damaged morale and retention and 
threaten to turn the Army Reserve into a broken force. Lt. Gen. Helmly 
criticized Pentagon decisions to extend reservists tours in war zones, 
giving troops as little as 3 days' notice before mobilizations, and 
calling reservists to active duty after they had served and returned to 
civilian life. Such policies have strained the Army Reserve to the 
point that the 200,000 force could be unable to carry out future 
missions.
  Both the Army Reserve and National Guard have suffered shortfalls in 
recruitment because of the unpredictability, extended call-ups and stop 
loss policies associated with the Iraq war. National Guard officials 
said last month that the service must be overhauled.
  Everyone knows that small businesses continue to be a most effective 
at creating new jobs and spurring economic growth nationwide. Small 
businesses employ over 50 percent of the nation's workforce. 
Nationwide, small

[[Page 1175]]

businesses are currently creating 75 percent of new jobs. Furthermore, 
many of these small businesses provide quality goods and services that 
are a vital link in the supply chain for our national defense. Many of 
these small companies need immediate help to keep their business going 
while their employees are sacrificing for our country in Iraq and 
elsewhere.
  Many of our reservists left their companies in good shape. They were 
profitable, providing goods or services, creating jobs, adding to the 
tax base. Our Nation should do everything possible to ensure that upon 
their return, reservists and their businesses do not suffer unnecessary 
hardships, which range from impaired operations and financial ruin to 
deserted clients, layoffs, and even closure. Pedro Sotelo, a 33-year-
old veteran from Kansas City, MO, was a reservist for 9 years. From 
1997 to 2004 he was called up to active duty 10 times. Each time he was 
activated, he saw his income drop from $60,000 a year as a small 
business sheet metal worker to about $30,000 the Army paid him as a 
staff sergeant. While he was away serving his country, the bills would 
just keep pilling up. Eventually his credit rating plummeted. The 
continual financial strain contributed to the end of his first 
marriage, and after 9 years of service, Mr. Sotelo left the military to 
take a job selling cars. He is still recovering from the financial ruin 
created by his service, but I am happy to say that Mr. Sotelo has 
remarried and was recently promoted to manager at his dealership. Had 
the bill I introduce today been available for Staff Sergeant Sotelo, 
his small business employer could have kept his income steady and 
received a tax credit to cover half of the costs of doing so.
  Beyond the hardship of leaving their families, their homes and their 
regular employment, 41 percent of military reservists and National 
Guard members, like Staff Sergeant Sotelo, face a pay cut when they're 
called for active duty in our armed forces. Many of these reservists 
have families who depend upon that paycheck to survive and can least 
afford a substantial reduction in pay. Unlike many big businesses that 
can afford to provide supplemental income to make up for the salary 
disparity for military reservists called to active duty, most small 
businesses cannot afford to provide this benefit. This makes it more 
difficult for small businesses to attract and keep workers. I think it 
is imperative that we help families of reservists maintain their 
standard of living while their loved one serves our Nation. We must 
ensure that our great tradition of citizen soldiers does not fade or 
stop because of the effect service has on work and family.
  Back in 1999, I wrote the Military Reservist Small Business Relief 
Act, which was enacted into law during the 106th Congress and 
authorized the Small Business Administration (SBA) to defer existing 
loan repayments and to reduce the interest rates on direct loans that 
may be outstanding, including disaster loans, for small businesses that 
have had a military reservist called up for active duty. It also 
established a low-interest economic injury loan program administered by 
the SBA through its disaster loan program. These loans have been 
available to provide interim operating capital to any small business 
when the departure of a military reservist for active duty causes 
economic injury. However, in today's economy, many small businesses are 
unable to take on additional debt to continue their operations. These 
small businesses need immediate tax relief to assist them in hiring a 
replacement and to pay their reservist worker who is away serving our 
country.
  This bill will help every small business whose owner, manager or 
employee is called to active duty. Most immediately, this bill will 
assist those small businesses whose employees are in service in Iraq 
and elsewhere but the act also applies to future contingency 
operations, military conflicts, or national emergencies.
  By helping our reservists and the small businesses that employ them, 
we can ensure that our great tradition of citizen soldiers does not 
fade or stop because of the effect service has on work and family.
  I ask all my colleagues to support this important legislation to help 
both military reservists and the small businesses they are forced to 
leave when they are called up for active duty.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Rockefeller, Mr. Stevens, and Mr. 
        Inouye):
  S. 241. A bill to amend section 254 of the Communications Act of 1934 
to provide that funds received as universal service contributions and 
the universal service support programs established pursuant to that 
section are not subject to certain provisions of title 31, United 
States Code, commonly known as the Antideficiency Act; to the Committee 
on Commerce, Science, and Transportation.
  Ms. SNOWE. Mr. President, I rise today along with Senator Rockefeller 
and the distinguished Chairman and Ranking Member of the Committee on 
Commerce, Science, and Transportation, Senators Stevens and Inouye, to 
introduce legislation to safeguard the Universal Service Fund, or 
``USF,'' the institution that allows rural and low-income Americans to 
obtain affordable telephone service, allows America's schools and 
libraries to provide Internet access to all segments of society through 
the E-Rate program, and permits rural health care providers to obtain 
telecommunications and Internet services at reduced rates. The concept 
of Universal Service has been with us nearly as long as the telephone 
itself, and this bill today marks one key step in ensuring that this 
vital policy remains intact in the 21st Century.
  The legislation introduced today pertains specifically to the 
Universal Service Administration Company, or ``USAC,'' the private, 
nonprofit corporation that Congress created to administer the USF. This 
bill is very similar to S. 2994, a Universal Service bill that I 
introduced during the last session of Congress and that was passed 
right before adjournment as part of a larger telecommunications 
package, H.R. 5419. That bill temporarily exempted USAC from complying 
with new, arbitrarily-imposed accounting rules that had severely 
disrupted the E-Rate program and threatened to cause huge spikes in 
consumers' telephone bills. Many will recall that hundreds of millions 
of dollars in E-Rate funding for schools and libraries stayed unissued 
for months because of the accounting rule change, and immediate action 
was necessary to resolve the problem.
  According to USAC's Federal regulators, these new accounting rules 
needed to be imposed to ensure that the USF was compliant with the 
federal Anti-Deficiency Act, a law which prevents government agencies 
from incurring financial obligations beyond the amount that has been 
appropriated to them by Congress. However, USAC, in administering the 
USF, does not receive any appropriated funds from Congress. Rather, the 
USF is funded by a regular disbursement, on a more-or-less monthly 
basis, of monies derived from a surcharge placed on the revenue 
generated from interstate telephone calls. The existence of this 
predictable revenue stream negates any of the risks and concerns that 
the Anti-Deficiency Act was designed to prevent.
  After government accounting rules were imposed on USAC last summer, 
the entire E-Rate program was frozen. On the eve of the start of the 
school year, this program--which has enabled 93 percent of schools and 
libraries in the country to hook up to the Internet--was unable to 
review and act upon the funding recommendations of thousands of 
applicants. Many recipients of E-Rate funding actually shut off their 
Internet connections because they had no money available to maintain 
service. In order to alleviate this problem, Congress decided last fall 
to exempt the USF from the Anti-Deficiency Act for one year until a 
permanent solution to this problem was found. Senator Rockefeller and I 
decided to pursue a one-year exemption in order to ensure speedy 
passage of the legislation before adjournment, so that schools and 
libraries could receive their funding again. Today's legislation 
provides that permanent solution: a permanent exemption from the Anti-
Deficiency Act.

[[Page 1176]]

  Clear precedent exists for such an exemption. Numerous other federal 
programs already are exempt from complying with the Anti-Deficiency 
Act, including the National Park Service and the Conservation Trust. 
Moreover, an exemption is the rational solution to ensure that this 
problem does not continue to recur. As I previously mentioned, an 
exemption is particularly appropriate in this instance because the USF 
has a funding mechanism different from most federal programs. The USF 
functioned very well for many years utilizing the Generally Accepted 
Accounting Principles used by the entire American business world. 
Trying to engraft special government rules onto USF is akin to forcing 
a square peg into a round hole. And the result would be another 
stoppage in E-Rate--and likely the USF Rural High Cost Fund as well--
and also a spike in the USF surcharge on consumers' telephone bills.
  Finally, I want to ensure my colleagues that a permanent exemption 
from the Anti-Deficiency Act poses no risk of increased fraud or abuse 
in the E-Rate Program or in Universal Service as a whole. Some well-
publicized abuses of E-Rate did in fact occur, and I will fully support 
efforts to stamp out such government waste. But the Federal 
Communications Commission has repeatedly stated that there is 
absolutely no connection between the Anti-Deficiency Act land the 
ability of the Inspector General to effectively monitor the program to 
stamp out waste, fraud, and abuse. As such, government waste cannot be 
used as a valid reason for opposing this bill.
  Last fall we undertook a bipartisan effort among Members on the 
committees of jurisdiction in both Houses of Congress to enact a 
temporary exemption for the USF from unnecessary, burdensome 
regulations. In undertaking that effort we worked closely with the 
Federal Communications Commission, and enjoyed widespread support among 
the telecom industry, educators, and State and local governments. I am 
grateful of the continuing bipartisan support of the Chairman and 
Ranking Member, as well as of Senator Rockefeller, and it is my hope 
that we can proceed in similar fashion to make this exemption 
permanent.
                                 ______
                                 
      By Mrs. HUTCHISON (for herself and Mr. Cornyn):
  S. 242. A bill to establish 4 memorials to the Space Shuttle Columbia 
in the State of Texas; to the Committee on Energy and Natural 
Resources.
  Mrs. HUTCHISON. Mr. President, today in honor of the memory and 
sacrifice of seven astronauts whose lives were tragically cut short two 
years ago in the destruction of the Space Shuttle Columbia, I bring to 
the floor a bill to authorize the construction of several memorials in 
communities along the Space Shuttle Columbia Recovery Corridor; 
specifically, Lufkin, Hemphill, Nacogdoches, and San Augustine, TX.
  Each of these communities will memorialize the disaster and the 
indomitable spirit of adventure and courage, the spirit that defies 
complacency and accepts challenge, the spirit that each of these 
astronauts and each of these communities showed.
  This search for adventure turned space travel from dreams to a 
reality. It is this spirit of challenge which fueled the courage and 
ambition of seven men and women into the sky on January 6, 2003. It is 
also this same spirit that drives these communities to permanently 
commemorate the high price we sometimes pay for reaching new horizons.
  Hemphill, TX, where the nose cone of the Shuttle was found, is also 
where the remains of the crew were recovered. The VFW post in Hemphill 
fed thousands of volunteers for weeks without so much as a complaint or 
a dime. The men and women of Hemphill did not take their task lightly, 
but rather with a solemn grace and dignity.
  The greatest amount of debris came down in the populated areas of 
Nacogdoches, TX. Backyards and streets were littered with debris, 
permanently altering the community. The citizens of Nacogdoches pulled 
together and focused on the recovery, working day and night with NASA 
until the job was complete. A spirit of courage filled the community of 
Nacogdoches and their efforts should never be forgotten.
  The population of Lufkin, TX doubled overnight as the retrieval 
effort started. The community's residents welcomed thousands with 
hospitality and made their civic center NASA's Columbia retrieval 
command center. From combing the streets and fields for debris to 
making home cooked meals for the recovery workers, the people of Lufkin 
mustered around the Columbia tragedy.
  The citizens of San Augustine, TX were a driving force behind the 
recovery effort. Local elected officials and countless volunteers 
opened their hearts and their homes to strangers also affected by the 
tragedy. Searching the piney woods of deep east Texas on horseback and 
walking the streets in search of shuttle fragments, the spirit of San 
Augustine could not be crushed.
  In recent years, America has experienced grief with the loss of many 
heroes. But our collective loss with the Columbia tragedy still sears 
our souls and the pain is never easy to bear. Today, two years after 
they vanished into the deep blue skies of Texas, we pause to remember 
and honor Rick Husband, Kalpana Chawla, Laurel Clark, Ilan Roman, 
William McCool, David Brown, and Michael Anderson.
  And though the families' losses cannot be diminished, their pain and 
grief is shared around the world and our prayers are with them. This 
bill will memorialize their sacrifice and will honor the courageous 
spirit of the communities affected. Their sacrifices will never be 
forgotten.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 242

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Columbia Space Shuttle 
     Memorials Act of 2005''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Memorial.--The term ``memorial'' means each of the 
     memorials to the Space Shuttle Columbia established by 
     section 3(a).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Director of the National 
     Park Service.

     SEC. 3. MEMORIALS TO THE SPACE SHUTTLE COLUMBIA.

       (a) Establishment.--There are established, as units of the 
     National Park System, 4 memorials to the Space Shuttle 
     Columbia to be located on the 4 parcels of land in the State 
     of Texas described in subsection (b) on which large debris 
     from the Space Shuttle Columbia was recovered.
       (b) Description of Land.--The parcels of land referred to 
     in subsection (a) are--
       (1) the parcel of land owned by the Fredonia Corporation, 
     located at the southeast corner of the intersection of East 
     Hospital Street and North Fredonia Street, Nacogdoches, 
     Texas;
       (2) the parcel of land owned by Temple Inland Inc., 10 
     acres of a 61-acre tract bounded by State Highway 83 and 
     Bayou Bend Road, Hemphill, Texas;
       (3) the parcel of land owned by the city of Lufkin, Texas, 
     located at City Hall Park, 301 Charlton Street, Lufkin, 
     Texas; and
       (4) the parcel of land owned by San Augustine County, 
     Texas, located at 1109 Oaklawn Street, San Augustine, Texas.
       (c) Administration.--The memorials shall be administered by 
     the Secretary.
       (d) Additional Sites.--The Secretary may recommend to 
     Congress additional sites in the State of Texas related to 
     the Space Shuttle Columbia for establishment as memorials to 
     the Space Shuttle Columbia.
                                 ______
                                 
      By Mr. THOMAS:
  S. 243. A bill to establish a program and criteria for National 
Heritage Areas in the United States, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Mr. THOMAS. Mr. President, I rise today to introduce the ``National 
Heritage Partnership Act,'' a bill to establish a program and criteria 
for National Heritage Areas in the United States.
  Twenty-seven National Heritage Areas currently exist in this country, 
including 4 new areas designated in appropriations bills by the 108th 
Congress. Six occur in the State of Pennsylvania alone. They range in 
size from

[[Page 1177]]

a 10-mile canal in Augusta, GA, to the entire State of Tennessee. 
Specific areas are designated to recognize and preserve the cultural 
heritage of the oil industry, coal mining, the evolution of manned 
flight, and the Civil War, just to name a few. The National Park 
Service has responsibility for advising heritage area managers and 
providing Federal funds, but a formal process and criteria for 
designating new areas do not exist.
  State delegations are planning to introduce legislation to designate 
13 new National Heritage Areas and authorize studies on an additional 
5. Hundreds of State heritage areas currently exist and all could 
potentially become National Heritage Areas under the current process. 
This program is out of control. We are continuing to put unnecessary 
fiscal and resource demands on the National Park Service at a time when 
a significant maintenance backlog exists in park units throughout the 
Nation. We have no established criteria to ensure the recognition of 
truly nationally important areas.
  During the 108th Congress, the National Parks Subcommittee conducted 
two hearings on heritage areas and received a review from the General 
Accounting Office. My legislation combines the recommendations of the 
National Park Service, General Accounting Office, and witness testimony 
by establishing criteria such as national importance, creating a 
process for studying and reviewing new areas, requiring fiscal 
accountability and protecting the rights of property owners.
  This legislation is overdue. It provides a balanced approach to 
National Heritage Area designation, management, and oversight.
                                 ______
                                 
      By Ms. COLLINS (for herself, Ms. Cantwell, Ms. Snowe, Mrs. 
        Murray, Mr. Jeffords, and Mr. DeWine):
  S. 245. A bill to provide for the development and coordination of a 
comprehensive and integrated United States research program that 
assists the people of the United States and the world to understand, 
assess, and predict human-induced and natural processes of abrupt 
climate change; to the Committee on Commerce, Science, and 
Transportation.
  Ms. COLLINS. Mr. President, I rise to introduce the Abrupt Climate 
Change Research Act of 2005. This bill would authorize $10 million per 
year for the next six years for the National Oceanic and Atmospheric 
Administration, in partnership with universities across the Nation, to 
conduct research on abrupt climate change.
  The subject of climate change remains controversial. Nevertheless, I 
believe there is one issue on which almost everyone can agree: A great 
deal more scientific research is necessary in order to better 
understand the potential risk of abrupt climate change.
  Understanding and predicting climate change are enormous scientific 
challenges. The challenges are made even more difficult with the 
recognition that the climate system is capable of dramatic and abrupt 
changes. Scientists have determined that past global temperatures have 
swung as much as 20 deg. F within a decade, accompanied by drought in 
some places and catastrophic floods in other places. An abrupt climate 
change triggered by the ongoing buildup of greenhouse gases in the 
atmosphere would also likely result in the redistribution of 
atmospheric moisture and rainfall, with substantial impact on the 
world's food supplies. Unfortunately, we have no satisfactory 
understanding of what triggers abrupt climate changes.
  Both the National Academy of Sciences and the Administration's 
Strategic Climate Change Science Plan identify abrupt climate change as 
a key priority for additional research. In a 2002 report, the National 
Academy of Sciences stated that ``Large, abrupt climate changes have 
repeatedly affected much or all of the Earth.'' Furthermore, the report 
stated that ``abrupt climate changes are not only possible but likely 
in the future, potentially with large impacts on ecosystems and 
societies.'' The report noted that we're not doing nearly enough to 
identify even the threat of abrupt climate change. My bill would lay 
the framework and provide the funds for the United States to understand 
and address abrupt climate change.
  One reason this funding is so urgent is that we're rapidly losing one 
of the greatest sources of information: Ice cores from glaciers. The 
University of Maine's Climate Change Institute has one of the best 
abrupt climate change research programs in the world. The Climate 
Change Institute uses ice cores from glaciers and ice sheets around the 
world to make discoveries that change the way we think about climate 
change. Unfortunately, numerous glaciers around the world are melting; 
and when they go, we lose the very record that has given us so much of 
this critical climatic history.
  I recently had the opportunity to see for myself how scientists are 
able to use glaciers and ice sheets to understand climate change. In 
August, I traveled with Senators McCain, Sununu, and others to the 
northernmost community in the world. We visited Ny-Alesund on the 
Norwegian island of Spitsbergen. Located at 79 degrees north, Ny-
Alesund lies well north of the Arctic Circle and is much closer to the 
North Pole than to Oslo, the country's capital. It has even served as a 
starting point for several polar expeditions, although thankfully, 
Senator McCain did not include an attempt to reach the North Pole on 
our itinerary.
  The scientists we met with told us that the global climate is 
changing more rapidly now than at any time since the beginning of 
civilization. They further state that the region of the globe changing 
most rapidly is the Arctic. The changes are remarkable and disturbing.
  In the last 30 years, the Arctic has lost sea-ice cover over an area 
10 times as large as the State of Maine. In the summer, the change is 
even more dramatic, with twice as much ice loss. The ice that remains 
is as much as 40 percent thinner than it was just a few decades ago. In 
addition to disappearing sea-ice, Arctic glaciers are also rapidly 
retreating. In Ny-Alesund, Senator McCain and I witnessed massive 
blocks of ice falling off glaciers that had already retreated well back 
from the shores where they once rested.
  The melting of glaciers and sea ice, the thawing of permafrost, and 
the increases in sea levels resulting from warming are already 
beginning to cause environmental, social, and economic changes. Indeed, 
the social and economic disruption resulting from climate change is 
already evident in a number of regions throughout the Arctic, including 
Alaska. Some coastal communities in Alaska are facing increased 
exposure to storms and coastal erosion as a reduction in sea ice allows 
higher waves and storm surges to reach shore. In other areas, thawing 
ground is disrupting transportation, buildings, and other 
infrastructure. Some indigenous communities are already facing the 
prospect of relocating. If these changes were to be compounded with an 
abrupt climate change on the scale seen in our climatic history, the 
result could be devastating.
  I know that my colleague, the chairman of the Commerce Committee and 
senior Senator from Alaska, is very concerned about how Arctic climate 
changes are affecting his State. I know he recognizes that more 
research funding is necessary in order to understand future climate 
changes. I look forward to working with Chairman Stevens, Ranking 
Member Inouye, and other members of the Commerce Committee to address 
this extremely important issue in the 109th Congress.
  I am grateful to my cosponsors, Senators Cantwell, Snowe, Murray, 
Jeffords, and DeWine. I look forward to working with all of my 
colleagues over the coming months in order to address this important 
issue.
  Ms. SNOWE. Mr. President, I rise today to cosponsor the Abrupt 
Climate Change Research Act of 2005, legislation which will address the 
critical, comprehensive and integrated research needed for abrupt 
climate change. In the 108th, this legislation was passed by the Senate 
Commerce Committee. Its merits are just as pressing, if not more 
critical, for the 109th Congress as the legislation calls for 
developing and coordinating a research program over 6

[[Page 1178]]

years aimed at understanding, assessing, and predicting both human-
induced and natural processes of abrupt climate change.
  The abrupt climate change research issue is one that the Maine Senate 
delegation has been working on for the past 3\1/2\ years, the genesis 
of which goes back to a Climate Change Conference in Maine in October 
2001, which was attended by a wide array of stakeholders in the State 
who have been active in climate change issues for a number of years.
  I believe we all ought to be concerned by the picture scientific 
research is painting, which points to the reality and potential impact 
of abrupt shifts in climate. The December 2001 National Academy of 
Sciences report documented a growing body of scientific evidence that 
suggests our global climate can swing abruptly, not gradually over 
time. Moreover, such sudden jumps, and I quote from the Academies' 
report, ``are not only possible but likely in the future.''
  Rather than dismiss this, as some have, as the ``science de jour'' I 
prefer to take this as a serious warning, based on the best available 
evidence and analysis. The risk of complacency is to gamble immense 
environmental and societal consequences. That's why the NAS report 
urged that a new research program be initiated to examine the potential 
impact of a sudden change in climate in response to global warming. And 
that's also why, back in May of 2002, when NOAA's Admiral Lautenbacher 
was before the Commerce Committee testifying on NOAA's FY 2003 Budget, 
I raised the need for abrupt climate change studies, and the Admiral 
agreed this is a pressing priority. Since the introduction of the 
research bill in the 108th Congress, NOAA, in a January 15, 2004 
report, stated that calendar year 2003 tied 2002 as the 2nd warmest 
year on record.
  Mr. President, as co-chair of the independent International Climate 
Change Taskforce, I was pleased to disseminate to my colleagues the 
recently published Taskforce report, ``Meeting the Climate Challenge.'' 
The ICCT includes leaders from public service, science, business and 
civil society, from both developed and developing countries. Our goal 
was to find common ground through recommendations that could be helpful 
to all governments and policymakers worldwide for developing solutions 
to address climate change.
  Indeed, our first recommendation calls for a long-term objective to 
prevent global average temperature from rising more than 2 degrees 
Centigrade, or 3.6 degrees Fahrenheit, above the pre-industrial level 
by 2100. This target would limit the extent and magnitude of the 
impacts of climate change if all countries take various actions. I will 
ask unanimous consent to submit the ICCT's ten recommendations for the 
Record. In the upcoming weeks and months, I will be introducing 
legislation that reflects these public policy recommendations.
  The temperature goal is crucial to the debate on abrupt climate 
change because, if the earth goes beyond the 2 degree C level, 
scientists have suggested that risks to both ecosystems and humans 
increase significantly. As the risks of accelerated or--as our report 
stated--``runaway'' climate change increases, a ``tipping point'' could 
be reached that would include the loss of the West Antarctic and 
Greenland ice sheets, leading to the rise of sea levels.
  On this score, abrupt and paleoclimate research can greatly enhance 
the evolving body of scientific evidence, and that is why Senator 
Lautenberg and I spearheaded the effort last year to restore the FY2005 
National Oceanic and Atmospheric Administration, NOAA, research 
programs that will enable us to examine past climate change patterns. 
This information will guide the development of future models to assist 
both scientists and policymakers to improve their understanding of 
climate change through, for instance, the CORC-ARCHES program and 
paleo-
climate research. The University of Maine, under the direction of Dr. 
George Denton, has been part of the decades-long consortium that has 
been studying deep ocean currents in the Weddell Sea in Antarctica, and 
ice core samples from northern latitudes, which is helping scientists 
command a greater understanding of abrupt climate change.
  There have also been other, newer scientific reports that should give 
us great pause. Among those reports, the Arctic Climate Impact 
Assessment states, ``Arctic average temperature has risen at almost 
twice the rate as the rest of the world in the past few decades. 
Widespread melting of glaciers and sea ice and rising permafrost 
temperatures present additional evidence of strong arctic warming. 
These changes in the Arctic provide an early indication of the 
environmental and societal significance of global warming.''
  There is scientific observational evidence that indicates that 
regional changes in climate, particularly increases in temperature, are 
already affecting a diverse set of physical and biological systems in 
many parts of the world. Off the coast of Canada lies a 150-square 
mile, 100-foot thick mass of ice that has existed on the coast for 
3,000 years, but it is now disintegrating. That melting has been 
accelerating over the past 2 years. In addition, coral reefs, an 
irreplaceable marine resource around the world, are under tremendous 
stress as coral bleaching is induced by high water temperatures. 
Indeed, there are reports of a massive region-wide decline of coral 
which supports a huge variety of sea life across the entire Caribbean 
Basin.
  As we turn to the future, we should harbor no illusions that we are 
looking at a timetable measured in epochs. We are talking about tens of 
thousands of years. To the contrary, observed changes tell us that the 
snows of Kilimanjaro could vanish in 15 years, the glaciers in the 
Bolivian Andes that once appeared indestructible may disappear in 
another 10 years, and in Alaska, where the average temperature has 
risen almost 5 and one half degrees over the past 30 years, there is 
evidence of melting permafrost and dying forests.
  So my question is, what are we waiting for? Is this the kind of 
legacy we want to leave to future generations and the next millennium? 
Why not apply now the lessons of the past and present?
  Indeed, if ``past is prologue,'' and I believe it is, this bill will 
improve our understanding of climate change by calling for research to 
bolster existing, global records of past abrupt climate change, through 
the study of ice cores, for instance. In this manner we can improve 
scientific understanding of the mechanisms of abrupt climate change, 
and incorporate this knowledge into current scientific models. Even for 
those who question prevailing scientific opinion on the climate change 
issue, this bill should hold the appeal of increasing our stock of 
knowledge, wherever it may lead.
  In the final analysis, we need to carry out research that will allow 
us to gauge climate change secrets of the past, so we in turn might 
develop future models that will assist both scientists and policymakers 
in understanding climate change. The reality is, there is no doubt our 
global climate has changed in the past. There should similarly be no 
question that it would be beneficial to understand the manner in which 
that change has occurred and why, and so I urge my colleague's support 
for this legislation, and will work for its passage out of the Commerce 
Committee and to the Senate floor.
  I ask unanimous consent that the Summary of Main Recommendations be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    Summary of Main Recommendations

       1. A long-term objective be established to prevent global 
     average temperature from rising more than 2 deg.C (3.6 deg.F) 
     above the pre-
     industrial level, to limit the extent and magnitude of 
     climate-change impacts.
       2. A global framework be adopted that builds on the UNFCCC 
     and the Kyoto Protocol, and enables all countries to be part 
     of concerted action on climate change at the global level in 
     the post-2012 period, on the basis of equity and common but 
     differentiated responsibilities.

[[Page 1179]]


       3. G8 governments establish national renewable portfolio 
     standards to generate at least 25% of electricity from 
     renewable energy sources by 2025, with higher targets needed 
     for some G8 governments.
       4. G8 governments increase their spending on research, 
     development, and demonstration of advanced technologies for 
     energy-efficient and low- and zero-carbon energy supply by 
     two-fold or more by 2010, at the same time as adopting near-
     term strategies for the large-scale deployment of existing 
     low- and no-carbon technologies.
       5. The G8 and other major economies, including from the 
     developing world, form a G8+ Climate Group, to pursue 
     technology agreements and related initiatives that will lead 
     to large emissions reductions.
       6. The G8+ Climate Group agree to shift their agricultural 
     subsidies from food crops to biofuels, especially those 
     derived from cellulosic materials, while implementing 
     appropriate safeguards to ensure sustainable farming methods 
     are encouraged, culturally and ecologically sensitive land 
     preserved, and biodiversity protected.
       7. All developed countries introduce national mandatory 
     cap-and-trade systems for carbon emissions, and construct 
     them to allow for their future integration into a single 
     global market.
       8. Governments remove barriers to and increase investment 
     in renewable energy and energy efficient technologies and 
     practices through such measures as the phase-out of fossil 
     fuel subsidies and requiring Export Credit Agencies and 
     Multilateral Development Banks to adopt minimum efficiency or 
     carbon intensity standards for projects they support.
       9. Developed countries honour existing commitments to 
     provide greater financial and technical assistance to help 
     vulnerable countries adapt to climate change, including the 
     commitments made at the seventh conference of the parties to 
     the UNFCCC in 2001, and pursue the establishment of an 
     international compensation fund to support disaster 
     mitigation and preparedness.
       10. Governments committed to action on climate change raise 
     public awareness of the problem and build public support for 
     climate policies by pledging to provide substantial long-term 
     investment in effective climate communication activities.
                                 ______
                                 
      By Mr. BUNNING (for himself, Mr. Nelson of Nebraska, Mr. DeMint, 
        Mr. Craig, Mr. Inhofe, Mr. Brownback, Mr. Lugar, Mr. Santorum, 
        Mr. Coleman, and Mr. Domenici):
  S. 246. A bill to repeal the sunset of the Economic Growth and Tax 
Relief Reconciliation Act of 2001 with respect to the expansion of the 
adoption credit and adoption assistance programs; to the Committee on 
Finance.
  Mr. BUNNING. Mr. President, I rise today to introduce the Adoption 
Tax Relief Guarantee Act of 2005. This legislation will help American 
families break the financial barriers to successfully adopting a child, 
especially those children with special needs who cannot take care of 
themselves. By helping to ease this financial burden, we can encourage 
the development of more stable families and provide a brighter future 
for thousands of children.
  These important goals prompted us to act 4 years ago, when we passed 
adoption tax incentives in the 2001 tax bill. However, they are set to 
sunset and will expire on December 31, 2010. I believe it is essential 
that we support the American family and extend these provisions.
  This bill repeals the sunset for adoption tax credits. Specifically, 
this will allow those Americans who adopt a child to continue to 
receive a credit in the amount of their qualified expenses and 
guarantees the maximum $10,000 credit for those who adopt children with 
special needs. If we fail to act, these credits would revert to $5,000. 
This legislation also continues the expanded eligibility for adoption 
assistance programs for those earning up to $150,000, rather than 
allowing it to fall back to $75,000.
  I am pleased that a bipartisan group of Senators has cosponsored this 
legislation, and that it has been endorsed by the National Council for 
Adoption. Those children without parents and those parents without 
children need our help to bring them together. We owe it to them to act 
now.
                                 ______
                                 
      By Mr. DeMINT:
  S. 248. A bill to amend title 23, United States Code, to permit 
States to carry out surface transportation program projects on local 
roads to address safety concerns; to the Committee on Environment and 
Public Works.
  Mr. DeMINT. Mr. President, each State has unique road needs and 
different transportation priorities. In order to more effectively 
leverage limited dollars, State transportation agencies need increased 
flexibility to use Federal funds for projects identified as safety 
concerns.
  Currently, when an urgent need arises, a State must apply to the 
Secretary of Transportation for a waiver and fill out mountains of 
paperwork in order to transfer funds to critical priorities. We need to 
empower States to make their own decisions when it comes to meeting 
their most urgent safety needs.
  Today, I introduce legislation called the Surface Transportation 
Adaptability to Ensure Safety Act or ``STATES Act,'' which allows 
States to undertake a surface transportation project on any State-
maintained public road if the State determines that the project is 
necessary to address high fatality rates or other safety concerns.
  This bill empowers States, such as South Carolina, to respond to 
serious needs quickly, while also allowing them to make the most 
efficient use of the transportation dollars they receive. Under this 
legislation, a State can decide to use its Surface Transportation 
Program funding on a road functionally classified as a rural or minor 
collector without getting permission from Washington.
  No red tape. No Federal bureaucracy. Just a decision made at the 
local level by the people with the best understanding of the situation. 
It is time to bring safety decisions down to the local level and give 
each State the discretion to allocate funds to the most pressing safety 
concerns in its highway program.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 248

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Surface Transportation 
     Adaptability to Ensure Safety (STATES) Act of 2005''.

     SEC. 2. LOCATION OF SURFACE TRANSPORTATION PROGRAM PROJECTS.

        Section 133(c) of title 23, United States Code, is 
     amended--
       (1) by striking ``Except'' and inserting the following:
       ``(1) In general.--Except''; and
       (2) by adding at the end the following:
       ``(2) Safety projects.--Notwithstanding paragraph (1), a 
     State may undertake a surface transportation program project 
     on any State-maintained public road, including a road 
     functionally classified as a local or rural minor collector, 
     if the State determines that the project is necessary to 
     address high fatality rates or other safety concerns.''.
                                 ______
                                 
      By Mr. REID (for himself, Mr. Ensign, and Mr. Bennett):
  S. 249. A bill to establish the Great Basin National Heritage Route 
in the States of Nevada and Utah; to the Committee on Energy and 
Natural Resources.
  Mr. REID. Mr. President, I rise today for myself, Senator Ensign and 
Senator Bennett to introduce this bill, which will establish a National 
Heritage Route in eastern Nevada and western Utah.
  National Heritage areas, corridors, and routes are designated regions 
in which residents and businesses, as well as local and tribal 
governments join together in partnership to conserve and celebrate 
cultural heritage and special landscapes. The Great Basin National 
Heritage Route includes historic mining camps and ghost towns, Mormon 
and other pioneer settlements, as well as Native American communities. 
The Route passes through classic Great Basin country along the trails 
of the Pony Express and the Overland Stage. Cultural resources within 
the route include highly valued Native American archaeological sites 
dating back to the Fremont Culture.
  The creation of this Heritage Route will bring much deserved 
attention to the Great Basin's natural wonders. Passing through Millard 
County, UT, and parts of the Duckwater Reservation and White Pine 
County in Nevada, the Route contains items of great biological and 
geological interest. In Nevada, it encompasses forests of

[[Page 1180]]

bristlecone pine, the oldest living things on the earth. In Utah, the 
Route includes native Bonneville cutthroat trout as well as other 
distinctive species and ecological communities.
  Designation of the corridor as a Heritage Route will also ensure 
long-term protection of key educational and recreational opportunities 
without compromising traditional local use of the land. The Great Basin 
National Heritage Route will provide a framework for celebrating 
Nevada's and Utah's rich historic, archaeological, cultural, and 
natural resources for both visitors and residents.
  The bill will establish a board of directors consisting of local 
officials from both counties and tribes to manage the designated route. 
The board will develop a management plan within 3 years of the bill's 
passage, and the Secretary of the Interior will enter into a memorandum 
of understanding with the Board of Directors for the management of the 
resources of the heritage route. Our legislation authorizes up to $10 
million to carry out the Act but limits Federal funding to no more than 
50 percent of the project's cost. The bill allows the Secretary to 
provide assistance for 15 years after the bill is enacted.
  Our bill benefits not just the people of Nevada and Utah, but 
citizens of every State in our Union. It highlights an area of 
outstanding cultural and natural value and brings people together to 
celebrate common values and a common history of which we all can be 
proud.
  I was pleased that my distinguished colleagues recognized the value 
of this legislation during the 108th Congress and supported its passage 
by the Energy and Natural Resources Committee and by the Senate as a 
whole. I look forward to working with my friends to move this bill in a 
timely manner during the current session.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 249

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Great Basin National 
     Heritage Route Act''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the natural, cultural, and historic heritage of the 
     North American Great Basin is nationally significant;
       (2) communities along the Great Basin Heritage Route 
     (including the towns of Delta, Utah, Ely, Nevada, and the 
     surrounding communities) are located in a classic western 
     landscape that contains long natural vistas, isolated high 
     desert valleys, mountain ranges, ranches, mines, historic 
     railroads, archaeological sites, and tribal communities;
       (3) the Native American, pioneer, ranching, mining, timber, 
     and railroad heritages associated with the Great Basin 
     Heritage Route include the social history and living cultural 
     traditions of a rich diversity of nationalities;
       (4) the pioneer, Mormon, and other religious settlements, 
     and ranching, timber, and mining activities of the region 
     played and continue to play a significant role in the 
     development of the United States, shaped by--
       (A) the unique geography of the Great Basin;
       (B) an influx of people of Greek, Chinese, Basque, Serb, 
     Croat, Italian, and Hispanic descent; and
       (C) a Native American presence (Western Shoshone, Northern 
     and Southern Paiute, and Goshute) that continues in the Great 
     Basin today;
       (5) the Great Basin housed internment camps for Japanese-
     American citizens during World War II, 1 of which, Topaz, was 
     located along the Heritage Route;
       (6) the pioneer heritage of the Heritage Route includes the 
     Pony Express route and stations, the Overland Stage, and many 
     examples of 19th century exploration of the western United 
     States;
       (7) the Native American heritage of the Heritage Route 
     dates back thousands of years and includes--
       (A) archaeological sites;
       (B) petroglyphs and pictographs;
       (C) the westernmost village of the Fremont culture; and
       (D) communities of Western Shoshone, Paiute, and Goshute 
     tribes;
       (8) the Heritage Route contains multiple biologically 
     diverse ecological communities that are home to exceptional 
     species such as--
       (A) bristlecone pines, the oldest living trees in the 
     world;
       (B) wildlife adapted to harsh desert conditions;
       (C) unique plant communities, lakes, and streams; and
       (D) native Bonneville cutthroat trout;
       (9) the air and water quality of the Heritage Route is 
     among the best in the United States, and the clear air 
     permits outstanding viewing of the night skies;
       (10) the Heritage Route includes unique and outstanding 
     geologic features such as numerous limestone caves, classic 
     basin and range topography with playa lakes, alluvial fans, 
     volcanics, cold and hot springs, and recognizable features of 
     ancient Lake Bonneville;
       (11) the Heritage Route includes an unusual variety of open 
     space and recreational and educational opportunities because 
     of the great quantity of ranching activity and public land 
     (including city, county, and State parks, national forests, 
     Bureau of Land Management land, and a national park);
       (12) there are significant archaeological, historical, 
     cultural, natural, scenic, and recreational resources in the 
     Great Basin to merit the involvement of the Federal 
     Government in the development, in cooperation with the Great 
     Basin Heritage Route Partnership and other local and 
     governmental entities, of programs and projects to--
       (A) adequately conserve, protect, and interpret the 
     heritage of the Great Basin for present and future 
     generations; and
       (B) provide opportunities in the Great Basin for education; 
     and
       (13) the Great Basin Heritage Route Partnership shall serve 
     as the management entity for a Heritage Route established in 
     the Great Basin.
       (b) Purposes.--The purposes of this Act are--
       (1) to foster a close working relationship with all levels 
     of government, the private sector, and the local communities 
     within White Pine County, Nevada, Millard County, Utah, and 
     the Duckwater Shoshone Reservation;
       (2) to enable communities referred to in paragraph (1) to 
     conserve their heritage while continuing to develop economic 
     opportunities; and
       (3) to conserve, interpret, and develop the archaeological, 
     historical, cultural, natural, scenic, and recreational 
     resources related to the unique ranching, industrial, and 
     cultural heritage of the Great Basin, in a manner that 
     promotes multiple uses permitted as of the date of enactment 
     of this Act, without managing or regulating land use.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Great basin.--The term ``Great Basin'' means the North 
     American Great Basin.
       (2) Heritage route.--The term ``Heritage Route'' means the 
     Great Basin National Heritage Route established by section 
     4(a).
       (3) Management entity.--The term ``management entity'' 
     means the Great Basin Heritage Route Partnership established 
     by section 4(c).
       (4) Management plan.--The term ``management plan'' means 
     the plan developed by the management entity under section 
     6(a).
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Director of the National 
     Park Service.

     SEC. 4. GREAT BASIN NATIONAL HERITAGE ROUTE.

       (a) Establishment.--There is established the Great Basin 
     National Heritage Route to provide the public with access to 
     certain historical, cultural, natural, scenic, and 
     recreational resources in White Pine County, Nevada, Millard 
     County, Utah, and the Duckwater Shoshone Reservation in the 
     State of Nevada, as designated by the management entity.
       (b) Boundaries.--The management entity shall determine the 
     specific boundaries of the Heritage Route.
       (c) Management Entity.--
       (1) In general.--The Great Basin Heritage Route Partnership 
     shall serve as the management entity for the Heritage Route.
       (2) Board of directors.--The Great Basin Heritage Route 
     Partnership shall be governed by a board of directors that 
     consists of--
       (A) 4 members who are appointed by the Board of County 
     Commissioners for Millard County, Utah;
       (B) 4 members who are appointed by the Board of County 
     Commissioners for White Pine County, Nevada; and
       (C) a representative appointed by each Native American 
     Tribe participating in the Heritage Route.

     SEC. 5. MEMORANDUM OF UNDERSTANDING.

       (a) In General.--In carrying out this Act, the Secretary, 
     in consultation with the Governors of the States of Nevada 
     and Utah and the tribal government of each Indian tribe 
     participating in the Heritage Route, shall enter into a 
     memorandum of understanding with the management entity.
       (b) Inclusions.--The memorandum of understanding shall 
     include information relating to the objectives and management 
     of the Heritage Route, including--
       (1) a description of the resources of the Heritage Route;
       (2) a discussion of the goals and objectives of the 
     Heritage Route, including--

[[Page 1181]]

       (A) an explanation of the proposed approach to 
     conservation, development, and interpretation; and
       (B) a general outline of the anticipated protection and 
     development measures;
       (3) a description of the management entity;
       (4) a list and statement of the financial commitment of the 
     initial partners to be involved in developing and 
     implementing the management plan; and
       (5) a description of the role of the States of Nevada and 
     Utah in the management of the Heritage Route.
       (c) Additional Requirements.--In developing the terms of 
     the memorandum of understanding, the Secretary and the 
     management entity shall--
       (1) provide opportunities for local participation; and
       (2) include terms that ensure, to the maximum extent 
     practicable, timely implementation of all aspects of the 
     memorandum of understanding.
       (d) Amendments.--
       (1) In general.--The Secretary shall review any amendments 
     of the memorandum of understanding proposed by the management 
     entity or the Governor of the State of Nevada or Utah.
       (2) Use of funds.--Funds made available under this Act 
     shall not be expended to implement a change made by a 
     proposed amendment described in paragraph (1) until the 
     Secretary approves the amendment.

     SEC. 6. MANAGEMENT PLAN.

       (a) In General.--Not later than 3 years after the date of 
     enactment of this Act, the management entity shall develop 
     and submit to the Secretary for approval a management plan 
     for the Heritage Route that--
       (1) specifies--
       (A) any resources designated by the management entity under 
     section 4(a); and
       (B) the specific boundaries of the Heritage Route, as 
     determined under section 4(b); and
       (2) presents clear and comprehensive recommendations for 
     the conservation, funding, management, and development of the 
     Heritage Route.
       (b) Considerations.--In developing the management plan, the 
     management entity shall--
       (1) provide for the participation of local residents, 
     public agencies, and private organizations located within the 
     counties of Millard County, Utah, White Pine County, Nevada, 
     and the Duckwater Shoshone Reservation in the protection and 
     development of resources of the Heritage Route, taking into 
     consideration State, tribal, county, and local land use plans 
     in existence on the date of enactment of this Act;
       (2) identify sources of funding;
       (3) include--
       (A) a program for implementation of the management plan by 
     the management entity, including--
       (i) plans for restoration, stabilization, rehabilitation, 
     and construction of public or tribal property; and
       (ii) specific commitments by the identified partners 
     referred to in section 5(b)(4) for the first 5 years of 
     operation; and
       (B) an interpretation plan for the Heritage Route; and
       (4) develop a management plan that will not infringe on 
     private property rights without the consent of the owner of 
     the private property.
       (c) Failure to Submit.--If the management entity fails to 
     submit a management plan to the Secretary in accordance with 
     subsection (a), the Heritage Route shall no longer qualify 
     for Federal funding.
       (d) Approval and Disapproval of Management Plan.--
       (1) In general.--Not later than 90 days after receipt of a 
     management plan under subsection (a), the Secretary, in 
     consultation with the Governors of the States of Nevada and 
     Utah, shall approve or disapprove the management plan.
       (2) Criteria.--In determining whether to approve a 
     management plan, the Secretary shall consider whether the 
     management plan--
       (A) has strong local support from a diversity of 
     landowners, business interests, nonprofit organizations, and 
     governments associated with the Heritage Route;
       (B) is consistent with and complements continued economic 
     activity along the Heritage Route;
       (C) has a high potential for effective partnership 
     mechanisms;
       (D) avoids infringing on private property rights; and
       (E) provides methods to take appropriate action to ensure 
     that private property rights are observed.
       (3) Action following disapproval.--If the Secretary 
     disapproves a management plan under paragraph (1), the 
     Secretary shall--
       (A) advise the management entity in writing of the reasons 
     for the disapproval;
       (B) make recommendations for revisions to the management 
     plan; and
       (C) not later than 90 days after the receipt of any 
     proposed revision of the management plan from the management 
     entity, approve or disapprove the proposed revision.
       (e) Implementation.--On approval of the management plan as 
     provided in subsection (d)(1), the management entity, in 
     conjunction with the Secretary, shall take appropriate steps 
     to implement the management plan.
       (f) Amendments.--
       (1) In general.--The Secretary shall review each amendment 
     to the management plan that the Secretary determines may make 
     a substantial change to the management plan.
       (2) Use of funds.--Funds made available under this Act 
     shall not be expended to implement an amendment described in 
     paragraph (1) until the Secretary approves the amendment.

     SEC. 7. AUTHORITY AND DUTIES OF MANAGEMENT ENTITY.

       (a) Authorities.--The management entity may, for purposes 
     of preparing and implementing the management plan, use funds 
     made available under this Act to--
       (1) make grants to, and enter into cooperative agreements 
     with, a State (including a political subdivision), an Indian 
     tribe, a private organization, or any person; and
       (2) hire and compensate staff.
       (b) Duties.--In addition to developing the management plan, 
     the management entity shall--
       (1) give priority to implementing the memorandum of 
     understanding and the management plan, including taking steps 
     to--
       (A) assist units of government, regional planning 
     organizations, and nonprofit organizations in--
       (i) establishing and maintaining interpretive exhibits 
     along the Heritage Route;
       (ii) developing recreational resources along the Heritage 
     Route;
       (iii) increasing public awareness of and appreciation for 
     the archaeological, historical, cultural, natural, scenic, 
     and recreational resources and sites along the Heritage 
     Route; and
       (iv) if requested by the owner, restoring, stabilizing, or 
     rehabilitating any private, public, or tribal historical 
     building relating to the themes of the Heritage Route;
       (B) encourage economic viability and diversity along the 
     Heritage Route in accordance with the objectives of the 
     management plan; and
       (C) encourage the installation of clear, consistent, and 
     environmentally appropriate signage identifying access points 
     and sites of interest along the Heritage Route;
       (2) consider the interests of diverse governmental, 
     business, and nonprofit groups associated with the Heritage 
     Route;
       (3) conduct public meetings in the region of the Heritage 
     Route at least semiannually regarding the implementation of 
     the management plan;
       (4) submit substantial amendments (including any increase 
     of more than 20 percent in the cost estimates for 
     implementation) to the management plan to the Secretary for 
     approval by the Secretary; and
       (5) for any year for which Federal funds are received under 
     this Act--
       (A) submit to the Secretary a report that describes, for 
     the year--
       (i) the accomplishments of the management entity;
       (ii) the expenses and income of the management entity; and
       (iii) each entity to which any loan or grant was made;
       (B) make available for audit all records pertaining to the 
     expenditure of the funds and any matching funds; and
       (C) require, for all agreements authorizing the expenditure 
     of Federal funds by any entity, that the receiving entity 
     make available for audit all records pertaining to the 
     expenditure of the funds.
       (c) Prohibition on the Acquisition of Real Property.--The 
     management entity shall not use Federal funds made available 
     under this Act to acquire real property or any interest in 
     real property.
       (d) Prohibition on the Regulation of Land Use.--The 
     management entity shall not regulate land use within the 
     Heritage Route.

     SEC. 8. DUTIES AND AUTHORITIES OF FEDERAL AGENCIES.

       (a) Technical and Financial Assistance.--
       (1) In general.--The Secretary may, on request of the 
     management entity, provide technical and financial assistance 
     to develop and implement the management plan and memorandum 
     of understanding.
       (2) Priority for assistance.--In providing assistance under 
     paragraph (1), the Secretary shall, on request of the 
     management entity, give priority to actions that assist in--
       (A) conserving the significant archaeological, historical, 
     cultural, natural, scenic, and recreational resources of the 
     Heritage Route; and
       (B) providing education, interpretive, and recreational 
     opportunities, and other uses consistent with those 
     resources.
       (b) Application of Federal Law.--The establishment of the 
     Heritage Route shall have no effect on the application of any 
     Federal law to any property within the Heritage Route.

     SEC. 9. LAND USE REGULATION; APPLICABILITY OF FEDERAL LAW.

       (a) Land Use Regulation.--Nothing in this Act--
       (1) modifies, enlarges, or diminishes any authority of the 
     Federal, State, tribal, or local government to regulate by 
     law (including by regulation) any use of land; or
       (2) grants any power of zoning or land use to the 
     management entity.

[[Page 1182]]

       (b) Applicability of Federal Law.--Nothing in this Act--
       (1) imposes on the Heritage Route, as a result of the 
     designation of the Heritage Route, any regulation that is not 
     applicable to the area within the Heritage Route as of the 
     date of enactment of this Act; or
       (2) authorizes any agency to promulgate a regulation that 
     applies to the Heritage Route solely as a result of the 
     designation of the Heritage Route under this Act.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated to 
     carry out this Act $10,000,000, of which not more than 
     $1,000,000 may be made available for any fiscal year.
       (b) Cost Sharing.--
       (1) Federal share.--The Federal share of the cost of any 
     activity assisted under this Act shall not exceed 50 percent.
       (2) Form of non-federal share.--The non-Federal share may 
     be in the form of in-kind contributions, donations, grants, 
     and loans from individuals and State or local governments or 
     agencies.

     SEC. 11. TERMINATION OF AUTHORITY.

       The authority of the Secretary to provide assistance under 
     this Act terminates on the date that is 15 years after the 
     date of enactment of this Act.
                                 ______
                                 
      Mr. ENZI (for himself and Mr. Kennedy):
  S. 250. A bill to amend the Carl D. Perkins Vocational and Technical 
Education Act of 1998 to improve the Act; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. ENZI: Mr. President, I rise today to introduce the Carl D. 
Perkins Vocational and Technical Education Improvement Act of 2005. The 
Perkins Act, together with the Workforce Investment Act, the Higher 
Education Act, and other federal education and programs, provides 
important resources that are needed to help adequately prepare students 
of all ages for jobs in high-wage and highskilled occupations. It is 
part of a group of federal education and programs that are critical to 
a lifelong of learning. In this technology driven, global economy, 
school is never out. Everyone is a student who must adapt to the 
changing needs of their jobs and the workforce by continuing to pursue 
an education in their chosen field. In turn, Congress must ensure that 
education and training are connected to the needs of business, 
including small businesses, now and into the future.
  It is my hope that this body will take the necessary action to 
reauthorize the Carl D. Perkins Vocational and Technical Education Act. 
The Act works together with a combination of federal education and 
training programs that will strengthen our workforce and enable America 
to compete--and succeed--in the global economy.
  At a hearing held on June 24, 2004, before the Health, Education, 
Labor and Pensions Committee, members heard testimonies from leaders in 
career and technical training emphasizing the importance of constant 
training, retraining and upgrading of the skills today's jobs require. 
One of the things we learned at that hearing is that many students 
leaving high school or college and entering the workforce find 
themselves unprepared for life because they lack the skills they need 
to succeed in the workforce. This country created over 2 million new 
jobs since January 2001. That's great news. Unfortunately, the 
complaint heard from employers is that there are too few skilled 
workers to meet their needs. We have a strong interest in making sure 
this is corrected. The Perkins Act would provide both strong academic 
and relevant job skill training to promote and sustain the long-term 
competitiveness of this country.
  A unique aspect of the Perkins program that addresses the needs of 
the changing workforce is that it targets funds to both secondary and 
postsecondary schools. This approach provides a good platform from 
which we can better coordinate workforce preparation policy and 
training with an emphasis on lifelong learning. It is essential to 
facilitate a sequence of career or technical education courses that a 
student can complete before they even get to college, and that they can 
continue at the postsecondary level, whenever they decide to go on.
  This legislation introduced today is the result of a bipartisan 
process that began in the 108th Congress. I'm pleased to have worked 
with the Members of the Committee and stakeholders on a bipartisan bill 
that will improve the Perkins Act to better meet the needs of students, 
workers, and business. This legislation will help strengthen the 
Perkins program by improving accountability, involving businesses in 
career and technical education programs, emphasizing challenging 
academic instruction, and advancing the field of career and technical 
education by linking those programs to advances in industry.
  This legislation would also encourage greater collaboration between 
state agencies responsible for education and training activities. It 
requires state agencies to work together on identifying the needs of 
the workforce and designing curriculum to match those needs. It also 
emphasizes the needs of nontraditional students and other lifelong 
learners, who are returning to school for the first time, or those who 
are seeking additional skill training.
  This legislation also continues to emphasize the need to introduce 
women and girls to high skill, high wage jobs. It is important that we 
help expand the vision of our students to ensure they consider all the 
options that are available to them, not just the ones that fit general, 
and sometimes erroneous, conceptions.
  I hope our bipartisan efforts will continue to produce results as we 
move the bill through the Senate and into Conference. I do not wish to 
see another piece of bipartisan legislation lost in the legislative 
limbo of election year politics. An important step that the Senate must 
take is to appoint conferees to finish the reauthorization of the 
Workforce Investment Act. That program offers the resources that are 
needed to help adequately prepare more than 900,000 unemployed workers 
find work each year. It passed the Senate unanimously, both in 
Committee and the floor. Conferees must now be appointed before the 
August recess. If we are going to help workers in this country, we must 
send this important legislation to Conference so that it will 
ultimately reach the President and be signed into law.
  I cannot stress enough the importance of Federal initiatives like the 
Carl D. Perkins Vocational and Technical Education Act and the 
Workforce Investment Act to keep American workers and businesses 
competitive. The Perkins Act can help close the gap that threatens 
America's long-term competitiveness. It is essential that we take 
advantage of the opportunity we have during this reauthorization 
process to improve the link between education and relevant academic and 
skills preparation. By so doing, we will create a pathway to prosperity 
for American workers and businesses alike, that both will make good use 
of for years to come.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 250

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Carl D. 
     Perkins Career and Technical Education Improvement Act of 
     2005''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Purpose.
Sec. 4. Definitions.
Sec. 5. Transition provisions.
Sec. 6. Limitation.
Sec. 7. Authorization of appropriations.

    TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES

Sec. 101. Career and technical education assistance to the States.
Sec. 102. Reservations and State allotment.
Sec. 103. Within State allocation.
Sec. 104. Accountability.
Sec. 105. National activities.
Sec. 106. Assistance for the outlying areas.
Sec. 107. Native American program.
Sec. 108. Tribally controlled postsecondary career and technical 
              institutions.
Sec. 109. Occupational and employment information.
Sec. 110. State administration.
Sec. 111. State plan.
Sec. 112. Improvement plans.
Sec. 113. State leadership activities.

[[Page 1183]]

Sec. 114. Distribution of funds to secondary school programs.
Sec. 115. Distribution of funds for postsecondary career and technical 
              education programs.
Sec. 116. Special rules for career and technical education.
Sec. 117. Local plan for career and technical education programs.
Sec. 118. Local uses of funds.
Sec. 119. Tech-Prep education.

                      TITLE II--GENERAL PROVISIONS

Sec. 201. Redesignation of title.
Sec. 202. Fiscal requirements.
Sec. 203. Voluntary selection and participation.
Sec. 204. Limitation for certain students.
Sec. 205. Authorization of Secretary; participation of private school 
              personnel.
Sec. 206. Student assistance and other Federal programs.
Sec. 207. Table of contents.

     SEC. 2. REFERENCES.

       Except as otherwise expressly provided, wherever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Carl D. Perkins Vocational and 
     Technical Education Act of 1998 (20 U.S.C. 2301 et seq.).

     SEC. 3. PURPOSE.

       Section 2 (20 U.S.C. 2301) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (2) in paragraph (1), by striking ``standards'' and 
     inserting ``and technical standards, and to assist students 
     in meeting such standards, especially in preparation for high 
     skill, high wage, or high demand occupations in emerging or 
     established professions'';
       (3) in paragraph (2), by inserting ``challenging'' after 
     ``integrate'';
       (4) in paragraph (3), by striking ``and'' after the 
     semicolon;
       (5) in paragraph (4)--
       (A) by inserting ``conducting and'' before ``disseminating 
     national'';
       (B) by inserting ``disseminating information on best 
     practices,'' after ``national research,''; and
       (C) by striking the period at the end and inserting a 
     semicolon; and
       (6) by adding at the end the following:
       ``(5) promoting leadership and professional development at 
     the State and local levels, and developing research and best 
     practices for improving the quality of career and technical 
     education teachers, faculty, principals, administrators, and 
     counselors;
       ``(6) supporting partnerships among secondary schools, 
     postsecondary institutions, area career technical centers, 
     business and industry, professional associations, and 
     intermediaries; and
       ``(7) developing a highly skilled workforce needed to keep 
     America competitive in the global economy in conjunction with 
     other Federal education and training programs, including 
     workforce investment programs, that provide lifelong learning 
     for the workforce of today and tomorrow.''.

     SEC. 4. DEFINITIONS.

       Section 3 (20 U.S.C. 2302) is amended--
       (1) in paragraph (2), by inserting ``, including employment 
     statistics and information relating to national, regional, 
     and local labor market areas, as provided pursuant to section 
     118, and career ladder information, where appropriate'' after 
     ``to enter'';
       (2) in paragraph (3)--
       (A) in the paragraph heading, by striking ``vocational'' 
     and inserting ``career''; and
       (B) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (3) by striking paragraph (4);
       (4) by redesignating paragraphs (5) through (30) as 
     paragraphs (10) through (35), respectively;
       (5) by inserting after paragraph (3) the following:
       ``(4) Articulation agreement.--The term `articulation 
     agreement' means a written commitment, approved annually by 
     the relevant administrators of the secondary and 
     postsecondary institutions, to a program that is designed to 
     provide students with a nonduplicative sequence of 
     progressive achievement leading to technical skill 
     proficiency, a credential, a certificate, or a degree, and 
     linked through credit transfer agreements.
       ``(5) Career and technical education.--The term `career and 
     technical education' means organized educational activities 
     that--
       ``(A) offer a sequence of courses (which may include 
     technical learning experiences) that--
       ``(i) provides individuals with the challenging academic 
     and technical knowledge and skills the individuals need to 
     prepare for further education and for careers in emerging and 
     established professions; and
       ``(ii) may lead to technical skill proficiency, a 
     credential, a certificate, or a degree; and
       ``(B) include competency-based applied learning that 
     contributes to the academic knowledge, higher-order reasoning 
     and problem-solving skills, work attitudes, general 
     employability skills, technical skills, and occupation-
     specific skills, of an individual.
       ``(6) Career and technical education student.--The term 
     `career and technical education student' means a student who 
     enrolls in a clearly defined sequence of career and technical 
     education courses leading to attainment of technical skill 
     proficiency, a credential, a certificate, or a degree.
       ``(7) Career and technical student organization.--
       ``(A) In general.--The term `career and technical student 
     organization' means an organization for individuals enrolled 
     in a career and technical education program that engages in 
     career and technical education activities as an integral part 
     of the instructional program.
       ``(B) State and national units.--An organization described 
     in subparagraph (A) may have State and national units that 
     aggregate the work and purposes of instruction in career and 
     technical education at the local level.
       ``(8) Career guidance and academic counseling.--The term 
     `career guidance and academic counseling' means providing 
     access to information regarding career awareness and planning 
     with respect to an individual's occupational and academic 
     future that shall involve guidance and counseling with 
     respect to career options, financial aid, and postsecondary 
     options.
       ``(9) Career pathway.--The term `career pathway' means a 
     coordinated and nonduplicative sequence of courses (which may 
     include technical learning experiences) and associated 
     credits that--
       ``(A) shall identify both secondary and postsecondary 
     education elements;
       ``(B) shall include challenging academic and career and 
     technical education content;
       ``(C) may include the opportunity for secondary students to 
     participate in dual or concurrent enrollment programs or 
     other ways to acquire postsecondary credits; and
       ``(D) may culminate in technical skill proficiency, a 
     credential, a certificate, or a degree.'';
       (6) in paragraph (10) (as redesignated by paragraph (4) of 
     this section), by striking ``5206'' and inserting ``5210'';
       (7) by redesignating paragraphs (11) through (35) (as 
     redesignated by paragraph (4) of this section) as paragraphs 
     (12) through (36), respectively;
       (8) by inserting after paragraph (10) (as redesignated by 
     paragraph (4) of this section) the following:
       ``(11) Community college.--The term `community college'--
       ``(A) means an institution of higher education, as defined 
     in section 101 of the Higher Education Act of 1965, that 
     provides not less than a 2-year program that is acceptable 
     for full credit toward a baccalaureate degree; and
       ``(B) includes tribally controlled colleges or 
     universities.'';
       (9) in paragraph (12) (as redesignated by paragraph (7) of 
     this section)--
       (A) by striking ``method of instruction'' and inserting 
     ``method''; and
       (B) by striking ``vocational'' and inserting ``career'';
       (10) by redesignating paragraphs (13) through (36) (as 
     redesignated by paragraph (7) of this section) as paragraphs 
     (14) through (37), respectively;
       (11) by inserting after paragraph (12) the following:
       ``(13) Core academic subjects.--The term `core academic 
     subjects' has the meaning given the term in section 9101 of 
     the Elementary and Secondary Education Act of 1965, except 
     that under this Act such subjects included in such term shall 
     be only those subjects in a secondary school context.'';
       (12) in paragraph (16) (as redesignated by paragraph (10) 
     of this section), by striking ``vocational'' both places the 
     term appears and inserting ``career'';
       (13) in paragraph (17) (as redesignated by paragraph (10) 
     of this section)--
       (A) in subparagraph (A), by striking ``an institution of 
     higher education'' and inserting ``a public or nonprofit 
     private institution of higher education that offers career 
     and technical education courses that lead to technical skill 
     proficiency, an industry-recognized credential, a 
     certificate, or a degree''; and
       (B) in subparagraph (C), by striking ``vocational'' and 
     inserting ``career'';
       (14) in paragraph (18)(A) (as redesignated by paragraph 
     (10) of this section), by striking ``agency, an area 
     vocational'' and inserting ``agency (including a public 
     charter school that operates as a local educational agency), 
     an area career'';
       (15) by redesignating paragraphs (20) through (37) (as 
     redesignated by paragraph (10) of this section) as paragraphs 
     (21) through (38), respectively;
       (16) by inserting after paragraph (19) (as redesignated by 
     paragraph (10) of this section) the following:
       ``(20) Graduation and career plan.--The term `graduation 
     and career plan' means a written plan for a secondary career 
     and technical education student, that--
       ``(A) is developed with career guidance and academic 
     counseling or other professional staff, and in consultation 
     with parents, not later than in the first year of secondary 
     school or upon enrollment in career and technical education;
       ``(B) is reviewed annually and modified as needed;
       ``(C) includes relevant information on--

[[Page 1184]]

       ``(i) secondary school requirements for graduating with a 
     diploma;
       ``(ii) postsecondary education admission requirements; and
       ``(iii) high skill, high wage, or high demand occupations 
     and nontraditional fields in emerging and established 
     professions, and labor market indicators; and
       ``(D) states the student's secondary school graduation 
     goals, postsecondary education and training, or employment 
     goals, and identifies 1 or more career pathways that 
     correspond to the goals.'';
       (17) in paragraph (25) (as redesignated by paragraph (15) 
     of this section)--
       (A) in the paragraph heading, by striking ``training and 
     employment'' and inserting ``fields''; and
       (B) by striking ``training and employment'' and inserting 
     ``fields'';
       (18) in paragraph (26) (as redesignated by paragraph (15) 
     of this section), by striking ``the Commonwealth'' and all 
     that follows through the period and inserting ``and the 
     Commonwealth of the Northern Mariana Islands.'';
       (19) by redesignating paragraphs (31) through (38) (as 
     redesignated by paragraph (15) of this section) as paragraphs 
     (32) through (39), respectively;
       (20) by inserting after paragraph (30) (as redesignated by 
     paragraph (15) of this section) the following:
       ``(31) Self-sufficiency.--The term `self-sufficiency' means 
     a standard that is adopted, calculated, or commissioned by a 
     local area or State, and which adjusts for local factors, in 
     specifying the income needs of families, by family size, the 
     number and ages of children in the family, and sub-State 
     geographical considerations.'';
       (21) in paragraph (32) (as redesignated by paragraph (19) 
     of this section)--
       (A) in subparagraph (C), by striking ``training and 
     employment'' and inserting ``fields''; and
       (B) in subparagraph (F), by striking ``individuals with 
     other barriers to educational achievement, including'';
       (22) in paragraph (34) (as redesignated by paragraph (19) 
     of this section) by striking ``, and instructional aids and 
     devices'' and inserting ``instructional aids, and work 
     supports'';
       (23) by striking paragraph (35) (as redesignated by 
     paragraph (19) of this section) and inserting the following:
       ``(35) Tech-prep program.--The term `tech-prep program' 
     means a program of study that--
       ``(A) combines at a minimum 2 years of secondary education 
     (as determined under State law) with a minimum of 2 years of 
     postsecondary education in a nonduplicative, sequential 
     course of study;
       ``(B) integrates academic and career and technical 
     education instruction, and utilizes work-based and worksite 
     learning where appropriate and available;
       ``(C) provides technical preparation in a career field, 
     including high skill, high wage, or high demand occupations;
       ``(D) builds student competence in technical skills and in 
     core academic subjects, as appropriate, through applied, 
     contextual, and integrated instruction, in a coherent 
     sequence of courses;
       ``(E) leads to technical skill proficiency, a credential, a 
     certificate, or a degree, in a specific career field;
       ``(F) leads to placement in appropriate employment or to 
     further education; and
       ``(G) utilizes career pathways, to the extent 
     practicable.'';
       (24) in paragraph (37) (as redesignated by paragraph (19) 
     of this section)--
       (A) in the paragraph heading, by striking ``vocational'' 
     and inserting ``career'';
       (B) in the matter preceding subparagraph (A)--
       (i) by striking ``vocational'' and inserting ``career'';
       (ii) by striking ``paragraph (2)'' and inserting 
     ``subsection (a)(2)''; and
       (iii) by striking ``paragraph (5)(A)'' and inserting 
     ``subsection (a)(5)''; and
       (C) in subparagraph (F), by striking ``vocational'' and 
     inserting ``career''; and
       (25) by striking paragraphs (38) and (39) (as redesignated 
     by paragraph (19) of this section).

     SEC. 5. TRANSITION PROVISIONS.

       Section 4 (20 U.S.C. 2303) is amended by striking ``the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act'' and all that follows through the period and inserting 
     ``this Act, as this Act was in effect on the day before the 
     date of enactment of the Carl D. Perkins Career and Technical 
     Education Improvement Act of 2005. Each eligible agency shall 
     be assured a full fiscal year for transition to plan for and 
     implement the requirements of this Act.''.

     SEC. 6. LIMITATION.

       Section 6 (20 U.S.C. 2305) is amended by striking the 
     second sentence.

     SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

       Section 8 (20 U.S.C. 2307) is amended--
       (1) by striking ``title II'' and inserting ``part D of 
     title I''; and
       (2) by striking ``1999 through 2003'' and inserting ``2006 
     through 2011''.

    TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES

     SEC. 101. CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE 
                   STATES.

       Title I (20 U.S.C. 2321 et seq.) is amended by striking the 
     title heading and inserting the following:

 ``TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES''.

     SEC. 102. RESERVATIONS AND STATE ALLOTMENT.

       Section 111(a) (20 U.S.C. 2321(a)) is amended--
       (1) in paragraph (1)(C), by striking ``2001 through 2003,'' 
     and inserting ``2006 through 2011, not more than'';
       (2) in paragraph (2), in the matter preceding subparagraph 
     (A), by striking ``paragraph (1)'' and inserting ``paragraph 
     (1), that are not allotted under paragraph (5),'';
       (3) in paragraph (3)--
       (A) in subparagraph (B), by striking ``(or in the case'' 
     and all that follows through ``1998)''; and
       (B) in subparagraph (C)--
       (i) in clause (i)(I), by striking ``(or in the case'' and 
     all that follows through ``1998)''; and
       (ii) in clause (ii)(II), by striking ``(or in the case'' 
     and all that follows through ``1998)''; and
       (4) by adding at the end the following:
       ``(5) Formula for amounts in excess of the fiscal year 2005 
     funding level.--
       ``(A) In general.--For any fiscal year for which the 
     remainder of the sums appropriated under section 8 and not 
     reserved under paragraph (1) exceeds the remainder of the 
     sums appropriated under section 8 and not reserved under 
     paragraph (1) for fiscal year 2005, such excess amount shall 
     be allotted to the States according to the formula under 
     subparagraphs (A) through (D) of paragraph (2).
       ``(B) Minimum allotment.--
       ``(i) In general.--Notwithstanding any other provision of 
     law and subject to clause (ii), no State shall receive for a 
     fiscal year under this paragraph less than \1/2\ of 1 percent 
     of the excess amount described in subparagraph (A).
       ``(ii) Requirement.--No State, by reason of the application 
     of clause (i), shall be allotted under this paragraph for a 
     fiscal year more than the amount determined by multiplying--

       ``(I) the number of individuals in the State counted under 
     paragraph (2); by
       ``(II) 185 percent of the national average per pupil 
     payment made with the excess amount described in subparagraph 
     (A) for that year.''.

     SEC. 103. WITHIN STATE ALLOCATION.

       Section 112 (20 U.S.C. 2322) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by adding ``and'' after the 
     semicolon; and
       (B) by striking paragraphs (2) and (3) and inserting the 
     following:
       ``(2) not more than 15 percent for--
       ``(A) State leadership activities described in section 124, 
     of which--
       ``(i) an amount determined by the eligible agency shall be 
     made available to serve individuals in State institutions, 
     such as State correctional institutions and institutions that 
     serve individuals with disabilities; and
       ``(ii) not less than $60,000 shall be available for 
     services that prepare individuals for nontraditional fields; 
     and
       ``(B) administration of the State plan, which may be used 
     for the costs of--
       ``(i) developing the State plan;
       ``(ii) reviewing the local plans;
       ``(iii) monitoring and evaluating program effectiveness;
       ``(iv) assuring compliance with all applicable Federal 
     laws;
       ``(v) providing technical assistance; and
       ``(vi) supporting and developing State data systems 
     relevant to the provisions of this Act.'';
       (2) in subsection (b), by striking ``subsection (a)(3)'' 
     both places the term appears and inserting ``subsection 
     (a)(2)(B)''; and
       (3) by striking subsection (c) and inserting the following:
       ``(c) Reserve.--From amounts made available under 
     subsection (a)(1) to carry out this subsection, an eligible 
     agency may--
       ``(1) award grants to eligible recipients, or consortia of 
     eligible recipients, for career and technical education 
     activities described in section 135 in--
       ``(A) rural areas; or
       ``(B) areas with high percentages or high numbers of career 
     and technical education students;
       ``(2) reserve funds, with the approval of participating 
     eligible recipients, for--
       ``(A) innovative statewide initiatives that demonstrate 
     benefits for eligible recipients, which may include--
       ``(i) developing and implementing technical assessments;
       ``(ii) improving the professional development of career and 
     technical education teachers, faculty, principals, and 
     administrators; and
       ``(iii) establishing, enhancing, and supporting systems for 
     accountability data collection or reporting purposes; or
       ``(B) the development and implementation of career pathways 
     or career clusters; and
       ``(3) carry out activities described in paragraphs (1) and 
     (2).''.

     SEC. 104. ACCOUNTABILITY.

       Section 113 (20 U.S.C. 2323) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';

[[Page 1185]]

       (2) in subsection (a)--
       (A) by striking ``a State performance accountability 
     system'' and inserting ``and support State and local 
     performance accountability systems''; and
       (B) by inserting ``and its eligible recipients'' after ``of 
     the State'';
       (3) in subsection (b)--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``paragraph (2)(A)'' 
     and inserting ``subparagraphs (A) and (B) of paragraph (2)''; 
     and
       (ii) in subparagraph (B), by striking ``(2)(B)'' and 
     inserting ``(2)(C)'';
       (B) in paragraph (2)--
       (i) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Core indicators of performance for secondary career 
     and technical education students.--Each eligible agency shall 
     identify in the State plan core indicators of performance for 
     secondary career and technical education students that 
     include, at a minimum, measures of each of the following:
       ``(i) Student achievement on technical assessments and 
     attainment of career and technical skill proficiencies that 
     are aligned with nationally recognized industry standards, if 
     available and appropriate.
       ``(ii) Student attainment of challenging academic content 
     standards and student academic achievement standards, as 
     adopted by the State under section 1111(b)(1) of the 
     Elementary and Secondary Education Act of 1965 and measured 
     by the academic assessments described in section 1111(b)(3) 
     of such Act, consistent with State requirements.
       ``(iii) Student rates of attainment of--

       ``(I) a secondary school diploma;
       ``(II) the recognized equivalent of a secondary school 
     diploma;
       ``(III) technical skill proficiency;
       ``(IV) a credential;
       ``(V) a certificate; and
       ``(VI) a degree.

       ``(iv) Placement in postsecondary education, military 
     service, apprenticeship programs, or employment.
       ``(v) Student participation in, and completion of, career 
     and technical education programs that lead to employment in 
     nontraditional fields.'';
       (ii) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively;
       (iii) by inserting after subparagraph (A) the following:
       ``(B) Core indicators of performance for postsecondary 
     career and technical students.--Each eligible agency shall 
     identify in the State plan core indicators of performance for 
     postsecondary career and technical education students that 
     include, at a minimum, measures of each of the following:
       ``(i) Student achievement on technical assessments and 
     attainment of career and technical skill proficiencies that 
     are aligned with nationally recognized industry standards, if 
     available and appropriate.
       ``(ii) Student attainment of technical skill proficiency, a 
     credential, a certificate, or a degree, or retention in 
     postsecondary education, including transfer to a 
     baccalaureate degree program.
       ``(iii) Placement in military service, apprenticeship 
     programs, or employment.
       ``(iv) Student participation in, and completion of, career 
     and technical education programs that lead to employment in 
     nontraditional fields.
       ``(v) Increase in earnings, where available.'';
       (iv) in subparagraph (C) (as redesignated by clause (ii) of 
     this subparagraph), by striking ``the title.'' and inserting 
     ``this title, such as attainment of self-sufficiency.'';
       (v) in subparagraph (D) (as redesignated by clause (ii) of 
     this subparagraph), by inserting ``career and technical 
     education'' after ``developed State'';
       (vi) in subparagraph (E) (as redesignated by clause (ii) of 
     this subparagraph)--

       (I) by striking ``this paragraph'' and inserting 
     ``subparagraphs (A) and (B)''; and
       (II) by striking ``recipients.'' and inserting 
     ``recipients, and shall meet the requirements of this 
     section.''; and

       (vii) by adding at the end the following:
       ``(F) Alignment of performance indicators.--In the course 
     of identifying core indicators of performance and additional 
     indicators of performance, States shall, to the greatest 
     extent possible, define the indicators so that substantially 
     similar information gathered for other State and Federal 
     programs, or any other purpose, is used to meet the 
     requirements of this section.'';
       (C) in paragraph (3)--
       (i) in the paragraph heading, by striking ``Levels'' and 
     inserting ``State levels'';
       (ii) in subparagraph (A)--

       (I) in clause (i)--

       (aa) by striking ``paragraph (2)(A)'' and inserting 
     ``subparagraphs (A) and (B) of paragraph (2)'';
       (bb) by inserting ``after taking into account the local 
     adjusted levels of performance and'' after ``eligible 
     agency,''; and
       (cc) by striking subclause (II) and inserting the 
     following:

       ``(II) require the eligible recipients to make continuous 
     and significant improvement in career and technical 
     achievement of career and technical education students, 
     including special populations.'';
       (II) in clause (v)--

       (aa) in the clause heading, by striking ``3rd, 4th, and 
     5th'' and inserting ``subsequent'';
       (bb) by striking ``third program year'' and inserting 
     ``third and fifth program years''; and
       (cc) by striking ``third, fourth, and fifth'' and inserting 
     ``corresponding subsequent'';

       (III) in clause (vi)(II), by inserting ``and significant'' 
     after ``continuous''; and
       (IV) in clause (vii), by striking ``or (vi)'' and inserting 
     ``or (v)''; and

       (iii) in subparagraph (B), by striking ``(2)(B)'' and 
     inserting ``(2)(C)''; and
       (D) by adding at the end the following:
       ``(4) Local levels of performance.--
       ``(A) Local adjusted levels of performance for core 
     indicators of performance.--
       ``(i) In general.--Each eligible recipient shall accept the 
     State adjusted levels of performance established under 
     paragraph (3) as local adjusted levels of performance, or 
     negotiate with the State to reach agreement on new local 
     adjusted levels of performance, for each of the core 
     indicators of performance described in subparagraphs (A) and 
     (B) of paragraph (2) for career and technical education 
     activities authorized under this title. The levels of 
     performance established under this subparagraph shall, at a 
     minimum--

       ``(I) be expressed in a percentage or numerical form, so as 
     to be objective, quantifiable, and measurable; and
       ``(II) require the eligible recipient to make continuous 
     and significant improvement in career and technical 
     achievement of career and technical education students.

       ``(ii) Identification in the local plan.--Each eligible 
     recipient shall identify, in the local plan submitted under 
     section 134, levels of performance for each of the core 
     indicators of performance for the first 2 program years 
     covered by the local plan.
       ``(iii) Agreement on local adjusted levels of performance 
     for first 2 years.--The eligible agency and each eligible 
     recipient shall reach agreement on the eligible recipient's 
     levels of performance for each of the core indicators of 
     performance for the first 2 program years covered by the 
     local plan, taking into account the levels identified in the 
     local plan under clause (ii) and the factors described in 
     clause (v). The levels of performance agreed to under this 
     clause shall be considered to be the local adjusted levels of 
     performance for the eligible recipient for such years and 
     shall be incorporated into the local plan prior to the 
     approval of such plan.
       ``(iv) Agreement on local adjusted levels of performance 
     for subsequent years.--Prior to the third and fifth program 
     years covered by the local plan, the eligible agency and each 
     eligible recipient shall reach agreement on the local 
     adjusted levels of performance for each of the core 
     indicators of performance for the corresponding subsequent 
     program years covered by the local plan, taking into account 
     the factors described in clause (v). The local adjusted 
     levels of performance agreed to under this clause shall be 
     considered to be the local adjusted levels of performance for 
     the eligible recipient for such years and shall be 
     incorporated into the local plan.
       ``(v) Factors.--The agreement described in clause (iii) or 
     (iv) shall take into account--

       ``(I) how the levels of performance involved compare with 
     the local adjusted levels of performance established for 
     other eligible recipients, taking into account factors 
     including the characteristics of participants when the 
     participants entered the program and the services or 
     instruction to be provided; and
       ``(II) the extent to which the local adjusted levels of 
     performance involved promote continuous and significant 
     improvement on the core indicators of performance by the 
     eligible recipient.

       ``(vi) Revisions.--If unanticipated circumstances arise 
     with respect to an eligible recipient resulting in a 
     significant change in the factor described in clause (v)(II), 
     the eligible recipient may request that the local adjusted 
     levels of performance agreed to under clause (iii) or (iv) be 
     revised. The eligible agency shall issue objective criteria 
     and methods for making such revisions.
       ``(B) Levels of performance for additional indicators.--
     Each eligible recipient may identify, in the local plan, 
     local levels of performance for any additional indicators of 
     performance described in paragraph (2)(C). Such levels shall 
     be considered to be the local levels of performance for 
     purposes of this title.
       ``(C) Report.--Each eligible recipient that receives an 
     allocation under section 131 shall publicly report, on an 
     annual basis, its progress in achieving the local adjusted 
     levels of performance on the core indicators of 
     performance.''; and
       (4) by striking subsection (c)(1)(B) and inserting:
       ``(B) information on the levels of performance achieved by 
     the State with respect to the additional indicators of 
     performance, including the levels of performance 
     disaggregated for postsecondary institutions, by special 
     populations, and for secondary institutions, by special 
     populations and by the categories described in section 
     1111(h)(1)(C)(i) of the Elementary and Secondary Education 
     Act of 1965, except that such disaggregation shall not be 
     required in a case in which the

[[Page 1186]]

     number of individuals in a category is insufficient to yield 
     statistically reliable information or the results would 
     reveal personally identifiable information about an 
     individual.''.

     SEC. 105. NATIONAL ACTIVITIES.

       Section 114 (20 U.S.C. 2324) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (2) in subsection (a)(1), by striking ``, including an 
     analysis of performance data regarding special populations'' 
     and inserting ``, including an analysis of performance data 
     that is disaggregated for postsecondary institutions, by 
     special populations, and for secondary institutions, by 
     special populations and by the categories described in 
     section 1111(h)(1)(C)(i) of the Elementary and Secondary 
     Education Act of 1965, except that such disaggregation shall 
     not be required in a case in which the number of individuals 
     in a category is insufficient to yield statistically reliable 
     information or the results would reveal personally 
     identifiable information about an individual'';
       (3) in subsection (c)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Independent advisory panel.--
       ``(A) In general.--The Secretary shall appoint an 
     independent advisory panel to advise the Secretary on the 
     implementation of the assessment described in paragraph (3), 
     including the issues to be addressed and the methodology of 
     the studies involved to ensure that the assessment adheres to 
     the highest standards of quality.
       ``(B) Members.--The advisory panel shall consist of--
       ``(i) educators, principals, and administrators (including 
     State directors of career and technical education), with 
     expertise in the integration of academic and career and 
     technical education;
       ``(ii) experts in evaluation, research, and assessment;
       ``(iii) representatives of labor organizations and 
     businesses, including small businesses;
       ``(iv) parents;
       ``(v) career guidance and academic counseling 
     professionals; and
       ``(vi) other individuals and intermediaries with relevant 
     expertise.
       ``(C) Independent analysis.--The advisory panel shall 
     transmit to the Secretary and to the relevant committees of 
     Congress an independent analysis of the findings and 
     recommendations resulting from the assessment described in 
     paragraph (3).
       ``(D) FACA.--The Federal Advisory Committee Act (5 U.S.C. 
     App.) shall not apply to the panel established under this 
     paragraph.'';
       (B) in paragraph (3)--
       (i) by striking subparagraph (A) and inserting the 
     following:
       ``(A) In general.--From amounts made available under 
     subsection (d), the Secretary shall provide for the conduct 
     of an independent evaluation and assessment of career and 
     technical education programs under this Act, including the 
     implementation of the Carl D. Perkins Career and Technical 
     Education Improvement Act of 2005, to the extent practicable, 
     through studies and analyses conducted independently through 
     grants, contracts, and cooperative agreements that are 
     awarded on a competitive basis.'';
       (ii) in subparagraph (B)--

       (I) by striking clause (iii) and inserting the following:

       ``(iii) the preparation and qualifications of teachers and 
     faculty of career and technical education, as well as 
     shortages of such teachers and faculty;'';

       (II) by striking clause (v) and inserting the following:

       ``(v) academic and career and technical education 
     achievement and employment outcomes of career and technical 
     education students, including analyses of--

       ``(I) the number of career and technical education students 
     and tech-prep students who meet the State adjusted levels of 
     performance established under section 113;
       ``(II) the extent and success of integration of challenging 
     academic and career and technical education for students 
     participating in career and technical education programs;
       ``(III) the extent to which career and technical education 
     programs prepare students, including special populations, for 
     subsequent employment in high skill, high wage occupations, 
     or participation in postsecondary education; and
       ``(IV) the number of career and technical education 
     students receiving a high school diploma;'';
       (III) in clause (vi), by inserting ``, and career and 
     technical education students' preparation for employment'' 
     after ``programs''; and
       (IV) in clause (viii), by inserting ``and local'' after 
     ``State'' both places such term appears; and

       (iii) in subparagraph (C)--

       (I) in clause (i)--

       (aa) by striking ``Committee on Education'' and all that 
     follows through ``Senate'' and inserting ``relevant 
     committees of Congress''; and
       (bb) by striking ``2002'' both places it appears and 
     inserting ``2009''; and

       (II) in clause (ii), by striking ``Committee on Education'' 
     and all that follows through ``Senate'' and inserting 
     ``relevant committees of Congress'';

       (C) in paragraph (4)(B), by striking ``Committee on 
     Education'' and all that follows through ``Senate'' and 
     inserting ``relevant committees of Congress'';
       (D) in paragraph (5)--
       (i) in subparagraph (A)--

       (I) in the matter preceding clause (i), by striking 
     ``higher education'' and all that follows through ``centers'' 
     and inserting ``higher education offering comprehensive 
     graduate programs in career and technical education that 
     shall be the primary recipient and shall collaborate with a 
     public or private nonprofit organization or agency, or a 
     consortium of such institutions, organizations, or agencies, 
     to establish a national research center'';
       (II) in clause (i)--

       (aa) by inserting ``and evaluation'' after ``to carry out 
     research''; and
       (bb) by inserting ``, including special populations,'' 
     after ``participants'';

       (III) by redesignating clauses (ii), (iii), and (iv), as 
     clauses (iii), (iv), and (v), respectively;
       (IV) by inserting after clause (i) the following:

       ``(ii) to carry out research for the purpose of developing, 
     improving, and identifying the most successful methods for 
     successfully addressing the needs of employers in high skill, 
     high wage business and industry, including evaluation and 
     scientifically based research of--

       ``(I) collaboration between career and technical education 
     programs and business and industry;
       ``(II) academic and technical skills required to respond to 
     the challenge of a global economy and rapid technological 
     changes; and
       ``(III) technical knowledge and skills required to respond 
     to needs of a regional or sectoral workforce, including small 
     business;'';
       (V) in clause (iii) (as redesignated by subclause (III) of 
     this clause), by inserting ``that are integrated with 
     challenging academic instruction'' before ``, including''; 
     and
       (VI) by striking clause (iv) (as redesignated by subclause 
     (III) of this clause) and inserting the following:

       ``(iv) to carry out scientifically based research, where 
     appropriate, that can be used to improve preparation and 
     professional development of teachers, faculty, principals, 
     and administrators and student learning in the career and 
     technical education classroom, including--

       ``(I) effective in-service and pre-service teacher and 
     faculty education that assists career and technical education 
     programs in--

       ``(aa) integrating those programs with academic content 
     standards and student academic achievement standards, as 
     adopted by States under section 1111(b)(1) of the Elementary 
     and Secondary Education Act of 1965; and
       ``(bb) promoting technical education aligned with industry-
     based standards and certifications to meet regional industry 
     needs;

       ``(II) dissemination and training activities related to the 
     applied research and demonstration activities described in 
     this subsection, which may also include serving as a 
     repository for information on career and technical education 
     skills, State academic standards, and related materials; and
       ``(III) the recruitment and retention of career and 
     technical education teachers, faculty, counselors, 
     principals, and administrators, including individuals in 
     groups underrepresented in the teaching profession; and'';

       (ii) in subparagraph (B)--

       (I) by striking ``or centers'' both places the term 
     appears; and
       (II) by striking ``Committee on Education'' and all that 
     follows through ``Senate'' and inserting ``relevant 
     committees of Congress'';

       (iii) in subparagraph (C), by striking ``or centers''; and
       (iv) by adding at the end the following:
       ``(D) Independent governing board.--
       ``(i) In general.--An institution of higher education that 
     desires a grant, contract, or cooperative agreement under 
     this paragraph shall identify, in its application, an 
     independent governing board for the center established 
     pursuant to this paragraph.
       ``(ii) Members.--The independent governing board shall 
     consist of the following:

       ``(I) Two representatives of secondary career and technical 
     education.
       ``(II) Two representatives of postsecondary career and 
     technical education.
       ``(III) Two representatives of eligible agencies.
       ``(IV) Two representatives of business and industry.
       ``(V) Two representatives of career and technical teacher 
     preparation institutions.
       ``(VI) Two nationally recognized researchers in the field 
     of career and technical education.

       ``(iii) Coordination.--The independent governing board 
     shall ensure that the research and dissemination activities 
     carried out by the center are coordinated with the research 
     activities carried out by the Secretary.'';
       (E) in paragraph (6)(B)(ii), by striking ``or centers''; 
     and
       (F) by striking paragraph (8); and
       (4) by adding at the end the following:

[[Page 1187]]

       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2006 
     through 2011.''.

     SEC. 106. ASSISTANCE FOR THE OUTLYING AREAS.

       Section 115 (20 U.S.C. 2325) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (2) in subsection (b)--
       (A) in the matter preceding paragraph (1), by striking 
     ``the Republic of the Marshall Islands, the Federated States 
     of Micronesia,'';
       (B) in paragraph (1), by striking ``training and 
     retraining;'' and inserting ``preparation;'';
       (C) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively; and
       (D) by inserting after paragraph (1) the following:
       ``(2) professional development for teachers, faculty, 
     principals, and administrators;''; and
       (3) in subsection (d)--
       (A) by striking ``the Republic of the Marshall Islands, the 
     Federated States of Micronesia, and''; and
       (B) by striking ``2001'' and inserting ``2007''.

     SEC. 107. NATIVE AMERICAN PROGRAM.

       Section 116 (20 U.S.C. 2326) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (2) in subsection (a)(5), by adding a period at the end;
       (3) in subsection (b)--
       (A) in paragraph (1), by striking ``(d)'' and inserting 
     ``(c)''; and
       (B) in paragraph (2), by striking ``(other than in 
     subsection (i))'';
       (4) in subsection (d), by striking ``section an'' and 
     inserting ``section, an'';
       (5) in subsection (e), by striking ``paragraph'' and 
     inserting ``section''; and
       (6) in subsection (h), by striking ``which are recognized 
     by the Governor of the State of Hawaii''.

     SEC. 108. TRIBALLY CONTROLLED POSTSECONDARY CAREER AND 
                   TECHNICAL INSTITUTIONS.

       Section 117 (20 U.S.C. 2327) is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``SEC. 117. TRIBALLY CONTROLLED POSTSECONDARY CAREER AND 
                   TECHNICAL INSTITUTIONS.'';

       (2) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (3) in subsection (g)--
       (A) in paragraph (1), by striking ``The Secretary'' and 
     inserting ``On an annual basis, the Secretary'';
       (B) in paragraph (2)(B), by striking ``2000'' and inserting 
     ``2007''; and
       (C) in paragraph (3)(C), by striking ``beginning'' and all 
     that follows through the period and inserting ``beginning on 
     the date of enactment of the Carl D. Perkins Career and 
     Technical Education Improvement Act of 2005.'';
       (4) by redesignating subsections (h) and (i) as subsections 
     (i) and (j), respectively;
       (5) by inserting after subsection (g) the following:
       ``(h) Appeals.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall provide a tribally controlled postsecondary career and 
     technical institution with a hearing on the record before an 
     administrative law judge with respect to the following 
     determinations:
       ``(A) A determination that such institution is not eligible 
     for a grant under this section.
       ``(B) A determination regarding the calculation of the 
     amount of a grant awarded under this section.
       ``(2) Procedure for appeal.--To appeal a determination 
     described in paragraph (1), a tribally controlled 
     postsecondary career and technical institution shall--
       ``(A) in the case of an appeal based on a determination 
     that such institution is not eligible for a grant under this 
     section, file a notice of appeal with the Secretary not later 
     than 30 days after receipt of such determination; and
       ``(B) in the case of an appeal based on a determination 
     regarding the calculation of the amount of a grant awarded 
     under this section--
       ``(i) file a notice of appeal with the Secretary not later 
     than 30 days after receipt of the Secretary's notification of 
     the grant amount; and
       ``(ii) identify the amount of funding that gives rise to 
     such appeal.
       ``(3) Withholding of amount.--If a tribally controlled 
     postsecondary career and technical institution appeals a 
     determination described in paragraph (1), the Secretary shall 
     withhold the amount in dispute from the award of grant funds 
     under this section until such time as the administrative law 
     judge has issued a written decision on the appeal.''; and
       (6) by striking subsection (j) (as redesignated by 
     paragraph (4) of this section) and inserting the following:
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $10,000,000 for fiscal year 2006 and such sums as may be 
     necessary for each of the 5 succeeding fiscal years.''.

     SEC. 109. OCCUPATIONAL AND EMPLOYMENT INFORMATION.

       Section 118 (20 U.S.C. 2328) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1), by striking 
     ``(f)'' and inserting ``(g)'';
       (B) in paragraph (1)--
       (i) in subparagraph (A), by striking ``(b)'' both places it 
     appears and inserting ``(c)'';
       (ii) in subparagraph (B), by striking ``(b)'' and inserting 
     ``(c)''; and
       (iii) in subparagraph (C), by striking ``(b)'' and 
     inserting ``(c)''; and
       (C) in paragraph (2), by striking ``(b)'' both places it 
     appears and inserting ``(c)'';
       (2) by redesignating subsections (b) through (f) as 
     subsections (c) through (g), respectively;
       (3) by inserting after subsection (a) the following:
       ``(b) State Application.--
       ``(1) In general.--Each State desiring assistance under 
     this section shall submit an application to the Secretary at 
     the same time the State submits its State plan under section 
     122, in such manner, and accompanied by such additional 
     information, as the Secretary may reasonably require.
       ``(2) Contents.--Each application submitted under paragraph 
     (1) shall include--
       ``(A) a description of how the State entity designated in 
     subsection (c) will provide information based on labor market 
     trends to inform program development; and
       ``(B) information about the academic content standards and 
     student academic achievement standards adopted by the State 
     under section 1111(b)(1) of the Elementary and Secondary 
     Education Act of 1965.'';
       (4) in subsection (c) (as redesignated by paragraph (2) of 
     this section)--
       (A) in paragraph (1), by striking ``individuals'' and all 
     that follows through the semicolon and inserting ``students 
     and parents, including postsecondary education and training, 
     including preparation for high skill, high wage, or high 
     demand occupations and nontraditional fields in emerging or 
     established professions;'';
       (B) in paragraph (2), by inserting ``academic and career 
     and technical'' after ``relate'';
       (C) by striking paragraph (3) and inserting the following:
       ``(3) to equip teachers, faculty, administrators, and 
     counselors with the knowledge, skills, and occupational 
     information needed to assist parents and all students, 
     especially special populations underrepresented in certain 
     careers, with career exploration, educational opportunities, 
     education financing, and exposure to high skill, high wage, 
     or high demand occupations and nontraditional fields;'';
       (D) in paragraph (4), by striking ``such entities;'' and 
     inserting ``such entities, with an emphasis on high skill, 
     high wage, or high demand occupations in emerging or 
     established professions;'';
       (E) in paragraph (5), by striking ``and'' after the 
     semicolon;
       (F) in paragraph (6), by striking the period and inserting 
     ``; and''; and
       (G) by adding at the end the following:
       ``(7) to provide information, if available, for each 
     occupation, on--
       ``(A) the average earnings of an individual in the 
     occupation at entry level and after 5 years of employment;
       ``(B) the expected lifetime earnings; and
       ``(C) the expected future demand for the occupation, based 
     on employment projections.'';
       (5) in subsection (d)(1) (as redesignated by paragraph (2) 
     of this section), by striking ``(b)'' both places it appears 
     and inserting ``(c)'';
       (6) in subsection (e)(1) (as redesignated by paragraph (2) 
     of this section), by striking ``(b)'' and inserting ``(c)'';
       (7) in subsection (f)(1) (as redesignated by paragraph (2) 
     of this section), by striking ``an identification'' and 
     inserting ``a description''; and
       (8) in subsection (g) (as redesignated by paragraph (2) of 
     this section), by striking ``1999 through 2003'' and 
     inserting ``2006 through 2011''.

     SEC. 110. STATE ADMINISTRATION.

       Section 121 (20 U.S.C. 2341) is amended--
       (1) by redesignating subsection (a)(2) as subsection (b) 
     and indenting appropriately;
       (2) by redesignating subparagraphs (A) through (D) of 
     subsection (a)(1) as paragraphs (1) through (4), 
     respectively, and indenting appropriately;
       (3) by redesignating clauses (i) and (ii) of paragraph (4) 
     (as redesignated by paragraph (2) of this section) as 
     subparagraphs (A) and (B), respectively, and indenting 
     appropriately;
       (4) by striking the following:
       ``(a) Eligible Agency Responsibilities.--
       ``(1) In general.--The responsibilities'' and inserting the 
     following:
       ``(a) Eligible Agency Responsibilities.--The 
     responsibilities'';
       (5) in subsection (a)(1) (as redesignated by paragraph (2) 
     of this section), by striking ``training and employment'' and 
     inserting ``fields'';
       (6) in subsection (a)(2) (as redesignated by paragraph (2) 
     of this section)--
       (A) by inserting ``teacher and faculty preparation 
     programs,'' after ``teachers,''; and
       (B) by inserting ``all types and sizes of'' after 
     ``representatives of''; and
       (7) in subsection (b) (as redesignated by paragraph (1) of 
     this section), by striking

[[Page 1188]]

     ``paragraph (1)'' and inserting ``subsection (a)''.

     SEC. 111. STATE PLAN.

       Section 122 (20 U.S.C. 2342) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (2) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``5'' and inserting ``6''; and
       (ii) by adding at the end the following: ``Each eligible 
     agency may submit a transition plan during the first full 
     year of implementation of this Act after the date of 
     enactment of the Carl D. Perkins Career and Technical 
     Education Improvement Act of 2005. The transition plan shall 
     fulfill the eligible agency's State plan submission 
     obligation under this section.''; and
       (B) in paragraph (2)(B), by striking ``5 year State plan'' 
     and inserting ``6-year period'';
       (3) by striking subsection (b)(1) and inserting the 
     following:
       ``(1) In general.--The eligible agency shall develop the 
     State plan in consultation with academic and career and 
     technical education teachers, faculty, principals, and 
     administrators, career guidance and academic counselors, 
     eligible recipients, parents, students, the State tech-prep 
     coordinator and representatives of tech-prep consortia (if 
     applicable), interested community members (including parent 
     and community organizations), representatives of special 
     populations, representatives of business (including small 
     business) and industry, and representatives of labor 
     organizations in the State, and shall consult the Governor of 
     the State with respect to such development.'';
       (4) by striking subsection (c) and inserting the following:
       ``(c) Plan Contents.--The State plan shall include 
     information that--
       ``(1) describes the career and technical education 
     activities to be assisted that are designed to meet or exceed 
     the State adjusted levels of performance, including a 
     description of--
       ``(A) how the eligible agency will support eligible 
     recipients in developing or implementing career pathways for 
     career and technical education content areas that are 
     designed to meet relevant workforce needs, including how the 
     eligible agency will--
       ``(i) support eligible recipients in developing 
     articulation agreements between secondary and postsecondary 
     institutions;
       ``(ii) support eligible recipients in using labor market 
     information to identify career pathways that prepare 
     individuals for high skill, high wage, or high demand 
     occupations;
       ``(iii) make available information about career pathways 
     offered by eligible recipients; and
       ``(iv) consult with business and industry and use industry-
     recognized standards and assessments, if appropriate;
       ``(B) the secondary and postsecondary career and technical 
     education programs to be carried out, including programs that 
     will be carried out by the eligible agency to develop, 
     improve, and expand access to quality technology in career 
     and technical education programs;
       ``(C) the criteria that will be used by the eligible agency 
     to approve eligible recipients for funds under this title, 
     including criteria to assess the extent to which the local 
     plan will--
       ``(i) promote higher levels of academic achievement;
       ``(ii) promote higher levels of technical skill attainment; 
     and
       ``(iii) identify and address workforce needs;
       ``(D) how programs at the secondary level will prepare 
     career and technical education students, including special 
     populations to graduate from high school with a diploma;
       ``(E) how such programs will prepare career and technical 
     education students, including special populations, both 
     academically and technically, for opportunities in 
     postsecondary education or entry into high skill, high wage, 
     or high demand occupations in emerging or established 
     occupations, and how participating students will be made 
     aware of such opportunities; and
       ``(F) how funds will be used to improve or develop new 
     career and technical education courses in high skill, high 
     wage, or high demand occupations that are aligned with 
     business needs and industry standards, as appropriate--
       ``(i) at the secondary level that are aligned with 
     challenging academic content standards and student academic 
     achievement standards adopted by the State under section 
     1111(b)(1) of the Elementary and Secondary Education Act of 
     1965; and
       ``(ii) at the postsecondary level that are relevant and 
     challenging;
       ``(2) describes how career and technical education 
     teachers, faculty, principals, administrators, and career 
     guidance and academic counselors will be provided 
     comprehensive initial preparation and professional 
     development, including through programs and activities that--
       ``(A) promote the integration of challenging academic and 
     career and technical education curriculum development, 
     including opportunities for teachers to jointly develop and 
     implement curriculum and pedagogical strategies with 
     appropriate academic teachers;
       ``(B) increase the academic and career and technical 
     education knowledge of career and technical education 
     teachers and faculty;
       ``(C) are high-quality, sustained, intensive, focused on 
     instruction, directly related to industry standards, and 
     includes structured induction and mentoring components for 
     new personnel, with an emphasis on identifying and addressing 
     the needs of local businesses, including small businesses;
       ``(D) ensure an increasing number of career and technical 
     education teachers and faculty meet teacher certification and 
     licensing requirements reflecting the needs of their subject 
     area or areas;
       ``(E) equip them with the knowledge and skills needed to 
     work with and improve instruction for special populations;
       ``(F) assist in accessing and utilizing data, including 
     labor market indicators, student achievement, and 
     assessments;
       ``(G) enhance the leadership capacity of principals and 
     administrators;
       ``(H) are integrated with professional development 
     activities that the State carries out under title II of the 
     Elementary and Secondary Education Act of 1965 and title II 
     of the Higher Education Act of 1965; and
       ``(I) include strategies to expose all career and technical 
     education students to comprehensive information regarding 
     career options that lead to high skill, high wage, or high 
     demand occupations and nontraditional fields;
       ``(3) describes efforts to improve--
       ``(A) the recruitment and retention of career and technical 
     education teachers, faculty, counselors, principals, and 
     administrators, including individuals in groups 
     underrepresented in the teaching profession; and
       ``(B) the transition to teaching from business and 
     industry, including small business;
       ``(4) describes efforts to improve the capacity of programs 
     and faculty at postsecondary institutions to effectively 
     prepare career and technical education personnel, including, 
     as appropriate, through electronically delivered distance 
     education, and articulation agreements between 2-year 
     technical programs and postsecondary education programs;
       ``(5) describes how the eligible agency will actively 
     involve parents, academic and career and technical education 
     teachers, faculty, principals, and administrators, career 
     guidance and academic counselors, local businesses (including 
     small- and medium-sized businesses and business 
     intermediaries), and labor organizations in the planning, 
     development, implementation, and evaluation of such career 
     and technical education programs;
       ``(6) describes how funds received by the eligible agency 
     through the allotment made under section 111 will be 
     allocated--
       ``(A) among secondary school career and technical 
     education, or postsecondary and adult career and technical 
     education, or both, including the rationale for such 
     allocation; and
       ``(B) among any consortia that will be formed among 
     secondary schools and eligible institutions, and how funds 
     will be allocated among the members of the consortia, 
     including the rationale for such allocation;
       ``(7) describes how the eligible agency will--
       ``(A) use funds to improve or develop new career and 
     technical education courses in high skill, high wage, or high 
     demand occupations--
       ``(i) at the secondary level that are aligned with 
     challenging academic content standards and student academic 
     achievement standards adopted by the State under section 
     1111(b)(1) of the Elementary and Secondary Education Act of 
     1965; and
       ``(ii) at the postsecondary level that are challenging and 
     aligned with business needs and industry standards, as 
     appropriate;
       ``(B) improve the academic and technical skills of students 
     participating in career and technical education programs, 
     including strengthening the academic, and career and 
     technical, components of career and technical education 
     programs through the integration of academics with career and 
     technical education to ensure learning in the core academic 
     subjects and career and technical education subjects, and 
     provide students with strong experience in, and understanding 
     of, all aspects of an industry;
       ``(C) ensure that students who participate in such career 
     and technical education programs are taught to the same 
     challenging academic proficiencies as are taught to all other 
     students; and
       ``(D) encourage secondary school students who participate 
     in such career and technical education programs to enroll in 
     challenging courses in core academic subjects;
       ``(8) describes how the eligible agency will annually 
     evaluate the effectiveness of such career and technical 
     education programs, and describes, to the extent practicable, 
     how the eligible agency is coordinating such programs to 
     promote relevant lifelong learning and ensure nonduplication 
     with other existing Federal programs;
       ``(9) describes the eligible agency's program strategies 
     for special populations, including a description of how 
     individuals who are members of the special populations--
       ``(A) will be provided with equal access to activities 
     assisted under this title;
       ``(B) will not be discriminated against on the basis of 
     their status as members of the special populations; and
       ``(C) will be provided with programs designed to enable the 
     special populations to

[[Page 1189]]

     meet or exceed State adjusted levels of performance, and 
     prepare special populations for further learning and for high 
     skill, high wage, or high demand occupations;
       ``(10) how the eligible agency will collaborate in 
     developing the State plan with--
       ``(A) the entity within the State with responsibility for 
     elementary and secondary education;
       ``(B) the entity within the State with responsibility for 
     public institutions engaged in postsecondary education;
       ``(C) State institutions such as State correctional 
     institutions and institutions that serve individuals with 
     disabilities; and
       ``(D) all other relevant State agencies with responsibility 
     for career and technical education and training and workforce 
     development;
       ``(11) describes what steps the eligible agency will take 
     to involve representatives of eligible recipients in the 
     development of the State adjusted levels of performance;
       ``(12) provides assurances that the eligible agency will 
     comply with the requirements of this title and the provisions 
     of the State plan, including the provision of a financial 
     audit of funds received under this title which may be 
     included as part of an audit of other Federal or State 
     programs;
       ``(13) provides assurances that none of the funds expended 
     under this title will be used to acquire equipment (including 
     computer software) in any instance in which such acquisition 
     results in a direct financial benefit to any organization 
     representing the interests of the purchasing entity, the 
     employees of the purchasing entity, or any affiliate of such 
     an organization;
       ``(14) describes how the eligible agency will measure and 
     report data relating to students participating in and 
     completing career and technical education within specific 
     career clusters in order to adequately measure the progress 
     of the students, including special populations, at--
       ``(A) the secondary level, disaggregated by the categories 
     described in section 1111(h)(1)(C)(i) of the Elementary and 
     Secondary Education Act of 1965, except that such 
     disaggregation shall not be required in a case in which the 
     number of individuals in a category is insufficient to yield 
     statistically reliable information or the results would 
     reveal personally identifiable information about an 
     individual; and
       ``(B) the postsecondary level, disaggrega-
     ted by special populations and the categories described in 
     section 1111(h)(1)(C)(i) of the Elementary and Secondary 
     Education Act of 1965, except that such disaggregation shall 
     not be required in a case in which the number of individuals 
     in a category is insufficient to yield statistically reliable 
     information or the results would reveal personally 
     identifiable information about an individual;
       ``(15) describes how the eligible agency will adequately 
     address the needs of students in alternative education 
     programs, if appropriate;
       ``(16) describes how the eligible agency will provide local 
     educational agencies, area career and technical education 
     schools, and eligible institutions in the State with 
     technical assistance;
       ``(17) describes how career and technical education relates 
     to State and regional occupational opportunities;
       ``(18) describes the methods proposed for the joint 
     planning and coordination of programs carried out under this 
     title with other Federal education programs;
       ``(19) describes how funds will be used to promote 
     preparation for high skill, high wage, or high demand 
     occupations and nontraditional fields in emerging and 
     established professions;
       ``(20) describes how funds will be used to serve 
     individuals in State correctional institutions;
       ``(21) describes how the eligible agency will ensure that 
     the data reported to the eligible agency from local 
     educational agencies and eligible institutions under this 
     title and the data the eligible agency reports to the 
     Secretary are complete, accurate, and reliable; and
       ``(22) contains the description and information specified 
     in sections 112(b)(8) and 121(c) of the Workforce Investment 
     Act of 1998 (29 U.S.C. 2822(b)(8) and 2841(c)) concerning the 
     provision of services only for postsecondary students and 
     school dropouts.'';
       (5) by striking subsection (d) and inserting the following:
       ``(d) Plan Options.--
       ``(1) Single plan.--The eligible agency may fulfill the 
     plan or application submission requirements of this section, 
     section 118(b), and section 141(c) by submitting a single 
     State plan. In such plan, the eligible agency may allow 
     eligible recipients to fulfill the plan or application 
     submission requirements of section 134 and subsections (a) 
     and (b) of section 143 by submitting a single local plan.
       ``(2) Plan submitted as part of 501 plan.--The eligible 
     agency may submit the plan required under this section as 
     part of the plan submitted under section 501 of the Workforce 
     Investment Act of 1998 (20 U.S.C. 9271), provided that the 
     plan submitted pursuant to the requirement of this section 
     meets the requirements of this Act.''; and
       (6) by striking subsection (f).

     SEC. 112. IMPROVEMENT PLANS.

       Section 123 (20 U.S.C. 2343) is amended to read as follows:

     ``SEC. 123. IMPROVEMENT PLANS.

       ``(a) State Program Improvement Plan.--
       ``(1) Plan.--If a State fails to meet the State adjusted 
     levels of performance described in the report submitted under 
     section 113(c), the eligible agency shall develop and 
     implement a program improvement plan in consultation with the 
     appropriate agencies, individuals, and organizations for the 
     first program year succeeding the program year in which the 
     eligible agency failed to meet the State adjusted levels of 
     performance, in order to avoid a sanction under paragraph 
     (3).
       ``(2) Technical assistance.--If the Secretary determines 
     that an eligible agency is not properly implementing the 
     eligible agency's responsibilities under section 122, or is 
     not making substantial progress in meeting the purpose of 
     this Act, based on the State's adjusted levels of 
     performance, the Secretary shall work with the eligible 
     agency to implement improvement activities consistent with 
     the requirements of this Act.
       ``(3) Failure.--
       ``(A) In general.--If an eligible agency fails to meet the 
     State adjusted levels of performance, has not implemented an 
     improvement plan as described in paragraph (1), has shown no 
     improvement within 1 year after implementing an improvement 
     plan as described in paragraph (1), or has failed to meet the 
     State adjusted levels of performance for 2 or more 
     consecutive years, the Secretary may, after notice and 
     opportunity for a hearing, withhold from the eligible agency 
     all, or a portion of, the eligible agency's allotment under 
     this title.
       ``(B) Waiver for exceptional circumstances.--The Secretary 
     may waive the sanction in subparagraph (A) due to exceptional 
     or uncontrollable circumstances such as a natural disaster or 
     a precipitous and unforeseen decline in financial resources 
     of the State.
       ``(4) Funds resulting from reduced allotments.--
       ``(A) In general.--The Secretary shall use funds withheld 
     under paragraph (3) for a State served by an eligible agency, 
     to provide (through alternative arrangements) services and 
     activities within the State to meet the purposes of this Act.
       ``(B) Redistribution.--If the Secretary cannot 
     satisfactorily use funds withheld under paragraph (3), then 
     the amount of funds retained by the Secretary as a result of 
     a reduction in an allotment made under paragraph (3) shall be 
     redistributed to other eligible agencies in accordance with 
     section 111.
       ``(b) Local Program Improvement.--
       ``(1) Local evaluation.--Each eligible agency shall 
     evaluate annually, using the local adjusted levels of 
     performance described in section 113(b)(4), the career and 
     technical education activities of each eligible recipient 
     receiving funds under this title.
       ``(2) Plan.--
       ``(A) In general.--If, after reviewing the evaluation, the 
     eligible agency determines that an eligible recipient is not 
     making substantial progress in achieving the local adjusted 
     levels of performance, the eligible agency shall--
       ``(i) conduct an assessment of the educational needs that 
     the eligible recipient shall address to overcome local 
     performance deficiencies, including the performance of 
     special populations;
       ``(ii) enter into an improvement plan with an eligible 
     recipient based on the results of the assessment, for the 
     first program year succeeding the program year in which the 
     eligible recipient failed to meet the local adjusted levels 
     of performance, which plan shall demonstrate how the local 
     performance deficiencies will be corrected and include 
     instructional and other programmatic innovations of 
     demonstrated effectiveness, and, where necessary, strategies 
     for appropriate staffing and professional development; and
       ``(iii) conduct regular evaluations of the progress being 
     made toward reaching the local adjusted levels of 
     performance, as described in section 113(b)(4), and progress 
     on implementing the improvement plan.
       ``(B) Consultation.--The eligible agency shall conduct the 
     activities described in subparagraph (A) in consultation with 
     teachers, principals, administrators, faculty, parents, other 
     school staff, appropriate agencies, and other appropriate 
     individuals and organizations.
       ``(3) Technical assistance.--If the eligible agency 
     determines that an eligible recipient is not properly 
     implementing the eligible recipient's responsibilities under 
     section 134, or is not making substantial progress in meeting 
     the purpose of this Act, based on the local adjusted levels 
     of performance, the eligible agency shall provide technical 
     assistance to the eligible recipient to assist the eligible 
     recipient in carrying out the improvement activities 
     consistent with the requirements of this Act. An eligible 
     recipient, in collaboration with the eligible agency, may 
     request that the Secretary provide additional technical 
     assistance.
       ``(4) Failure.--
       ``(A) In general.--If an eligible recipient fails to meet 
     the local adjusted levels of performance as described in 
     section 113(b)(4) and has not implemented an improvement plan

[[Page 1190]]

     as described in paragraph (2), has shown no improvement 
     within 1 year after implementing an improvement plan as 
     described in paragraph (2), or has failed to meet more than 1 
     of the local adjusted levels of performance for 2 or more 
     consecutive years, the eligible agency may, after notice and 
     opportunity for a hearing, withhold from the eligible 
     recipient all, or a portion of, the eligible recipient's 
     allotment under this title.
       ``(B) Waiver for exceptional circumstances.--The eligible 
     agency may waive the sanction under this paragraph due to 
     exceptional or uncontrollable circumstances such as 
     organizational structure, or a natural disaster or a 
     precipitous and unforeseen decline in financial resources of 
     the eligible recipient.
       ``(5) Funds resulting from reduced allotments.--The 
     eligible agency shall use funds withheld under paragraph (4) 
     to provide (through alternative arrangements) services and 
     activities to students within the area served by such 
     recipient to meet the purpose of this Act.''.

     SEC. 113. STATE LEADERSHIP ACTIVITIES.

       Section 124 (20 U.S.C. 2344) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (2) in subsection (a), by striking ``112(a)(2)'' and 
     inserting ``112(a)(2)(A)'';
       (3) in subsection (b)--
       (A) in paragraph (1), by striking ``further learning'' and 
     all that follows through the semicolon and inserting 
     ``further education, further training, or for high skill, 
     high wage, or high demand occupations;'';
       (B) in paragraph (2), by striking subparagraphs (A) through 
     (C) and inserting the following:
       ``(A) training of career and technical education teachers, 
     faculty, principals, career guidance and academic counselors, 
     and administrators to use technology, including distance 
     learning;
       ``(B) encouraging schools to work with technology 
     industries to offer voluntary internships and mentoring 
     programs; or
       ``(C) encouraging lifelong learning, including through 
     partnerships that may involve institutions of higher 
     education, organizations providing career and technical 
     education, businesses, and communications entities;'';
       (C) by striking paragraph (3) and inserting the following:
       ``(3) professional development programs, including 
     providing comprehensive professional development (including 
     initial teacher preparation) for career and technical 
     education teachers, faculty, principals, administrators, and 
     career guidance and academic counselors at the secondary and 
     postsecondary levels, that support activities described in 
     section 122 and--
       ``(A) provide in-service and pre-service training in career 
     and technical education programs and techniques, effective 
     teaching skills based on promising practices and, where 
     available and appropriate, scientifically based research, and 
     effective practices to improve parental and community 
     involvement;
       ``(B) improve student achievement in order to meet the 
     State adjusted levels of performance established under 
     section 113;
       ``(C) support education programs for teachers and faculty 
     of career and technical education in public schools and other 
     public school personnel who are involved in the direct 
     delivery of educational services to career and technical 
     education students to ensure that such personnel--
       ``(i) stay current with the needs, expectations, and 
     methods of industry;
       ``(ii) can effectively develop challenging, integrated 
     academic and career and technical education curriculum 
     jointly with academic teachers, to the extent practicable; 
     and
       ``(iii) develop a higher level of academic and industry 
     knowledge and skills in career and technical education; and
       ``(D) are integrated with the teacher certification or 
     licensing and professional development activities that the 
     State carries out under title II of the Elementary and 
     Secondary Education Act of 1965 and title II of the Higher 
     Education Act of 1965;'';
       (D) in paragraph (4), by striking ``support for'' and 
     inserting ``supporting'';
       (E) in paragraph (5), by striking ``nontraditional training 
     and employment'' and inserting ``nontraditional fields in 
     emerging and established professions, and other activities 
     that expose students, including special populations, to high 
     skill, high wage occupations'';
       (F) in paragraph (6)--
       (i) by inserting ``intermediaries,'' after ``labor 
     organizations,''; and
       (ii) by inserting ``, or complete career pathways, as 
     described in section 122(c)(1)(A)'' after ``skills'';
       (G) in paragraph (7), by striking ``and'' after the 
     semicolon;
       (H) in paragraph (8), by striking ``wage careers.'' and 
     inserting ``wage, or high demand occupations; and''; and
       (I) by adding at the end the following:
       ``(9) technical assistance for eligible recipients.'';
       (4) by striking subsection (c) and inserting the following:
       ``(c) Permissible Uses of Funds.--The leadership activities 
     described in subsection (a) may include--
       ``(1) improvement of career guidance and academic 
     counseling programs that assist students in making informed 
     academic, and career and technical education, decisions, 
     including encouraging secondary and postsecondary students to 
     graduate with a diploma or degree, and expose students to 
     high skill, high wage occupations and nontraditional fields 
     in emerging and established professions;
       ``(2) establishment of agreements, including articulation 
     agreements, between secondary and postsecondary career and 
     technical education programs in order to provide 
     postsecondary education and training opportunities for 
     students participating in such career and technical education 
     programs, such as tech-prep programs;
       ``(3) support for career and technical student 
     organizations, especially with respect to efforts to increase 
     the participation of students who are members of special 
     populations;
       ``(4) support for public charter schools operating 
     secondary career and technical education programs;
       ``(5) support for career and technical education programs 
     that offer experience in, and understanding of, all aspects 
     of an industry for which students are preparing to enter;
       ``(6) support for family and consumer sciences programs;
       ``(7) support for partnerships between education and 
     business or business intermediaries, including cooperative 
     education and adjunct faculty arrangements at the secondary 
     and postsecondary levels;
       ``(8) support to improve or develop new career and 
     technical education courses and initiatives, including career 
     clusters, career academies, and distance learning, that 
     prepare individuals academically and technically for high 
     skill, high wage, or high demand occupations;
       ``(9) awarding incentive grants to eligible recipients for 
     exemplary performance in carrying out programs under this 
     Act, which awards shall be based on local performance 
     indicators, as described in section 113, in accordance with 
     previously publicly disclosed priorities;
       ``(10) providing career and technical education programs 
     for adults and school dropouts to complete their secondary 
     school education;
       ``(11) providing assistance to individuals, who have 
     participated in services and activities under this title, in 
     finding an appropriate job and continuing their education or 
     training through collaboration with the workforce investment 
     system established under the Workforce Investment Act of 1998 
     (29 U.S.C. 2801 et seq.);
       ``(12) developing valid and reliable assessments of 
     technical skills that are integrated with industry 
     certification assessments where available;
       ``(13) developing and enhancing data systems to collect and 
     analyze data on secondary and postsecondary academic and 
     employment outcomes;
       ``(14) improving--
       ``(A) the recruitment and retention of career and technical 
     education teachers, faculty, principals, administrators, and 
     career guidance and academic counselors, including 
     individuals in groups underrepresented in the teaching 
     profession; and
       ``(B) the transition to teaching from business and 
     industry, including small business; and
       ``(15) adopting, calculating, or commissioning a self-
     sufficiency standard.''; and
       (5) in subsection (d), by striking ``112(a)(2)'' and 
     inserting ``112(a)(2)(A)''.

     SEC. 114. DISTRIBUTION OF FUNDS TO SECONDARY SCHOOL PROGRAMS.

       Section 131 (20 U.S.C. 2351) is amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career'';
       (2) by striking subsection (a);
       (3) by redesignating subsections (b) through (i) as 
     subsections (a) through (h), respectively;
       (4) in subsection (a) (as redesignated by paragraph (3) of 
     this section)--
       (A) in the subsection heading, by striking ``Special 
     Distribution Rules for Succeeding Fiscal Years'' and 
     inserting ``Distribution Rules''; and
       (B) by striking ``for fiscal year 2000 and succeeding 
     fiscal years'';
       (5) in subsection (b) (as redesignated by paragraph (3) of 
     this section)--
       (A) by striking ``subsection (b)'' and inserting 
     ``subsection (a)''; and
       (B) in paragraph (1), by striking ``9902(2))'' and 
     inserting ``9902(2)))'';
       (6) in subsection (e) (as redesignated by paragraph (3) of 
     this section), in the subsection heading, by striking 
     ``Vocational'' and inserting ``Career''; and
       (7) in subsection (g) (as redesignated by paragraph (3) of 
     this section), by striking ``subsections (a), (b), (c), and 
     (d)'' and inserting ``subsections (a), (b), and (c)''.

     SEC. 115. DISTRIBUTION OF FUNDS FOR POSTSECONDARY CAREER AND 
                   TECHNICAL EDUCATION PROGRAMS.

       Section 132 (20 U.S.C. 2352) is amended by striking the 
     section heading and inserting the following:

[[Page 1191]]



     ``SEC. 132. DISTRIBUTION OF FUNDS FOR POSTSECONDARY CAREER 
                   AND TECHNICAL EDUCATION PROGRAMS.''.

     SEC. 116. SPECIAL RULES FOR CAREER AND TECHNICAL EDUCATION.

       Section 133 (20 U.S.C. 2353) is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``SEC. 133. SPECIAL RULES FOR CAREER AND TECHNICAL 
                   EDUCATION.'';

        and
       (2) by striking ``vocational'' each place such term appears 
     and inserting ``career''.

     SEC. 117. LOCAL PLAN FOR CAREER AND TECHNICAL EDUCATION 
                   PROGRAMS.

       Section 134 (20 U.S.C. 2354) is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``SEC. 134. LOCAL PLAN FOR CAREER AND TECHNICAL EDUCATION 
                   PROGRAMS.'';

        and
       (2) in subsection (b), by striking paragraphs (1) through 
     (10) and inserting the following:
       ``(1) describe how the career and technical education 
     programs required under section 135(b) will be carried out 
     with funds received under this title;
       ``(2) describe how the career and technical education 
     activities will be carried out with respect to meeting State 
     and local adjusted levels of performance established under 
     section 113;
       ``(3) describe how the eligible recipient will--
       ``(A) offer the appropriate courses of not less than 1 of 
     the career pathways described in section 122(c)(1)(A);
       ``(B) improve the academic and technical skills of students 
     participating in career and technical education programs by 
     strengthening the academic and career and technical education 
     components of such programs through the integration of 
     challenging academics with career and technical education 
     programs through a coherent sequence of courses to ensure 
     learning in the core academic subjects, and career and 
     technical education subjects;
       ``(C) provide students with strong experience in and 
     understanding of all aspects of an industry; and
       ``(D) ensure that students who participate in such career 
     and technical education programs are taught to the same 
     challenging academic proficiencies as are taught for all 
     other students;
       ``(4) describe how comprehensive professional development 
     will be provided that is consistent with section 122;
       ``(5) describe how parents, students, academic and career 
     and technical education teachers, faculty, principals, 
     administrators, career guidance and academic counselors, 
     representatives of tech-prep consortia (if applicable), 
     representatives of business (including small business) and 
     industry, labor organizations, representatives of special 
     populations, and other interested individuals are involved in 
     the development, implementation, and evaluation of career and 
     technical education programs assisted under this title, and 
     how such individuals and entities are effectively informed 
     about, and assisted in, understanding, the requirements of 
     this title, including career pathways;
       ``(6) provide assurances that the eligible recipient will 
     provide a career and technical education program that is of 
     such size, scope, and quality to bring about improvement in 
     the quality of career and technical education programs;
       ``(7) describe the process that will be used to evaluate 
     and continuously improve the performance of the eligible 
     recipient;
       ``(8) describe how the eligible recipient--
       ``(A) will review career and technical education programs, 
     and identify and adopt strategies to overcome barriers that 
     result in lowering rates of access to or lowering success in 
     the programs, for special populations; and
       ``(B) will provide programs that are designed to enable the 
     special populations to meet the local adjusted levels of 
     performance and prepare for high skill, high wage, or high 
     demand occupations, including those that will lead to self-
     sufficiency;
       ``(9) describe how individuals who are members of special 
     populations will not be discriminated against on the basis of 
     their status as members of the special populations;
       ``(10) describe how funds will be used to promote 
     preparation for nontraditional fields;
       ``(11) describe how career guidance and academic counseling 
     will be provided to all career and technical education 
     students; and
       ``(12) describe efforts to improve the recruitment and 
     retention of career and technical education teachers, 
     faculty, counselors, principals, and administrators, 
     including individuals in groups underrepresented in the 
     teaching profession, and the transition to teaching from 
     business and industry.''.

     SEC. 118. LOCAL USES OF FUNDS.

       Section 135 (20 U.S.C. 2355) is amended--
       (1) in subsection (a), by striking ``vocational'' and 
     inserting ``career'';
       (2) in subsection (b)--
       (A) in the matter preceding paragraph (1), by striking 
     ``vocational'' and inserting ``career''; and
       (B) by striking paragraphs (1) through (8) and inserting 
     the following:
       ``(1) strengthen the academic and career and technical 
     education skills of students participating in career and 
     technical education programs by strengthening the academic 
     and career and technical education components of such 
     programs through the integration of academics with career and 
     technical education programs through a coherent sequence of 
     courses, such as career pathways described in section 
     122(c)(1)(A), to ensure learning in the core academic 
     subjects and career and technical education subjects;
       ``(2) link secondary career and technical education and 
     postsecondary career and technical education, including by--
       ``(A) offering the relevant elements of not less than 1 
     career pathway described in section 122(c)(1)(A);
       ``(B) developing and supporting articulation agreements 
     between secondary and postsecondary institutions; or
       ``(C) supporting tech-prep programs and consortia;
       ``(3) provide students with strong experience in and 
     understanding of all aspects of an industry;
       ``(4) develop, improve, or expand the use of technology in 
     career and technical education, which may include--
       ``(A) training of career and technical education teachers, 
     faculty, principals, and administrators to use technology, 
     including distance learning; or
       ``(B) encouraging schools to collaborate with technology 
     industries to offer voluntary internships and mentoring 
     programs;
       ``(5) provide professional development programs that are 
     consistent with section 122 to secondary and postsecondary 
     teachers, faculty, principals, administrators, and career 
     guidance and academic counselors who are involved in 
     integrated career and technical education programs, 
     including--
       ``(A) in-service and pre-service training--
       ``(i) in career and technical education programs and 
     techniques;
       ``(ii) in effective integration of challenging academic and 
     career and technical education jointly with academic 
     teachers, to the extent practicable;
       ``(iii) in effective teaching skills based on research that 
     includes promising practices; and
       ``(iv) in effective practices to improve parental and 
     community involvement;
       ``(B) support of education programs that provide 
     information on all aspects of an industry;
       ``(C) internship programs that provide relevant business 
     experience; and
       ``(D) programs dedicated to the effective use of 
     instructional technology;
       ``(6) develop and implement evaluations of the career and 
     technical education programs carried out with funds under 
     this title, including an assessment of how the needs of 
     special populations are being met;
       ``(7) initiate, improve, expand, and modernize quality 
     career and technical education programs, including relevant 
     technology;
       ``(8) provide services and activities that are of 
     sufficient size, scope, and quality to be effective; and
       ``(9) provide activities to prepare special populations, 
     including single parents and displaced homemakers, for high 
     skill, high wage, or high demand occupations, including those 
     that will lead to self-sufficiency.''; and
       (3) in subsection (c)--
       (A) in paragraph (1), by striking ``vocational'' and 
     inserting ``career''; and
       (B) by striking paragraphs (2) through (15) and inserting 
     the following:
       ``(2) to provide career guidance and academic counseling 
     that is based on current labor market indicators, as provided 
     pursuant to section 118, for students participating in career 
     and technical education programs that--
       ``(A) improves graduation rates and provides information on 
     postsecondary and career options for secondary students, 
     which activities may include the use of graduation and career 
     plans; and
       ``(B) provides assistance for postsecondary students, 
     including for adult students who are changing careers or 
     updating skills;
       ``(3) for partnerships between the eligible recipient and 
     businesses, including small businesses and business 
     intermediaries, including for--
       ``(A) work-related experience for students, such as 
     internships, cooperative education, school-based enterprises, 
     entrepreneurship, and job shadowing that are related to 
     career and technical education programs;
       ``(B) adjunct faculty arrangements at the secondary and 
     postsecondary levels; and
       ``(C) industry experience for teachers and faculty;
       ``(4) to provide programs for special populations;
       ``(5) to assist career and technical student organizations;
       ``(6) for mentoring and support services;
       ``(7) for leasing, purchasing, upgrading, or adapting 
     instructional equipment;
       ``(8) for teacher preparation programs that address the 
     integration of academic and career and technical education 
     and that assist individuals who are interested in becoming 
     career and technical education teachers and faculty, 
     including individuals with experience in business and 
     industry;

[[Page 1192]]

       ``(9) to develop and expand postsecondary program offerings 
     at times and in formats that are convenient and accessible 
     for working students, including through the use of distance 
     education;
       ``(10) for improving or developing new career and technical 
     education courses, including development of new career 
     pathways;
       ``(11) to develop and support small, personalized career-
     themed learning communities;
       ``(12) to provide support for family and consumer sciences 
     programs;
       ``(13) to provide career and technical education programs 
     for adults and school dropouts to complete their secondary 
     school education or upgrade their technical skills;
       ``(14) to provide assistance to individuals who have 
     participated in services and activities under this title in 
     finding an appropriate job and continuing their education or 
     training through collaboration with the workforce investment 
     system established under the Workforce Investment Act of 1998 
     (29 U.S.C. 2801 et seq.);
       ``(15) to support activities in nontraditional fields, such 
     as mentoring and outreach; and
       ``(16) to support other career and technical education 
     activities that are consistent with the purpose of this 
     Act.''.

     SEC. 119. TECH-PREP EDUCATION.

       (a) Redesignation.--Title II (20 U.S.C. 2371 et seq.) is 
     amended--
       (1) by striking the title heading and inserting the 
     following:

                    ``PART D--TECH-PREP EDUCATION'';

       (2) by striking sections 201, 202, 206, and 207; and
       (3) by redesignating sections 203, 204, 205, and 208, as 
     sections 141, 142, 143, and 144, respectively.
       (b) State Allotment and Application.--Section 141 (as 
     redesignated by subsection (a) of this section) is amended--
       (1) in subsection (a), by striking ``section 206'' and 
     inserting ``section 144''; and
       (2) by striking subsection (c) and inserting the following:
       ``(c) State Application.--Each eligible agency desiring 
     assistance under this part shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information as the Secretary may require. Such 
     application shall describe how activities under this part 
     will be coordinated, to the extent practicable, with 
     activities described in section 122.''.
       (c) Tech-Prep Education.--Section 142 (as redesignated by 
     subsection (a) of this section) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``section 203'' and inserting ``section 
     141'';
       (ii) by striking ``title'' and inserting ``part'';
       (iii) by striking ``vocational'' both places the term 
     appears and inserting ``career''; and
       (iv) in subparagraph (A), by inserting ``, educational 
     service agency,'' after ``intermediate educational agency''; 
     and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking ``and'';
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and
       (iii) by adding at the end the following:
       ``(C) employers, including small businesses, or business 
     intermediaries; and
       ``(D) labor organizations.'';
       (2) in subsection (c)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) consist of not less than 2 years of secondary school 
     with a common core of technical skills and core academic 
     subjects preceding graduation and 2 years or more of higher 
     education, or an apprenticeship program of not less than 2 
     years following secondary instruction, designed to lead to 
     technical skill proficiency, a credential, a certificate, or 
     a degree, in a specific career field;'';
       (B) in paragraph (3)(B), by inserting ``including through 
     the use of articulation agreements, and'' after ``career 
     fields,'';
       (C) by striking paragraph (4) and inserting the following:
       ``(4) include in-service professional development for 
     teachers, faculty, principals, and administrators that--
       ``(A) supports effective implementation of tech-prep 
     programs;
       ``(B) supports joint training in the tech-prep consortium;
       ``(C) supports the needs, expectations, and methods of 
     business and all aspects of an industry;
       ``(D) supports the use of contextual and applied curricula, 
     instruction, and assessment;
       ``(E) supports the use and application of technology; and
       ``(F) assists in accessing and utilizing data, including 
     labor market indicators, achievement, and assessments;'';
       (D) in paragraph (5)--
       (i) by striking ``training'' and inserting ``professional 
     development'';
       (ii) in subparagraph (B), by inserting ``, which may 
     include through the use of graduation and career plans'' 
     after ``programs'';
       (iii) in subparagraph (D), by striking ``and'';
       (iv) in subparagraph (E), by inserting ``and'' after the 
     semicolon; and
       (v) by adding at the end the following:
       ``(F) provide comprehensive career guidance and academic 
     counseling to participating students, including special 
     populations;'';
       (E) in paragraph (6)--
       (i) by inserting ``(including pre-apprenticeship 
     programs)'' after ``programs''; and
       (ii) by striking ``and'' after the semicolon;
       (F) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (G) by adding at the end the following:
       ``(8) coordinate with activities conducted under this 
     title.''; and
       (3) in subsection (d)--
       (A) in paragraph (2), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (3), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(4) improve career guidance and academic counseling for 
     participating students through the development and 
     implementation of graduation and career plans; and
       ``(5) develop curriculum that supports effective 
     transitions between secondary and postsecondary career and 
     technical education programs.''.
       (d) Consortium Applications.--Section 143 (as redesignated 
     by subsection (a) of this section) is amended--
       (1) in subsection (a), by striking ``title'' and inserting 
     ``part'';
       (2) in subsection (b)--
       (A) by striking ``5'' and inserting ``6''; and
       (B) by striking ``title'' and inserting ``part'';
       (3) in subsection (d)--
       (A) in paragraph (1), by inserting ``or advanced'' after 
     ``baccalaureate'';
       (B) by striking paragraph (4) and inserting the following:
       ``(4) provide education and training in areas or skills, 
     including emerging technology, in which there are significant 
     workforce shortages based on the data provided by the entity 
     in the State under section 118;'';
       (C) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (D) by adding at the end the following:
       ``(6) demonstrate success in, or provide assurances of, 
     coordination and integration with eligible recipients 
     described in part C.''; and
       (4) in subsection (e), by striking ``title'' and inserting 
     ``part''.
       (e) Authorization of Appropriations.--Section 144 (as 
     redesignated by subsection (a) of this section) is amended--
       (1) by striking ``title (other than section 207)'' and 
     inserting ``part''; and
       (2) by striking ``1999 and each of the 4'' and inserting 
     ``2006 and each of the 5''.

                      TITLE II--GENERAL PROVISIONS

     SEC. 201. REDESIGNATION OF TITLE.

       (a) Federal Administrative Provisions.--Title III (20 
     U.S.C. 2391 et seq.) is amended by redesignating sections 311 
     through 318 as sections 211 through 218, respectively.
       (b) State Administrative Provisions.--Title III (20 U.S.C. 
     2391 et seq.) is amended by redesignating sections 321 
     through 325 as sections 221 through 225, respectively.
       (c) Title Heading.--The title heading of title III (20 
     U.S.C. 2391 et seq.) is amended to read as follows:

                   ``TITLE II--GENERAL PROVISIONS''.

     SEC. 202. FISCAL REQUIREMENTS.

       Section 211 (as redesignated by section 201 of this Act) is 
     amended--
       (1) by striking ``vocational'' each place the term appears 
     and inserting ``career''; and
       (2) in subsection (b)--
       (A) by striking paragraph (1) and inserting the following:
       ``(1) Determination.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), no payments shall be made under this Act for any 
     fiscal year to a State for career and technical education 
     programs or tech-prep programs unless the Secretary 
     determines that the average fiscal effort per student or the 
     aggregate expenditures of such State for career and technical 
     education programs for the 3 fiscal years preceding the 
     fiscal year for which the determination is made, equaled or 
     exceeded such effort or expenditures for career and technical 
     education programs, for the 3 fiscal years preceding the 
     fiscal year for which the determination is made.
       ``(B) Computation.--In computing the average fiscal effort 
     or aggregate expenditures pursuant to subparagraph (A), the 
     Secretary shall exclude capital expenditures, special one-
     time project costs, and the cost of pilot programs.
       ``(C) Decrease in federal support.--If the amount made 
     available for career and technical education programs under 
     this Act for a fiscal year is less than the amount made 
     available for career and technical education programs under 
     this Act for the preceding fiscal year, then the average 
     fiscal effort per student or the aggregate expenditures of a 
     State required by subparagraph (A) for the 3 preceding fiscal 
     years shall be decreased by the same percentage as the 
     percentage decrease in the amount so made available.''; and
       (B) in paragraph (2), by striking ``fiscal effort'' both 
     places the term appears and inserting ``average fiscal 
     effort''.

[[Page 1193]]



     SEC. 203. VOLUNTARY SELECTION AND PARTICIPATION.

       Section 214 (as redesignated by section 201 of this Act) is 
     amended by striking ``vocational'' both places the term 
     appears and inserting ``career''.

     SEC. 204. LIMITATION FOR CERTAIN STUDENTS.

       Section 215 (as redesignated by section 201 of this Act) is 
     amended by striking ``vocational'' and inserting ``career''.

     SEC. 205. AUTHORIZATION OF SECRETARY; PARTICIPATION OF 
                   PRIVATE SCHOOL PERSONNEL.

       Part A of title II (as redesignated by section 201 of this 
     Act) is amended--
       (1) by striking section 217;
       (2) by redesignating section 218 as section 217; and
       (3) in section 217 (as redesignated by paragraph (2) of 
     this section)--
       (A) by inserting ``principals,'' after ``for vocational and 
     technical education teachers,'';
       (B) by inserting ``principals,'' after ``of vocational and 
     technical education teachers,''; and
       (C) by striking ``vocational'' each place the term appears 
     and inserting ``career''.

     SEC. 206. STUDENT ASSISTANCE AND OTHER FEDERAL PROGRAMS.

       Section 225(c) (as redesignated by section 201 of this Act) 
     is amended--
       (1) in the subsection heading, by striking ``Vocational'' 
     and inserting ``Career''; and
       (2) by striking ``vocational'' both places the term appears 
     and inserting ``career''.

     SEC. 207. TABLE OF CONTENTS.

       Section 1(b) (20 U.S.C. 2301 note) is amended to read as 
     follows:
       ``(b) Table of Contents.--The table of contents for this 
     Act is as follows:

``Sec. 1. Short title; table of contents.
``Sec. 2. Purpose.
``Sec. 3. Definitions.
``Sec. 4. Transition provisions.
``Sec. 5. Privacy.
``Sec. 6. Limitation.
``Sec. 7. Special rule.
``Sec. 8. Authorization of appropriations.

   ``TITLE I--CAREER AND TECHNICAL EDUCATION ASSISTANCE TO THE STATES

                   ``Part A--Allotment and Allocation

``Sec. 111. Reservations and State allotment.
``Sec. 112. Within State allocation.
``Sec. 113. Accountability.
``Sec. 114. National activities.
``Sec. 115. Assistance for the outlying areas.
``Sec. 116. Native American program.
``Sec. 117. Tribally controlled postsecondary career and technical 
              institutions.
``Sec. 118. Occupational and employment information.

                       ``Part B--State Provisions

``Sec. 121. State administration.
``Sec. 122. State plan.
``Sec. 123. Improvement plans.
``Sec. 124. State leadership activities.

                       ``Part C--Local Provisions

``Sec. 131. Distribution of funds to secondary school programs.
``Sec. 132. Distribution of funds for postsecondary career and 
              technical education programs.
``Sec. 133. Special rules for career and technical education.
``Sec. 134. Local plan for career and technical education programs.
``Sec. 135. Local uses of funds.

                     ``Part D--Tech-Prep Education

``Sec. 141. State allotment and application.
``Sec. 142. Tech-prep education.
``Sec. 143. Consortium applications.
``Sec. 144. Authorization of appropriations.

                     ``TITLE II--GENERAL PROVISIONS

              ``Part A--Federal Administrative Provisions

``Sec. 211. Fiscal requirements.
``Sec. 212. Authority to make payments.
``Sec. 213. Construction.
``Sec. 214. Voluntary selection and participation.
``Sec. 215. Limitation for certain students.
``Sec. 216. Federal laws guaranteeing civil rights.
``Sec. 217. Participation of private school personnel.

               ``Part B--State Administrative Provisions

``Sec. 221. Joint funding.
``Sec. 222. Prohibition on use of funds to induce out-of-State 
              relocation of businesses.
``Sec. 223. State administrative costs.
``Sec. 224. Limitation on Federal regulations.
``Sec. 225. Student assistance and other Federal programs.''.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 252. A bill to direct the Secretary of the Interior to convey 
certain land in Washoe County, Nevada, to the Board of Regents of the 
University and Community College System of Nevada; to the Committee on 
Energy and Natural Resources.
  Mr. REID. Mr. President, I rise today to introduce the Dandini 
Research Park Transfer Act on behalf of myself and Senator Ensign. This 
bill will transfer an important tract of land in Washoe County, NV, to 
the University and Community College System of Nevada.
  The University of Nevada holds two patents from the Bureau of Land 
Management for approximately 467 acres of public land located north of 
downtown Reno. In the early 1970s, the land was patented to the 
university pursuant to the Recreation and Public Purposes Act. Now 
known as the Dandini Research Park, it is the home of Truckee Meadows 
Community College and the Desert Research Institute's Northern Nevada 
Science Center.
  Truckee Meadows Community College and its predecessor, Western Nevada 
Community College, have provided educational programs and opportunities 
to the residents of Reno, Sparks, and the surrounding communities for 
over 30 years. Construction of the College's facilities on the Dandini 
campus began in 1975, shortly after conveyance of the original patents.
  For over 25 years the Desert Research Institute has excelled in 
applied scientific research and the application of technologies to 
improve people's lives in Nevada and throughout the world. Its three 
core divisions of Atmospheric, Hydrologic, and Earth and Ecosystem 
Sciences cooperate with two interdisciplinary centers to provide 
innovative solutions to pressing environmental problems. The Center for 
Arid Lands Environmental Management and the Center for Watersheds and 
Environmental Sustainability apply scientific understanding to the 
effective management of natural resources while addressing our needs 
for economic diversification and science-based educational 
opportunities. In doing so, DRI undertakes fundamental scientific 
research in Nevada and around the globe. For example, as a key 
participant in the U.S. Geological Survey Water Research Program, DRI 
plays a critical role in identifying and helping protect the region's 
scarce water resources.
  DRI shares its facility with the Western Regional Climate Center, one 
of six regional climate centers operating under the National Oceanic 
and Atmospheric Administration's climate program. The Western Regional 
Climate Center conducts applied research and provides high quality 
climate data and information pertaining to the western United States.
  The Desert Research Institute wishes to expand its Northern Nevada 
Science Center. DRI is considering an innovative means of financing the 
expansion, which would involve a private developer who would build and 
finance the expansion and lease it back to DRI. The private developers 
with whom DRI has discussed the proposal, as well as the Institute's 
counsel, however, have pointed out that the terms of the patents and 
the restrictions imposed by the Recreation and Public Purposes Act 
represent obstacles to such an arrangement.
  Truckee Meadows Community College and the Northern Nevada Science 
Center are exceptional assets of the scientific and educational 
community in the Truckee Meadows. The Center serves not only the 
citizens of Washoe County, but the needs of all Nevadans and the 
western United States as well. It deserves the opportunity to grow and 
prosper with the community--one of the fastest-growing communities in 
the Nation.
  The bill Senator Ensign and I present to you today simply directs the 
Secretary of the Interior to convey this property from the Bureau of 
Land Management to the University and Community College System of 
Nevada. Because of the overwhelming public benefit provided by the 
Center, we ask that the land be conveyed for free, but that the 
University cover the costs of the transaction.
  During the 108th Congress this legislation received strong support 
from my colleagues and was passed by both the Energy and Natural 
Resources Committee and the Senate as a whole. I look forward to 
working with my fellow senators during this session to usher this 
important legislation towards final passage.

[[Page 1194]]

  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 252

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Dandini Research Park 
     Conveyance Act''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Board of regents.--The term ``Board of Regents'' means 
     the Board of Regents of the University and Community College 
     System of Nevada.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.

     SEC. 3. CONVEYANCE TO THE UNIVERSITY AND COMMUNITY COLLEGE 
                   SYSTEM OF NEVADA.

       (a) Conveyance.--
       (1) In general.--The Secretary shall convey to the Board of 
     Regents, without consideration, all right, title, and 
     interest of the United States in and to the approximately 467 
     acres of land located in Washoe County, Nevada, patented to 
     the University of Nevada under the Act of June 14, 1926 
     (commonly known as the ``Recreation and Public Purposes 
     Act'') (43 U.S.C. 869 et seq.), and described in paragraph 
     (2).
       (2) Description of land.--The land referred to in paragraph 
     (1) is--
       (A) the parcel of land consisting of approximately 309.11 
     acres and more particularly described as T. 20 N., R. 19 E., 
     Sec. 25, lots 1, 2, 3, 4, 5, and 11, SE\1/4\NW\1/4\, NE\1/
     4\SW\1/4\, Mount Diablo Meridian, Nevada; and
       (B) the parcel of land consisting of approximately 158.22 
     acres and more particularly described as T. 20 N., R. 19 E., 
     Sec. 25, lots 6 and 7, SW\1/4\NE\1/4\, NW\1/4\SE\1/4\, Mount 
     Diablo Meridian, Nevada.
       (b) Costs.--The Board of Regents shall pay to the United 
     States an amount equal to the costs of the Secretary 
     associated with the conveyance under subsection (a)(1).
       (c) Conditions.--If the Board of Regents sells any portion 
     of the land conveyed to the Board of Regents under subsection 
     (a)(1)--
       (1) the amount of consideration for the sale shall reflect 
     fair market value, as determined by an appraisal; and
       (2) the Board of Regents shall pay to the Secretary an 
     amount equal to the net proceeds of the sale, for use by the 
     Director of the Bureau of Land Management in the State of 
     Nevada, without further appropriation.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 253. A bill to direct the Secretary of the Interior to convey 
certain land to the Edward H. McDaniel American Legion Post No. 22 in 
Pahrump, Nevada, for the construction of a post building and memorial 
park for use by the American Legion, other veterans' groups, and the 
local community; to the Committee on Energy and Natural Resources.
  Mr. REID. Mr. President, I rise today to introduce the Pahrump 
American Legion Post Land Conveyance Act for myself and Senator Ensign. 
This Act will transfer approximately 5 acres of BLM land in Pahrump, 
NV, to the American Legion for the purpose of constructing a post home 
and other facilities that will benefit veterans' groups and the local 
community.
  The American Legion and other non-profit organizations that represent 
our Nation's veterans in the vicinity of Pahrump have tripled in size 
over the last 10 years. The local memberships of the American Legion, 
the Veterans of Foreign Wars, and the Disabled American Veterans will 
soon exceed 1,000 members, and these groups will continue to expand as 
Pahrump draws more and more new residents.
  The existing facility used by the veterans in Pahrump was built by 
the Veterans of Foreign Wars in the 1960s. It is much too small and not 
at all adequate for the veterans' current needs. The nearest facility 
that can accommodate them is located in Las Vegas more than 60 miles 
away.
  The Pahrump American Legion would like to build a post building, 
veterans' garden, and memorial park. These new facilities would benefit 
not only the local veterans, but would be made available--at no cost--
for community activities. The American Legion has tried for over six 
years to acquire a suitable tract of land to provide a home for a new 
veterans center. The Legion started a pledge campaign and raised over 
$16,000 for the building fund before the parcel of land they sought to 
acquire was removed from consideration by the BLM. Unfortunately, other 
tracts of land that might represent alternative sites in Pahrump are 
not suitable.
  This situation is truly regrettable. Without a home, the Pahrump 
American Legion Post can't offer the kind of services and programs that 
the veterans in the area deserve. Our veterans aren't the only ones who 
are suffering, either. All across the United States, the American 
Legion is deservedly famous for supporting community activities like 
the Boy Scouts and Girl Scouts, as well as the National Oratorical 
Contest, American Legion Baseball, Girls and Boys State, and other 
activities for young people. All of these worthy groups and projects 
would benefit from the construction of a new post home, and from the 
conveyance of this small parcel of federal land. In sum, this bill is 
good for veterans, good for kids, and good for hard-working Nevada 
families.
  Our bill simply directs the Secretary of the Interior to convey this 
property from the Bureau of Land Management to American Legion ``Edward 
H McDaniel'' Post No. 22 in Pahrump. Because of the great public 
benefit such a facility will provide, we ask that the land be conveyed 
for free, but that the American Legion cover the costs of the 
transaction.
  I was pleased that my distinguished colleagues recognized the value 
of this legislation during the 108th Congress and supported its passage 
by the Energy and Natural Resources Committee and by the Senate as a 
whole. I look forward to working with my friends to move this bill in a 
timely manner during the current session.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 253

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Edward H. McDaniel American 
     Legion Post No. 22 Land Conveyance Act''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Post no. 22.--The term ``Post No. 22'' means the Edward 
     H. McDaniel American Legion Post No. 22 in Pahrump, Nevada.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Director of the Bureau of 
     Land Management.

     SEC. 3. CONVEYANCE OF LAND TO EDWARD H. MCDANIEL AMERICAN 
                   LEGION POST NO. 22.

       (a) Conveyance on Condition Subsequent.--Not later than 180 
     days after the date of enactment of this Act, subject to 
     valid existing rights and the condition stated in subsection 
     (c) and in accordance with the Act of June 14, 1926 (commonly 
     known as the ``Recreation and Public Purposes Act'') (43 
     U.S.C. 869 et seq.), the Secretary shall convey to Post No. 
     22, for no consideration, all right, title, and interest of 
     the United States in and to the parcel of land described in 
     subsection (b).
       (b) Description of Land.--The parcel of land referred to in 
     subsection (b) is the parcel of Bureau of Land Management 
     land that--
       (1) is bounded by Route 160, Bride Street, and Dandelion 
     Road in Nye County, Nevada;
       (2) consists of approximately 4.5 acres of land; and
       (3) is more particularly described as a portion of the S 
     \1/4\ of section 29, T. 20 S., R. 54 E., Mount Diablo and 
     Base Meridian.
       (c) Condition on Use of Land.--
       (1) In general.--Post No. 22 and any successors of Post No. 
     22 shall use the parcel of land described in section (b) for 
     the construction and operation of a post building and 
     memorial park for use by Post No. 22, other veterans groups, 
     and the local community for events and activities.
       (2) Reversion.--Except as provided in paragraph (3), if the 
     Secretary, after notice to Post No. 22 and an opportunity for 
     a hearing, makes a finding that Post No. 22 has used or 
     permitted the use of the parcel for any purpose other than 
     the purpose specified in paragraph (1) and Post No. 22 fails 
     to discontinue that use, title to the parcel shall revert to 
     the United States, to be administered by the Secretary.
       (3) Waiver.--The Secretary may waive the requirements of 
     paragraph (2) if the Secretary determines that a waiver would 
     be in the best interests of the United States.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 254. A bill to direct the Secretary of the Interior to convey 
certain land

[[Page 1195]]

to Lander County, Nevada, and the Secretary of the Interior to convey 
certain land to Eureka County, Nevada, for continued use as cemeteries; 
to the Committee on Energy' and Natural Resources.
  Mr. REID. Mr. President, I rise today for myself and Senator Ensign 
to introduce this bill, which will address a long standing public land 
issue in central Nevada. As you may know, the Federal Government 
controls over 87 percent of the lands in the State of Nevada. This 
means that Nevadans must frequently seek the assistance of Congress to 
deal with land issues that would otherwise be relatively uncomplicated. 
Today we offer a bill to address a simple land ownership issue in 
Lander and Eureka Counties.
  This bill would convey two small cemeteries in central Nevada from 
federal control back to the local communities to which they should 
belong. The cemeteries in question the Kingston Cemetery in Lander 
County and the Maiden's Grave Cemetery in Eureka County--were first 
established by pioneers and immigrants who settled the isolated high 
desert valleys of the Great Basin in the mid-1800s. These same pioneers 
created the Kingston and Maiden's Grave cemeteries to serve as sacred 
resting places for friends and family. Unfortunately, years after their 
founding, the private nature of these lands was overlooked and the 
cemeteries were placed in the hands of federal land management 
agencies. Today much of the original Kingston Cemetery is on land 
managed by the U.S. Forest Service and the Maiden's Grave Cemetery in 
Beowawe sits on land managed by the Bureau of Land Management.
  Under current law, these agencies must sell the cemeteries back to 
the communities at fair market value. However, these historic 
cemeteries were established prior to the designation of the Federal 
agencies that now manage them. For years, Lander County has been 
required to lease much of the Kingston Cemetery from the Forest 
Service. The Forest Service previously sold approximately 1 acre to the 
Town of Kingston, but this land transfer did not allow for the 
protection of uncharted graves or for the implementation of the 
communty' s original site plan.
  Because the people of Beowawe and Kingston should not have to buy or 
lease cemeteries that are rightfully theirs, our bill provides for the 
simple conveyance of the Maiden's Grave Cemetery to Eureka County and 
the balance of the original location of the Kingston Cemetery to Lander 
County, NV. The conveyances provided by this bill will benefit our 
federal land managers as well as our rural communities. The disposal of 
these small parcels of land for no consideration will benefit the 
United States because they represent isolated tracts that prove 
difficult to manage for public use.
  In the 108th Congress I was pleased that this bill received approval 
from the Energy and Natural Resources Committee and from the Senate as 
a whole. I look forward to working with my colleagues to complete this 
small conveyance during the current Congress. It is time that we 
restore ownership of these two small rural cemeteries to the 
communities to which they rightfully belong.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 254

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Central Nevada Rural 
     Cemeteries Act''.

     SEC. 2. CONVEYANCE TO LANDER COUNTY, NEVADA.

       (a) Findings.--Congress finds that--
       (1) the historical use by settlers and travelers since the 
     late 1800's of the cemetery known as ``Kingston Cemetery'' in 
     Kingston, Nevada, predates incorporation of the land within 
     the jurisdiction of the Forest Service on which the cemetery 
     is situated;
       (2) it is appropriate that that use be continued through 
     local public ownership of the parcel rather than through the 
     permitting process of the Federal agency;
       (3) in accordance with Public Law 85-569 (commonly known as 
     the ``Townsite Act'') (16 U.S.C. 478a), the Forest Service 
     has conveyed to the Town of Kingston 1.25 acres of the land 
     on which historic gravesites have been identified; and
       (4) to ensure that all areas that may have unmarked 
     gravesites are included, and to ensure the availability of 
     adequate gravesite space in future years, an additional 
     parcel consisting of approximately 8.75 acres should be 
     conveyed to the county so as to include the total amount of 
     the acreage included in the original permit issued by the 
     Forest Service for the cemetery.
       (b) Conveyance on Condition Subsequent.--Subject to valid 
     existing rights and the condition stated in subsection (e), 
     the Secretary of Agriculture, acting through the Chief of the 
     Forest Service (referred to in this section as the 
     ``Secretary''), not later than 90 days after the date of 
     enactment of this Act, shall convey to Lander County, Nevada 
     (referred to in this section as the ``county''), for no 
     consideration, all right, title, and interest of the United 
     States in and to the parcel of land described in subsection 
     (c).
       (c) Description of Land.--The parcel of land referred to in 
     subsection (b) is the parcel of National Forest System land 
     (including any improvements on the land) known as ``Kingston 
     Cemetery'', consisting of approximately 10 acres and more 
     particularly described as SW\1/4\SE\1/4\SE\1/4\ of section 
     36, T. 16N., R. 43E., Mount Diablo Meridian.
       (d) Easement.--At the time of the conveyance under 
     subsection (b), subject to subsection (e)(2), the Secretary 
     shall grant the county an easement allowing access for 
     persons desiring to visit the cemetery and other cemetery 
     purposes over Forest Development Road #20307B, 
     notwithstanding any future closing of the road for other use.
       (e) Condition on Use of Land.--
       (1) In general.--The county (including its successors) 
     shall continue the use of the parcel conveyed under 
     subsection (b) as a cemetery.
       (2) Reversion.--If the Secretary, after notice to the 
     county and an opportunity for a hearing, makes a finding that 
     the county has used or permitted the use of the parcel for 
     any purpose other than the purpose specified in paragraph 
     (1), and the county fails to discontinue that use--
       (A) title to the parcel shall revert to the Secretary, to 
     be administered by the Secretary; and
       (B) the easement granted to the county under subsection (d) 
     shall be revoked.
       (3) Waiver.--The Secretary may waive the application of 
     subparagraph (A) or (B) of paragraph (2) if the Secretary 
     determines that a waiver would be in the best interests of 
     the United States.

     SEC. 3. CONVEYANCE TO EUREKA COUNTY, NEVADA.

       (a) Findings.--Congress finds that--
       (1) the historical use by settlers and travelers since the 
     late 1800's of the cemetery known as ``Maiden's Grave 
     Cemetery'' in Beowawe, Nevada, predates incorporation of the 
     land within the jurisdiction of the Bureau of Land Management 
     on which the cemetery is situated; and
       (2) it is appropriate that that use be continued through 
     local public ownership of the parcel rather than through the 
     permitting process of the Federal agency.
       (b) Conveyance on Condition Subsequent.--Subject to valid 
     existing rights and the condition stated in subsection (e), 
     the Secretary of the Interior, acting through the Director of 
     the Bureau of Land Management (referred to in this section as 
     the ``Secretary''), not later than 90 days after the date of 
     enactment of this Act, shall convey to Eureka County, Nevada 
     (referred to in this section as the ``county''), for no 
     consideration, all right, title, and interest of the United 
     States in and to the parcel of land described in subsection 
     (c).
       (c) Description of Land.--The parcel of land referred to in 
     subsection (b) is the parcel of public land (including any 
     improvements on the land) known as ``Maiden's Grave 
     Cemetery'', consisting of approximately 10 acres and more 
     particularly described as S\1/2\NE\1/4\SW\1/4\SW\1/4\, N\1/
     2\SE\1/4\SW\1/4\SW\1/4\ of section 10, T.31N., R.49E., Mount 
     Diablo Meridian.
       (d) Easement.--At the time of the conveyance under 
     subsection (b), subject to subsection (e)(2), the Secretary 
     shall grant the county an easement allowing access for 
     persons desiring to visit the cemetery and other cemetery 
     purposes over an appropriate access route consistent with 
     current access.
       (e) Condition on Use of Land.--
       (1) In general.--The county (including its successors) 
     shall continue the use of the parcel conveyed under 
     subsection (b) as a cemetery.
       (2) Reversion.--If the Secretary, after notice to the 
     county and an opportunity for a hearing, makes a finding that 
     the county has used or permitted the use of the parcel for 
     any purpose other than the purpose specified in paragraph 
     (1), and the county fails to discontinue that use--
       (A) title to the parcel shall revert to the Secretary, to 
     be administered by the Secretary; and
       (B) the easement granted to the county under subsection (d) 
     shall be revoked.

[[Page 1196]]

       (3) Waiver.--The Secretary may waive the application of 
     subparagraph (A) or (B) of paragraph (2) if the Secretary 
     determines that a waiver would be in the best interests of 
     the United States.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Hatch, Mr. Sessions, Mr. Thune, 
        Mr. Carper, Mr. Nelson of Nebraska, Mr. Shelby, and Mr. Enzi):
  S. 256. A bill to amend title 11 of the United States Code, and for 
other purposes; to the Committee on the Judiciary.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of 
this bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 256

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

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

       (a) Short Title.--This Act may be cited as the ``Bankruptcy 
     Abuse Prevention and Consumer Protection Act of 2005''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

                    TITLE I--NEEDS-BASED BANKRUPTCY

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

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

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

                   Subtitle B--Priority Child Support

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

                 Subtitle C--Other Consumer Protections

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

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not 
              complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. Reduction of homestead exemption for fraud.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide 
              required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the 
              plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the 
              Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitations on homestead exemption.
Sec. 323. Excluding employee benefit plan participant contributions and 
              other property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy 
              professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
Sec. 329. Clarification of postpetition wages and benefits.
Sec. 330. Delay of discharge during pendency of certain proceedings.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

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

            Subtitle B--Small Business Bankruptcy Provisions

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

                       TITLE VI--BANKRUPTCY DATA

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

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

Sec. 701. Treatment of certain liens.

[[Page 1197]]

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

            TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE

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

      TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1501. Effective date; application of amendments.
Sec. 1502. Technical corrections.
                    TITLE I--NEEDS-BASED BANKRUPTCY

     SEC. 101. CONVERSION.

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

     SEC. 102. DISMISSAL OR CONVERSION.

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

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

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

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

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

[[Page 1198]]

       ``(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 a case under this chapter violated rule 9011 of the 
     Federal Rules of Bankruptcy Procedure.
       ``(B) If the court finds that the attorney for the debtor 
     violated rule 9011 of the Federal Rules of Bankruptcy 
     Procedure, the court, on its own initiative or on the motion 
     of a party in interest, in accordance with such procedures, 
     may order--
       ``(i) the assessment of an appropriate civil penalty 
     against the attorney for the debtor; and
       ``(ii) the payment of such civil penalty to the trustee, 
     the United States trustee (or the bankruptcy administrator, 
     if any).
       ``(C) The signature of an attorney on a petition, pleading, 
     or written motion shall constitute a certification that the 
     attorney has--
       ``(i) performed a reasonable investigation into the 
     circumstances that gave rise to the petition, pleading, or 
     written motion; and
       ``(ii) determined that the petition, pleading, or written 
     motion--
       ``(I) is well grounded in fact; and
       ``(II) is warranted by existing law or a good faith 
     argument for the extension, modification, or reversal of 
     existing law and does not constitute an abuse under paragraph 
     (1).
       ``(D) The signature of an attorney on the petition shall 
     constitute a certification that the attorney has no knowledge 
     after an inquiry that the information in the schedules filed 
     with such petition is incorrect.
       ``(5)(A) Except as provided in subparagraph (B) and subject 
     to paragraph (6), the court, on its own initiative or on the 
     motion of a party in interest, in accordance with the 
     procedures described in rule 9011 of the Federal Rules of 
     Bankruptcy Procedure, may award a debtor all reasonable costs 
     (including reasonable attorneys' fees) in contesting a motion 
     filed by a party in interest (other than a trustee or United 
     States trustee (or bankruptcy administrator, if any)) under 
     this subsection if--
       ``(i) the court does not grant the motion; and
       ``(ii) the court finds that--
       ``(I) the position of the party that filed the motion 
     violated rule 9011 of the Federal Rules of Bankruptcy 
     Procedure; or
       ``(II) the attorney (if any) who filed the motion did not 
     comply with the requirements of clauses (i) and (ii) of 
     paragraph (4)(C), and the motion was made solely for the 
     purpose of coercing a debtor into waiving a right guaranteed 
     to the debtor under this title.
       ``(B) A small business that has a claim of an aggregate 
     amount less than $1,000 shall not be subject to subparagraph 
     (A)(ii)(I).
       ``(C) For purposes of this paragraph--
       ``(i) the term `small business' means an unincorporated 
     business, partnership, corporation, association, or 
     organization that--
       ``(I) has fewer than 25 full-time employees as determined 
     on the date on which the motion is filed; and
       ``(II) is engaged in commercial or business activity; and
       ``(ii) the number of employees of a wholly owned subsidiary 
     of a corporation includes the employees of--
       ``(I) a parent corporation; and
       ``(II) any other subsidiary corporation of the parent 
     corporation.
       ``(6) Only the judge or United States trustee (or 
     bankruptcy administrator, if any) may file a motion under 
     section 707(b), if the current monthly income of the debtor, 
     or in a joint case, the debtor and the debtor's spouse, as of 
     the date of the order for relief, when multiplied by 12, is 
     equal to or less than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4.
       ``(7)(A) No judge, United States trustee (or bankruptcy 
     administrator, if any), trustee, or other party in interest 
     may file a motion under paragraph (2) if the current monthly 
     income of the debtor and the debtor's spouse combined, as of 
     the date of the order for relief when multiplied by 12, is 
     equal to or less than--
       ``(i) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(ii) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(iii) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4.

[[Page 1199]]

       ``(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
       (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--

[[Page 1200]]

       ``(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 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

[[Page 1201]]

       (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 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

[[Page 1202]]

     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 end credit plan, as the 
     terms `credit' and `open end credit plan' are defined in 
     section 103 of the Truth in Lending Act, then--
       ``(I) the annual percentage rate determined under 
     paragraphs (5) and (6) of section 127(b) of the Truth in 
     Lending Act, as applicable, as disclosed to the debtor in the 
     most recent periodic statement prior to entering into an 
     agreement of the kind specified in subsection (c) or, if no 
     such periodic statement has been given to the debtor during 
     the prior 6 months, the annual percentage rate as it would 
     have been so disclosed at the time the disclosure statement 
     is given to the debtor, or to the extent this annual 
     percentage rate is not readily available or not applicable, 
     then
       ``(II) the simple interest rate applicable to the amount 
     reaffirmed as of the date the disclosure statement is given 
     to the debtor, or if different simple interest rates apply to 
     different balances, the simple interest rate applicable to 
     each such balance, identifying the amount of each such 
     balance included in the amount reaffirmed, or
       ``(III) if the entity making the disclosure elects, to 
     disclose the annual percentage rate under subclause (I) and 
     the simple interest rate under subclause (II); or
       ``(ii) if, at the time the petition is filed, the debt is 
     an extension of credit other than under an open end credit 
     plan, as the terms `credit' and `open end credit plan' are 
     defined in section 103 of the Truth in Lending Act, then--
       ``(I) the annual percentage rate under section 128(a)(4) of 
     the Truth in Lending Act, as disclosed to the debtor in the 
     most recent disclosure statement given to the debtor prior to 
     the entering into an agreement of the kind specified in 
     subsection (c) with respect to the debt, or, if no such 
     disclosure statement was given to the debtor, the annual 
     percentage rate as it would have been so disclosed at the 
     time the disclosure statement is given to the debtor, or to 
     the extent this annual percentage rate is not readily 
     available or not applicable, then
       ``(II) the simple interest rate applicable to the amount 
     reaffirmed as of the date the disclosure statement is given 
     to the debtor, or if different simple interest rates apply to 
     different balances, the simple interest rate applicable to 
     each such balance, identifying the amount of such balance 
     included in the amount reaffirmed, or
       ``(III) if the entity making the disclosure elects, to 
     disclose the annual percentage rate under (I) and the simple 
     interest rate under (II).
       ``(F) If the underlying debt transaction was disclosed as a 
     variable rate transaction on the most recent disclosure given 
     under the Truth in Lending Act, by stating `The interest rate 
     on your loan may be a variable interest rate which changes 
     from time to time, so that the annual percentage rate 
     disclosed here may be higher or lower.'.
       ``(G) If the debt is secured by a security interest which 
     has not been waived in whole or in part or determined to be 
     void by a final order of the court at the time of the 
     disclosure, by disclosing that a security interest or lien in 
     goods or property is asserted over some or all of the debts 
     the debtor is reaffirming and listing the items and their 
     original purchase price that are subject to the asserted 
     security interest, or if not a purchase-money security 
     interest then listing by items or types and the original 
     amount of the loan.
       ``(H) At the election of the creditor, a statement of the 
     repayment schedule using 1 or a combination of the 
     following--
       ``(i) by making the statement: `Your first payment in the 
     amount of $___ is due on ___ but the future payment amount 
     may be different. Consult your reaffirmation agreement or 
     credit agreement, as applicable.', and stating the amount of 
     the first payment and the due date of that payment in the 
     places provided;
       ``(ii) by making the statement: `Your payment schedule will 
     be:', and describing the repayment schedule with the number, 
     amount, and due dates or period of payments scheduled to 
     repay the debts reaffirmed to the extent then known by the 
     disclosing party; or

[[Page 1203]]

       ``(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).
       `` `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.

[[Page 1204]]

       ``(m)(1) Until 60 days after an agreement of the kind 
     specified in subsection (c) is filed with the court (or such 
     additional period as the court, after notice and a hearing 
     and for cause, orders before the expiration of such period), 
     it shall be presumed that such agreement is an undue hardship 
     on the debtor if the debtor's monthly income less the 
     debtor's monthly expenses as shown on the debtor's completed 
     and signed statement in support of such agreement required 
     under subsection (k)(6)(A) is less than the scheduled 
     payments on the reaffirmed debt. This presumption shall be 
     reviewed by the court. The presumption may be rebutted in 
     writing by the debtor if the statement includes an 
     explanation that identifies additional sources of funds to 
     make the payments as agreed upon under the terms of such 
     agreement. If the presumption is not rebutted to the 
     satisfaction of the court, the court may disapprove such 
     agreement. No agreement shall be disapproved without notice 
     and a hearing to the debtor and creditor, and such hearing 
     shall be concluded before the entry of the debtor's 
     discharge.
       ``(2) This subsection does not apply to reaffirmation 
     agreements where the creditor is a credit union, as defined 
     in section 19(b)(1)(A)(iv) of the Federal Reserve Act.''.
       (b) Law Enforcement.--
       (1) In general.--Chapter 9 of title 18, United States Code, 
     is amended by adding at the end the following:

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

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

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

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

       Section 363 of title 11, United States Code, is amended--
       (1) by redesignating subsection (o) as subsection (p), and
       (2) by inserting after subsection (n) the following:
       ``(o) Notwithstanding subsection (f), if a person purchases 
     any interest in a consumer credit transaction that is subject 
     to the Truth in Lending Act or any interest in a consumer 
     credit contract (as defined in section 433.1 of title 16 of 
     the Code of Federal Regulations (January 1, 2004), as amended 
     from time to time), and if such interest is purchased through 
     a sale under this section, then such person shall remain 
     subject to all claims and defenses that are related to such 
     consumer credit transaction or such consumer credit contract, 
     to the same extent as such person would be subject to such 
     claims and defenses of the consumer had such interest been 
     purchased at a sale not under this section.''.

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

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

     SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

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

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

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

[[Page 1205]]



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

       Title 11, United States Code, is amended--
       (1) in section 1129(a), by adding at the end the following:
       ``(14) If the debtor is required by a judicial or 
     administrative order, or by statute, to pay a domestic 
     support obligation, the debtor has paid all amounts payable 
     under such order or such statute for such obligation that 
     first become payable after the date of the filing of the 
     petition.'';
       (2) in section 1208(c)--
       (A) in paragraph (8), by striking ``or'' at the end;
       (B) in paragraph (9), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(10) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date of the 
     filing of the petition.'';
       (3) in section 1222(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period 
     beginning on the date that the first payment is due under the 
     plan will be applied to make payments under the plan.'';
       (4) in section 1222(b)--
       (A) in paragraph (10), by striking ``and'' at the end;
       (B) by redesignating paragraph (11) as paragraph (12); and
       (C) by inserting after paragraph (10) the following:
       ``(11) provide for the payment of interest accruing after 
     the date of the filing of the petition on unsecured claims 
     that are nondischargeable under section 1228(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims; 
     and'';
       (5) in section 1225(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) the debtor has paid all amounts that are required to 
     be paid under a domestic support obligation and that first 
     become payable after the date of the filing of the petition 
     if the debtor is required by a judicial or administrative 
     order, or by statute, to pay such domestic support 
     obligation.'';
       (6) in section 1228(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order, or by 
     statute, to pay a domestic support obligation, after such 
     debtor certifies that all amounts payable under such order or 
     such statute that are due on or before the date of the 
     certification (including amounts due before the petition was 
     filed, but only to the extent provided for by the plan) have 
     been paid'' after ``completion by the debtor of all payments 
     under the plan'';
       (7) in section 1307(c)--
       (A) in paragraph (9), by striking ``or'' at the end;
       (B) in paragraph (10), by striking the period at the end 
     and inserting ``; or''; and
       (C) by adding at the end the following:
       ``(11) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date of the 
     filing of the petition.'';
       (8) in section 1322(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period 
     beginning on the date that the first payment is due under the 
     plan will be applied to make payments under the plan.'';
       (9) in section 1322(b)--
       (A) in paragraph (9), by striking ``; and'' and inserting a 
     semicolon;
       (B) by redesignating paragraph (10) as paragraph (11); and
       (C) inserting after paragraph (9) the following:
       ``(10) provide for the payment of interest accruing after 
     the date of the filing of the petition on unsecured claims 
     that are nondischargeable under section 1328(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims; 
     and'';
       (10) in section 1325(a), as amended by section 102, by 
     inserting after paragraph (7) the following:
       ``(8) the debtor has paid all amounts that are required to 
     be paid under a domestic support obligation and that first 
     become payable after the date of the filing of the petition 
     if the debtor is required by a judicial or administrative 
     order, or by statute, to pay such domestic support 
     obligation; and'';
       (11) in section 1328(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order, or by 
     statute, to pay a domestic support obligation, after such 
     debtor certifies that all amounts payable under such order or 
     such statute that are due on or before the date of the 
     certification (including amounts due before the petition was 
     filed, but only to the extent provided for by the plan) have 
     been paid'' after ``completion by the debtor of all payments 
     under the plan''.

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

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

[[Page 1206]]

       (B) in paragraph (9), by striking the period and inserting 
     a semicolon; and
       (C) by adding at the end the following:
       ``(10) if with respect to the debtor there is a claim for a 
     domestic support obligation, provide the applicable notice 
     specified in subsection (c); and''; and
       (2) by adding at the end the following:
       ``(c)(1) In a case described in subsection (a)(10) to which 
     subsection (a)(10) applies, the trustee shall--
       ``(A)(i) provide written notice to the holder of the claim 
     described in subsection (a)(10) of such claim and of the 
     right of such holder to use the services of the State child 
     support enforcement agency established under sections 464 and 
     466 of the Social Security Act for the State in which such 
     holder resides, for assistance in collecting child support 
     during and after the case under this title;
       ``(ii) include in the notice provided under clause (i) the 
     address and telephone number of such State child support 
     enforcement agency; and
       ``(iii) include in the notice provided under clause (i) an 
     explanation of the rights of such holder to payment of such 
     claim under this chapter;
       ``(B)(i) provide written notice to such State child support 
     enforcement agency of such claim; and
       ``(ii) include in the notice provided under clause (i) the 
     name, address, and telephone number of such holder; and
       ``(C) at such time as the debtor is granted a discharge 
     under section 727, provide written notice to such holder and 
     to such State child support enforcement agency of--
       ``(i) the granting of the discharge;
       ``(ii) the last recent known address of the debtor;
       ``(iii) the last recent known name and address of the 
     debtor's employer; and
       ``(iv) the name of each creditor that holds a claim that--
       ``(I) is not discharged under paragraph (2), (4), or (14A) 
     of section 523(a); or
       ``(II) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) The holder of a claim described in subsection 
     (a)(10) or the State child support enforcement agency of the 
     State in which such holder resides may request from a 
     creditor described in paragraph (1)(C)(iv) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable by reason of making such 
     disclosure.''.
       (b) Duties of Trustee Under Chapter 11.--Section 1106 of 
     title 11, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (6), by striking ``and'' at the end;
       (B) in paragraph (7), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(8) if with respect to the debtor there is a claim for a 
     domestic support obligation, provide the applicable notice 
     specified in subsection (c).''; and
       (2) by adding at the end the following:
       ``(c)(1) In a case described in subsection (a)(8) to which 
     subsection (a)(8) applies, the trustee shall--
       ``(A)(i) provide written notice to the holder of the claim 
     described in subsection (a)(8) of such claim and of the right 
     of such holder to use the services of the State child support 
     enforcement agency established under sections 464 and 466 of 
     the Social Security Act for the State in which such holder 
     resides, for assistance in collecting child support during 
     and after the case under this title; and
       ``(ii) include in the notice required by clause (i) the 
     address and telephone number of such State child support 
     enforcement agency;
       ``(B)(i) provide written notice to such State child support 
     enforcement agency of such claim; and
       ``(ii) include in the notice required by clause (i) the 
     name, address, and telephone number of such holder; and
       ``(C) at such time as the debtor is granted a discharge 
     under section 1141, provide written notice to such holder and 
     to such State child support enforcement agency of--
       ``(i) the granting of the discharge;
       ``(ii) the last recent known address of the debtor;
       ``(iii) the last recent known name and address of the 
     debtor's employer; and
       ``(iv) the name of each creditor that holds a claim that--
       ``(I) is not discharged under paragraph (2), (4), or (14A) 
     of section 523(a); or
       ``(II) was reaffirmed by the debtor under section 524(c).
       ``(2)(A) The holder of a claim described in subsection 
     (a)(8) or the State child enforcement support agency of the 
     State in which such holder resides may request from a 
     creditor described in paragraph (1)(C)(iv) the last known 
     address of the debtor.
       ``(B) Notwithstanding any other provision of law, a 
     creditor that makes a disclosure of a last known address of a 
     debtor in connection with a request made under subparagraph 
     (A) shall not be liable by reason of making such 
     disclosure.''.
       (c) Duties of Trustee Under Chapter 12.--Section 1202 of 
     title 11, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(6) if with respect to the debtor there is a claim for a 
     domestic support obligation, provide the applicable notice 
     specified in subsection (c).''; and
       (2) by adding at the end the following:
       ``(c)(1) In a case described in subsection (b)(6) to which 
     subsection (b)(6) applies, the trustee shall--
       ``(A)(i) provide written notice to the holder of the claim 
     described in subsection (b)(6) of such claim and of the right 
     of such holder to use the services of the State child support 
     enforcement agency established under sections 464 and 466 of 
     the Social Security Act for the State in which such holder 
     resides, for assistance in collecting child support during 
     and after the case under this title; and
       ``(ii) include in the notice provided under clause (i) the 
     address and telephone number of such State child support 
     enforcement agency;
       ``(B)(i) provide written notice to such State child support 
     enforcement agency of such claim; and
       ``(ii) include in the notice provided under clause (i) the 
     name, address, and telephone number of such holder; and
       ``(C) at such time as the debtor is granted a discharge 
     under section 1228, provide written notice to such holder and 
     to such State child support enforcement agency of--
       ``(i) the granting of the discharge;
       ``(ii) the last recent known address of the debtor;
       ``(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.''.

[[Page 1207]]



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

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

     SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY 
                   FILINGS.

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

[[Page 1208]]

     the United States Trustee System Fund referred to in section 
     586(e)(2) of title 28. Amounts deposited under this 
     subparagraph shall be available to fund the enforcement of 
     this section on a national basis.
       ``(B) Fines imposed under this subsection in judicial 
     districts served by bankruptcy administrators shall be 
     deposited as offsetting receipts to the fund established 
     under section 1931 of title 28, and shall remain available 
     until expended to reimburse any appropriation for the amount 
     paid out of such appropriation for expenses of the operation 
     and maintenance of the courts of the United States.''.

     SEC. 222. SENSE OF CONGRESS.

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

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

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

     SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

       (a) In General.--Section 522 of title 11, United States 
     Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and'';
       (iii) by adding at the end the following:
       ``(C) retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''; and
       (iv) by striking ``(2)(A) any property'' and inserting:
       ``(3) Property listed in this paragraph is--
       ``(A) any property'';
       (B) by striking paragraph (1) and inserting:
       ``(2) Property listed in this paragraph is property that is 
     specified under subsection (d), unless the State law that is 
     applicable to the debtor under paragraph (3)(A) specifically 
     does not so authorize.'';
       (C) by striking ``(b) Notwithstanding'' and inserting 
     ``(b)(1) Notwithstanding'';
       (D) by striking ``paragraph (2)'' each place it appears and 
     inserting ``paragraph (3)'';
       (E) by striking ``paragraph (1)'' each place it appears and 
     inserting ``paragraph (2)'';
       (F) by striking ``Such property is--''; and
       (G) by adding at the end the following:
       ``(4) For purposes of paragraph (3)(C) and subsection 
     (d)(12), the following shall apply:
       ``(A) If the retirement funds are in a retirement fund that 
     has received a favorable determination under section 7805 of 
     the Internal Revenue Code of 1986, and that determination is 
     in effect as of the date of the filing of the petition in a 
     case under this title, those funds shall be presumed to be 
     exempt from the estate.
       ``(B) If the retirement funds are in a retirement fund that 
     has not received a favorable determination under such section 
     7805, those funds are exempt from the estate if the debtor 
     demonstrates that--
       ``(i) no prior determination to the contrary has been made 
     by a court or the Internal Revenue Service; and
       ``(ii)(I) the retirement fund is in substantial compliance 
     with the applicable requirements of the Internal Revenue Code 
     of 1986; or
       ``(II) the retirement fund fails to be in substantial 
     compliance with the applicable requirements of the Internal 
     Revenue Code of 1986 and the debtor is not materially 
     responsible for that failure.
       ``(C) A direct transfer of retirement funds from 1 fund or 
     account that is exempt from taxation under section 401, 403, 
     408, 408A, 414, 457, or 501(a) of the Internal Revenue Code 
     of 1986, under section 401(a)(31) of the Internal Revenue 
     Code of 1986, or otherwise, shall not cease to qualify for 
     exemption under paragraph (3)(C) or subsection (d)(12) by 
     reason of such direct transfer.
       ``(D)(i) Any distribution that qualifies as an eligible 
     rollover distribution within the meaning of section 402(c) of 
     the Internal Revenue Code of 1986 or that is described in 
     clause (ii) shall not cease to qualify for exemption under 
     paragraph (3)(C) or subsection (d)(12) by reason of such 
     distribution.
       ``(ii) A distribution described in this clause is an amount 
     that--
       ``(I) has been distributed from a fund or account that is 
     exempt from taxation under section 401, 403, 408, 408A, 414, 
     457, or 501(a) of the Internal Revenue Code of 1986; and
       ``(II) to the extent allowed by law, is deposited in such a 
     fund or account not later than 60 days after the distribution 
     of such amount.''; and
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``subsection (b)(1)'' and inserting ``subsection (b)(2)''; 
     and
       (B) by adding at the end the following:
       ``(12) Retirement funds to the extent that those funds are 
     in a fund or account that is exempt from taxation under 
     section 401, 403, 408, 408A, 414, 457, or 501(a) of the 
     Internal Revenue Code of 1986.''.
       (b) Automatic Stay.--Section 362(b) of title 11, United 
     States Code, is amended--
       (1) in paragraph (17), by striking ``or'' at the end;
       (2) in paragraph (18), by striking the period and inserting 
     a semicolon; and
       (3) by inserting after paragraph (18) the following:
       ``(19) under subsection (a), of withholding of income from 
     a debtor's wages and collection of amounts withheld, under 
     the debtor's agreement authorizing that withholding and 
     collection for the benefit of a pension, profit-sharing, 
     stock bonus, or other plan established under section 401, 
     403, 408, 408A, 414, 457, or 501(c) of the Internal Revenue 
     Code of 1986, that is sponsored by the employer of the 
     debtor, or an affiliate, successor, or predecessor of such 
     employer--
       ``(A) to the extent that the amounts withheld and collected 
     are used solely for payments relating to a loan from a plan 
     under section 408(b)(1) of the Employee Retirement Income 
     Security Act of 1974 or is subject to section 72(p) of the 
     Internal Revenue Code of 1986; or
       ``(B) a loan from a thrift savings plan permitted under 
     subchapter III of chapter 84 of title 5, that satisfies the 
     requirements of section 8433(g) of such title;
     but nothing in this paragraph may be construed to provide 
     that any loan made under a governmental plan under section 
     414(d), or a contract or account under section 403(b), of the 
     Internal Revenue Code of 1986 constitutes a claim or a debt 
     under this title;''.
       (c) Exceptions To Discharge.--Section 523(a) of title 11, 
     United States Code, as amended by section 215, is amended by 
     inserting after paragraph (17) the following:
       ``(18) owed to a pension, profit-sharing, stock bonus, or 
     other plan established under section 401, 403, 408, 408A, 
     414, 457, or 501(c) of the Internal Revenue Code of 1986, 
     under--
       ``(A) a loan permitted under section 408(b)(1) of the 
     Employee Retirement Income Security Act of 1974, or subject 
     to section 72(p) of the Internal Revenue Code of 1986; or
       ``(B) a loan from a thrift savings plan permitted under 
     subchapter III of chapter 84 of title 5, that satisfies the 
     requirements of section 8433(g) of such title;
     but nothing in this paragraph may be construed to provide 
     that any loan made under a governmental plan under section 
     414(d), or a contract or account under section 403(b), of 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;

[[Page 1209]]

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

     SEC. 226. DEFINITIONS.

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

     SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

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

     ``Sec. 526. Restrictions on debt relief agencies

       ``(a) A debt relief agency shall not--
       ``(1) fail to perform any service that such agency informed 
     an assisted person or prospective assisted person it would 
     provide in connection with a case or proceeding under this 
     title;
       ``(2) make any statement, or counsel or advise any assisted 
     person or prospective assisted person to make a statement in 
     a document filed in a case or proceeding under this title, 
     that is untrue and misleading, or that upon the exercise of 
     reasonable care, should have been known by such agency to be 
     untrue or misleading;
       ``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission, with respect to--
       ``(A) the services that such agency will provide to such 
     person; or
       ``(B) the benefits and risks that may result if such person 
     becomes a debtor in a case under this title; or
       ``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of such person 
     filing a case under this title or to pay an attorney or 
     bankruptcy petition preparer fee or charge for services 
     performed as part of preparing for or representing a debtor 
     in a case under this title.
       ``(b) Any waiver by any assisted person of any protection 
     or right provided under this section shall not be enforceable 
     against the debtor by any Federal or State court or any other 
     person, but may be enforced against a debt relief agency.
       ``(c)(1) Any contract for bankruptcy assistance between a 
     debt relief agency and an assisted person that does not 
     comply with the material requirements of this section, 
     section 527, or section 528 shall be void and may not be 
     enforced by any Federal or State court or by any other 
     person, other than such assisted person.
       ``(2) Any debt relief agency shall be liable to an assisted 
     person in the amount of any fees or charges in connection 
     with providing bankruptcy assistance to such person that such 
     debt relief agency has received, for actual damages, and for 
     reasonable attorneys' fees and costs if such agency is found, 
     after notice and a hearing, to have--
       ``(A) intentionally or negligently failed to comply with 
     any provision of this section, section 527, or section 528 
     with respect to a case or proceeding under this title for 
     such assisted person;
       ``(B) provided bankruptcy assistance to an assisted person 
     in a case or proceeding under this title that is dismissed or 
     converted to a case under another chapter of this title 
     because of such agency's intentional or negligent failure to 
     file any required document including those specified in 
     section 521; or
       ``(C) intentionally or negligently disregarded the material 
     requirements of this title or the Federal Rules of Bankruptcy 
     Procedure applicable to such agency.
       ``(3) In addition to such other remedies as are provided 
     under State law, whenever the 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

[[Page 1210]]

     by section 227, is amended by adding at the end the 
     following:

     ``Sec. 527. Disclosures

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

``527. Disclosures.''.

     SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.

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

     ``Sec. 528. Requirements for debt relief agencies

       ``(a) A debt relief agency shall--
       ``(1) not later than 5 business days after the first date 
     on which such agency provides any bankruptcy assistance 
     services to an assisted person, but prior to such assisted 
     person's petition under this title being filed, execute a 
     written contract with such assisted person that explains 
     clearly and conspicuously--
       ``(A) the services such agency will provide to such 
     assisted person; and
       ``(B) the fees or charges for such services, and the terms 
     of payment;
       ``(2) provide the assisted person with a copy of the fully 
     executed and completed contract;
       ``(3) clearly and conspicuously disclose in any 
     advertisement of bankruptcy assistance services or of the 
     benefits of bankruptcy directed to the general public 
     (whether in general media, seminars or specific mailings, 
     telephonic or electronic messages, or otherwise) that the 
     services or benefits are with respect to bankruptcy relief 
     under this title; and
       ``(4) clearly and conspicuously use the following statement 
     in such advertisement: `We are a debt relief agency. We help 
     people file for bankruptcy relief under the Bankruptcy Code.' 
     or a substantially similar statement.
       ``(b)(1) An advertisement of bankruptcy assistance services 
     or of the benefits of bankruptcy directed to the general 
     public includes--
       ``(A) descriptions of bankruptcy assistance in connection 
     with a chapter 13 plan whether or not chapter 13 is 
     specifically mentioned in such advertisement; and
       ``(B) statements such as `federally supervised repayment 
     plan' or `Federal debt restructuring help' or other similar 
     statements 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

[[Page 1211]]

     of the House of Representatives a report containing the 
     results of the study required by subsection (a).

     SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.

       (a) Limitation.--Section 363(b)(1) of title 11, United 
     States Code, is amended by striking the period at the end and 
     inserting the following:

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

     SEC. 232. CONSUMER PRIVACY OMBUDSMAN.

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

     ``Sec. 332. Consumer privacy ombudsman

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

``332. Consumer privacy ombudsman.''.

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

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

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

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

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

       (c) Conforming Amendment.--Section 107(a) of title 11, 
     United States Code, is amended by inserting ``and subject to 
     section 112'' after ``section''.
                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

     SEC. 301. TECHNICAL AMENDMENTS.

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

     SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.

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

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

       ``(aa) file or amend the petition or other documents as 
     required by this title or the 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

[[Page 1212]]

     the court may order the stay to take effect in the case as to 
     any or all creditors (subject to such conditions or 
     limitations as the court may impose), after notice and a 
     hearing, only if the party in interest demonstrates that the 
     filing of the later case is in good faith as to the creditors 
     to be stayed;
       ``(C) a stay imposed under subparagraph (B) shall be 
     effective on the date of the entry of the order allowing the 
     stay to go into effect; and
       ``(D) for purposes of subparagraph (B), a case is 
     presumptively filed not in good faith (but such presumption 
     may be rebutted by clear and convincing evidence to the 
     contrary)--
       ``(i) as to all creditors if--
       ``(I) 2 or more previous cases under this title in which 
     the individual was a debtor were pending within the 1-year 
     period;
       ``(II) a previous case under this title in which the 
     individual was a debtor was dismissed within the time period 
     stated in this paragraph after the debtor failed to file or 
     amend the petition or other documents as required by this 
     title or the court without substantial excuse (but mere 
     inadvertence or negligence shall not be substantial excuse 
     unless the dismissal was caused by the negligence of the 
     debtor's attorney), failed to provide adequate protection as 
     ordered by the court, or failed to perform the terms of a 
     plan confirmed by the court; or
       ``(III) there has not been a substantial change in the 
     financial or personal affairs of the debtor since the 
     dismissal of the next most previous case under this title, or 
     any other reason to conclude that the later case will not be 
     concluded, if a case under chapter 7, with a discharge, and 
     if a case under chapter 11 or 13, with a confirmed plan that 
     will be fully performed; or
       ``(ii) as to any creditor that commenced an action under 
     subsection (d) in a previous case in which the individual was 
     a debtor if, as of the date of dismissal of such case, such 
     action was still pending or had been resolved by terminating, 
     conditioning, or limiting the stay as to such action of such 
     creditor.''.

     SEC. 303. CURBING ABUSIVE FILINGS.

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

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

     SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

       Title 11, United States Code, is amended--
       (1) in section 521(a), as so designated by section 106--
       (A) in paragraph (4), by striking ``, and'' at the end and 
     inserting a semicolon;
       (B) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(6) in a case under chapter 7 of this title in which the 
     debtor is an individual, not retain possession of personal 
     property as to which a creditor has an allowed claim for the 
     purchase price secured in whole or in part by an interest in 
     such personal property unless the debtor, not later than 45 
     days after the first meeting of creditors under section 
     341(a), either--
       ``(A) enters into an agreement with the creditor pursuant 
     to section 524(c) with respect to the claim secured by such 
     property; or
       ``(B) redeems such property from the security interest 
     pursuant to section 722.

     If the debtor fails to so act within the 45-day period 
     referred to in paragraph (6), the stay under section 362(a) 
     is terminated with respect to the personal property of the 
     estate or of the debtor which is affected, such property 
     shall no longer be property of the estate, and the creditor 
     may take whatever action as to such property as is permitted 
     by applicable nonbankruptcy law, unless the court determines 
     on the motion of the trustee filed before the expiration of 
     such 45-day period, and after notice and a hearing, that such 
     property is of consequential value or benefit to the estate, 
     orders appropriate adequate protection of the creditor's 
     interest, and orders the debtor to deliver any collateral in 
     the debtor's possession to the trustee.''; and
       (2) in section 722, by inserting ``in full at the time of 
     redemption'' before the period at the end.

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

       Title 11, United States Code, is amended--
       (1) in section 362, as amended by section 106--
       (A) in subsection (c), by striking ``(e), and (f)'' and 
     inserting ``(e), (f), and (h)'';
       (B) by redesignating subsection (h) as subsection (k) and 
     transferring such subsection so as to insert it after 
     subsection (j) as added by section 106; and
       (C) by inserting after subsection (g) the following:
       ``(h)(1) In a case in which the debtor is an individual, 
     the stay provided by subsection (a) is terminated with 
     respect to personal property of the estate or of the debtor 
     securing in whole or in part a claim, or subject to an 
     unexpired lease, and such personal property shall no longer 
     be property of the estate if the debtor fails within the 
     applicable time set by section 521(a)(2)--
       ``(A) to file timely any statement of intention required 
     under section 521(a)(2) with respect to such personal 
     property or to indicate in such statement that the debtor 
     will either surrender such personal property or retain it 
     and, if retaining such personal property, either redeem such 
     personal property pursuant to section 722, enter into an 
     agreement of the kind specified in section 524(c) applicable 
     to the debt secured by such personal property, or assume such 
     unexpired lease pursuant to section 365(p) if the trustee 
     does not do so, as applicable; and
       ``(B) to take timely the action specified in such 
     statement, as it may be amended before expiration of the 
     period for taking action, unless such statement specifies the 
     debtor's intention to reaffirm such debt on the original 
     contract terms and the creditor refuses to agree to the 
     reaffirmation on such terms.
       ``(2) Paragraph (1) does not apply if the court determines, 
     on the motion of the trustee filed before the expiration of 
     the applicable time set by section 521(a)(2), after notice 
     and a hearing, that such personal property is of 
     consequential value or benefit to the estate, and orders 
     appropriate adequate protection of the creditor's interest, 
     and orders the debtor to deliver any collateral in the 
     debtor's possession to the trustee. If the court does not so 
     determine, the stay provided by subsection (a) shall 
     terminate upon the conclusion of the hearing on the 
     motion.''; and
       (2) in section 521, as amended by sections 106 and 225--
       (A) in subsection (a)(2) by striking ``consumer'';
       (B) in subsection (a)(2)(B)--
       (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.''.

[[Page 1213]]



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

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

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

       ``(II) if the case under this chapter is dismissed or 
     converted without completion of the plan, such lien shall 
     also be retained by such holder to the extent recognized by 
     applicable nonbankruptcy law; and''.
       (b) Restoring the Foundation for Secured Credit.--Section 
     1325(a) of title 11, United States Code, is amended by adding 
     at the end the following:

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

     SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

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

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

     SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.

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

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

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

       (a) Stopping Abusive Conversions From Chapter 13.--Section 
     348(f)(1) of title 11, United States Code, is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B)--
       (A) by striking ``in the converted case, with allowed 
     secured claims'' and inserting ``only in a case converted to 
     a case under chapter 11 or 12, but not in a case converted to 
     a case under chapter 7, with allowed secured claims in cases 
     under chapters 11 and 12''; and
       (B) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(C) with respect to cases converted from chapter 13--
       ``(i) the claim of any creditor holding security as of the 
     date of the petition shall continue to be secured by that 
     security unless the full amount of such claim determined 
     under applicable nonbankruptcy law has been paid in full as 
     of the date of conversion, notwithstanding any valuation or 
     determination of the amount of an allowed secured claim made 
     for the purposes of the case under chapter 13; and
       ``(ii) unless a prebankruptcy default has been fully cured 
     under the plan at the time of conversion, in any proceeding 
     under this title or otherwise, the default shall have the 
     effect given under applicable nonbankruptcy law.''.
       (b) Giving Debtors the Ability To Keep Leased Personal 
     Property by Assumption.--Section 365 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(p)(1) If a lease of personal property is rejected or not 
     timely assumed by the trustee under subsection (d), the 
     leased property is no longer property of the estate and the 
     stay under section 362(a) is automatically terminated.
       ``(2)(A) If the debtor in a case under chapter 7 is an 
     individual, the debtor may notify the creditor in writing 
     that the debtor desires to assume the lease. Upon being so 
     notified, the creditor may, at its option, notify the debtor 
     that it is willing to have the lease assumed by the debtor 
     and may condition such assumption on cure of any outstanding 
     default on terms set by the contract.
       ``(B) If, not later than 30 days after notice is provided 
     under subparagraph (A), the debtor notifies the lessor in 
     writing that the lease is assumed, the liability under the 
     lease will be assumed by the debtor and not by the estate.
       ``(C) The stay under section 362 and the injunction under 
     section 524(a)(2) shall not be violated by notification of 
     the debtor and negotiation of cure under this subsection.
       ``(3) In a case under chapter 11 in which the debtor is an 
     individual and in a case under chapter 13, if the debtor is 
     the lessee with respect to personal property and the lease is 
     not assumed in the plan confirmed by the court, the lease is 
     deemed rejected as of the conclusion of the hearing on 
     confirmation. If the lease is rejected, the stay under 
     section 362 and any stay under section 1301 is automatically 
     terminated with respect to the property subject to the 
     lease.''.
       (c) Adequate Protection of Lessors and Purchase Money 
     Secured Creditors.--
       (1) Confirmation of plan.--Section 1325(a)(5)(B) of title 
     11, United States Code, as amended by section 306, is 
     amended--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii), by striking ``or'' at the end and 
     inserting ``and''; and
       (C) by adding at the end the following:
       ``(iii) if--
       ``(I) property to be distributed pursuant to this 
     subsection is in the form of periodic payments, such payments 
     shall be in equal monthly amounts; and
       ``(II) the holder of the claim is secured by personal 
     property, the amount of such payments shall not be less than 
     an amount sufficient to provide to the holder of such claim 
     adequate protection during the period of the plan; or''.
       (2) Payments.--Section 1326(a) of title 11, United States 
     Code, is amended to read as follows:
       ``(a)(1) Unless the court orders otherwise, the debtor 
     shall commence making payments not later than 30 days after 
     the date of the filing of the plan or the order for relief, 
     whichever is earlier, in the amount--
       ``(A) proposed by the plan to the trustee;
       ``(B) scheduled in a lease of personal property directly to 
     the lessor for that portion of the obligation that becomes 
     due after the order for relief, reducing the payments under 
     subparagraph (A) by the amount so paid and providing the 
     trustee with evidence of such payment, including the amount 
     and date of payment; and
       ``(C) that provides adequate protection directly to a 
     creditor holding an allowed claim secured by personal 
     property to the extent the claim is attributable to the 
     purchase of such property by the debtor for that portion 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,

[[Page 1214]]

     or reduce the payments required under this subsection pending 
     confirmation of a plan.
       ``(4) Not later than 60 days after the date of filing of a 
     case under this chapter, a debtor retaining possession of 
     personal property subject to a lease or securing a claim 
     attributable in whole or in part to the purchase price of 
     such property shall provide the lessor or secured creditor 
     reasonable evidence of the maintenance of any required 
     insurance coverage with respect to the use or ownership of 
     such property and continue to do so for so long as the debtor 
     retains possession of such property.''.

     SEC. 310. LIMITATION ON LUXURY GOODS.

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

     SEC. 311. AUTOMATIC STAY.

       (a) In general.--Section 362(b) of title 11, United States 
     Code, as amended by sections 224 and 303, is amended by 
     inserting after paragraph (21), the following:
       ``(22) subject to subsection (l), under subsection (a)(3), 
     of the continuation of any eviction, unlawful detainer 
     action, or similar proceeding by a lessor against a debtor 
     involving residential property in which the debtor resides as 
     a tenant under a lease or rental agreement and with respect 
     to which the lessor has obtained before the date of the 
     filing of the bankruptcy petition, a judgment for possession 
     of such property against the debtor;
       ``(23) subject to subsection (m), under subsection (a)(3), 
     of an eviction action that seeks possession of the 
     residential property in which the debtor resides as a tenant 
     under a lease or rental agreement based on endangerment of 
     such property or the illegal use of controlled substances on 
     such property, but only if the lessor files with the court, 
     and serves upon the debtor, a certification under penalty of 
     perjury that such an eviction action has been filed, or that 
     the debtor, during the 30-day period preceding the date of 
     the filing of the certification, has endangered property or 
     illegally used or allowed to be used a controlled substance 
     on the property;
       ``(24) under subsection (a), of any transfer that is not 
     avoidable under section 544 and that is not avoidable under 
     section 549;''.
       (b) Limitations.--Section 362 of title 11, United States 
     Code, as amended by sections 106 and 305, is amended by 
     adding at the end the following:
       ``(l)(1) Except as otherwise provided in this subsection, 
     subsection (b)(22) shall apply on the date that is 30 days 
     after the date on which the bankruptcy petition is filed, if 
     the debtor files with the petition and serves upon the lessor 
     a certification under penalty of perjury that--
       ``(A) under nonbankruptcy law applicable in the 
     jurisdiction, there are circumstances under which the debtor 
     would be permitted to cure the entire monetary default that 
     gave rise to the judgment for possession, after that judgment 
     for possession was entered; and
       ``(B) the debtor (or an adult dependent of the debtor) has 
     deposited with the clerk of the court, any rent that would 
     become due during the 30-day period after the filing of the 
     bankruptcy petition.
       ``(2) If, within the 30-day period after the filing of the 
     bankruptcy petition, the debtor (or an adult dependent of the 
     debtor) complies with paragraph (1) and files with the court 
     and serves upon the lessor a further certification under 
     penalty of perjury that the debtor (or an adult dependent of 
     the debtor) has cured, under nonbankrupcty law applicable in 
     the jurisdiction, the entire monetary default that gave rise 
     to the judgment under which possession is sought by the 
     lessor, subsection (b)(22) shall not apply, unless ordered to 
     apply by the court under paragraph (3).
       ``(3)(A) If the lessor files an objection to any 
     certification filed by the debtor under paragraph (1) or (2), 
     and serves such objection upon the debtor, the court shall 
     hold a hearing within 10 days after the filing and service of 
     such objection to determine if the certification filed by the 
     debtor under paragraph (1) or (2) is true.
       ``(B) If the court upholds the objection of the lessor 
     filed under subparagraph (A)--
       ``(i) subsection (b)(22) shall apply immediately and relief 
     from the stay provided under subsection (a)(3) shall not be 
     required to enable the lessor to complete the process to 
     recover full possession of the property; and
       ``(ii) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the court's 
     order upholding the lessor's objection.
       ``(4) If a debtor, in accordance with paragraph (5), 
     indicates on the petition that there was a judgment for 
     possession of the residential rental property in which the 
     debtor resides and does not file a certification under 
     paragraph (1) or (2)--
       ``(A) subsection (b)(22) shall apply immediately upon 
     failure to file such certification, and relief from the stay 
     provided under subsection (a)(3) shall not be required to 
     enable the lessor to complete the process to recover full 
     possession of the property; and
       ``(B) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the docket 
     indicating the absence of a filed certification and the 
     applicability of the exception to the stay under subsection 
     (b)(22).
       ``(5)(A) Where a judgment for possession of residential 
     property in which the debtor resides as a tenant under a 
     lease or rental agreement has been obtained by the lessor, 
     the debtor shall so indicate on the bankruptcy petition and 
     shall provide the name and address of the lessor that 
     obtained that pre-petition judgment on the petition and on 
     any certification filed under this subsection.
       ``(B) The form of certification filed with the petition, as 
     specified in this subsection, shall provide for the debtor to 
     certify, and the debtor shall certify--
       ``(i) whether a judgment for possession of residential 
     rental housing in which the debtor resides has been obtained 
     against the debtor before the date of the filing of the 
     petition; and
       ``(ii) whether the debtor is claiming under paragraph (1) 
     that under nonbankruptcy law applicable in the jurisdiction, 
     there are circumstances under which the debtor would be 
     permitted to cure the entire monetary default that gave rise 
     to the judgment for possession, after that judgment of 
     possession was entered, and has made the appropriate deposit 
     with the court.
       ``(C) The standard forms (electronic and otherwise) used in 
     a bankruptcy proceeding shall be amended to reflect the 
     requirements of this subsection.
       ``(D) The clerk of the court shall arrange for the prompt 
     transmittal of the rent deposited in accordance with 
     paragraph (1)(B) to the lessor.
       ``(m)(1) Except as otherwise provided in this subsection, 
     subsection (b)(23) shall apply on the date that is 15 days 
     after the date on which the lessor files and serves a 
     certification described in subsection (b)(23).
       ``(2)(A) If the debtor files with the court an objection to 
     the truth or legal sufficiency of the certification described 
     in subsection (b)(23) and serves such objection upon the 
     lessor, subsection (b)(23) shall not apply, unless ordered to 
     apply by the court under this subsection.
       ``(B) If the debtor files and serves the objection under 
     subparagraph (A), the court shall hold a hearing within 10 
     days after the filing and service of such objection to 
     determine if the situation giving rise to the lessor's 
     certification under paragraph (1) existed or has been 
     remedied.
       ``(C) If the debtor can demonstrate to the satisfaction of 
     the court that the situation giving rise to the lessor's 
     certification under paragraph (1) did not exist or has been 
     remedied, the stay provided under subsection (a)(3) shall 
     remain in effect until the termination of the stay under this 
     section.
       ``(D) If the debtor cannot demonstrate to the satisfaction 
     of the court that the situation giving rise to the lessor's 
     certification under paragraph (1) did not exist or has been 
     remedied--
       ``(i) relief from the stay provided under subsection (a)(3) 
     shall not be required to enable the lessor to proceed with 
     the eviction; and
       ``(ii) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the court's 
     order upholding the lessor's certification.
       ``(3) If the debtor fails to file, within 15 days, an 
     objection under paragraph (2)(A)--
       ``(A) subsection (b)(23) shall apply immediately upon such 
     failure and relief from the stay provided under subsection 
     (a)(3) shall not be required to enable the lessor to complete 
     the process to recover full possession of the property; and
       ``(B) the clerk of the court shall immediately serve upon 
     the lessor and the debtor a certified copy of the docket 
     indicating such failure.''.

     SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

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

[[Page 1215]]



     SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

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

     SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.

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

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

       (a) Notice.--Section 342 of title 11, United States Code, 
     as amended by section 102, is amended--
       (1) in subsection (c)--
       (A) by inserting ``(1)'' after ``(c)'';
       (B) by striking ``, but the failure of such notice to 
     contain such information shall not invalidate the legal 
     effect of such notice''; and
       (C) by adding at the end the following:
       ``(2)(A) If, within the 90 days before the commencement of 
     a voluntary case, a creditor supplies the debtor in at least 
     2 communications sent to the debtor with the current account 
     number of the debtor and the address at which such creditor 
     requests to receive correspondence, then any notice required 
     by this title to be sent by the debtor to such creditor shall 
     be sent to such address and shall include such account 
     number.
       ``(B) If a creditor would be in violation of applicable 
     nonbankruptcy law by sending any such communication within 
     such 90-day period and if such creditor supplies the debtor 
     in the last 2 communications with the current account number 
     of the debtor and the address at which such creditor requests 
     to receive correspondence, then any notice required by this 
     title to be sent by the debtor to such creditor shall be sent 
     to such address and shall include such account number.''; and
       (2) by adding at the end the following:
       ``(e)(1) In a case under chapter 7 or 13 of this title of a 
     debtor who is an individual, a creditor at any time may both 
     file with the court and serve on the debtor a notice of 
     address to be used to provide notice in such case to such 
     creditor.
       ``(2) Any notice in such case required to be provided to 
     such creditor by the debtor or the court later than 5 days 
     after the court and the debtor receive such creditor's notice 
     of address, shall be provided to such address.
       ``(f)(1) An entity may file with any bankruptcy court a 
     notice of address to be used by all the bankruptcy courts or 
     by particular bankruptcy courts, as so specified by such 
     entity at the time such notice is filed, to provide notice to 
     such entity in all cases under chapters 7 and 13 pending in 
     the courts with respect to which such notice is filed, in 
     which such entity is a creditor.
       ``(2) In any case filed under chapter 7 or 13, any notice 
     required to be provided by a court with respect to which a 
     notice is filed under paragraph (1), to such entity later 
     than 30 days after the filing of such notice under paragraph 
     (1) shall be provided to such address unless with respect to 
     a particular case a different address is specified in a 
     notice filed and served in accordance with subsection (e).
       ``(3) A notice filed under paragraph (1) may be withdrawn 
     by such entity.
       ``(g)(1) Notice provided to a creditor by the debtor or the 
     court other than in accordance with this section (excluding 
     this subsection) shall not be effective notice until such 
     notice is brought to the attention of such creditor. If such 
     creditor designates a person or an organizational subdivision 
     of such creditor to be responsible for receiving notices 
     under this title and establishes reasonable procedures so 
     that such notices receivable by such creditor are to be 
     delivered to such person or such subdivision, then a notice 
     provided to such creditor other than in accordance with this 
     section (excluding this subsection) shall not be considered 
     to have been brought to the attention of such creditor until 
     such notice is received by such person or such subdivision.
       ``(2) A monetary penalty may not be imposed on a creditor 
     for a violation of a stay in effect under section 362(a) 
     (including a monetary penalty imposed under section 362(k)) 
     or for failure to comply with section 542 or 543 unless the 
     conduct that is the basis of such violation or of such 
     failure occurs after such creditor receives notice effective 
     under this section of the order for relief.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 106, 225, and 305, is 
     amended--
       (1) in subsection (a), as so designated by section 106, by 
     amending paragraph (1) to read as follows:
       ``(1) file--
       ``(A) a list of creditors; and
       ``(B) unless the court orders otherwise--
       ``(i) a schedule of assets and liabilities;
       ``(ii) a schedule of current income and current 
     expenditures;
       ``(iii) a statement of the debtor's financial affairs and, 
     if section 342(b) applies, a certificate--

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

       ``(iv) copies of all payment advices or other evidence of 
     payment received within 60 days before the date of the filing 
     of the petition, by the debtor from any employer of the 
     debtor;
       ``(v) a statement of the amount of monthly net income, 
     itemized to show how the amount is calculated; and
       ``(vi) a statement disclosing any reasonably anticipated 
     increase in income or expenditures over the 12-month period 
     following the date of the filing of the petition;''; and
       (2) by adding at the end the following:
       ``(e)(1) If the debtor in a case under chapter 7 or 13 is 
     an individual and if a creditor files with the court at any 
     time a request to receive a copy of the petition, schedules, 
     and statement of financial affairs filed by the debtor, then 
     the court shall make such petition, such schedules, and such 
     statement available to such creditor.
       ``(2)(A) The debtor shall provide--
       ``(i) not later than 7 days before the date first set for 
     the first meeting of creditors, to the trustee a copy of the 
     Federal income tax return required under applicable law (or 
     at the election of the debtor, a transcript of such return) 
     for the most recent tax year ending immediately before the 
     commencement of the case and for which a Federal income tax 
     return was filed; and
       ``(ii) at the same time the debtor complies with clause 
     (i), a copy of such return (or if elected under clause (i), 
     such transcript) to any creditor that timely requests such 
     copy.
       ``(B) If the debtor fails to comply with clause (i) or (ii) 
     of subparagraph (A), the

[[Page 1216]]

      court shall dismiss the case unless the debtor demonstrates 
     that the failure to so comply is due to circumstances beyond 
     the control of the debtor.
       ``(C) If a creditor requests a copy of such tax return or 
     such transcript and if the debtor fails to provide a copy of 
     such tax return or such transcript to such creditor at the 
     time the debtor provides such tax return or such transcript 
     to the trustee, then the court shall dismiss the case unless 
     the debtor demonstrates that the failure to provide a copy of 
     such tax return or such transcript is due to circumstances 
     beyond the control of the debtor.
       ``(3) If a creditor in a case under chapter 13 files with 
     the court at any time a request to receive a copy of the plan 
     filed by the debtor, then the court shall make available to 
     such creditor a copy of the plan--
       ``(A) at a reasonable cost; and
       ``(B) not later than 5 days after such request is filed.
       ``(f) At the request of the court, the United States 
     trustee, or any party in interest in a case under chapter 7, 
     11, or 13, a debtor who is an individual shall file with the 
     court--
       ``(1) at the same time filed with the taxing authority, a 
     copy of each Federal income tax return required under 
     applicable law (or at the election of the debtor, a 
     transcript of such tax return) with respect to each tax year 
     of the debtor ending while the case is pending under such 
     chapter;
       ``(2) at the same time filed with the taxing authority, 
     each Federal income tax return required under applicable law 
     (or at the election of the debtor, a transcript of such tax 
     return) that had not been filed with such authority as of the 
     date of the commencement of the case and that was 
     subsequently filed for any tax year of the debtor ending in 
     the 3-year period ending on the date of the commencement of 
     the case;
       ``(3) a copy of each amendment to any Federal income tax 
     return or transcript filed with the court under paragraph (1) 
     or (2); and
       ``(4) in a case under chapter 13--
       ``(A) on the date that is either 90 days after the end of 
     such tax year or 1 year after the date of the commencement of 
     the case, whichever is later, if a plan is not confirmed 
     before such later date; and
       ``(B) annually after the plan is confirmed and until the 
     case is closed, not later than the date that is 45 days 
     before the anniversary of the confirmation of the plan;
     a statement, under penalty of perjury, of the income and 
     expenditures of the debtor during the tax year of the debtor 
     most recently concluded before such statement is filed under 
     this paragraph, and of the monthly income of the debtor, that 
     shows how income, expenditures, and monthly income are 
     calculated.
       ``(g)(1) A statement referred to in subsection (f)(4) shall 
     disclose--
       ``(A) the amount and sources of the income of the debtor;
       ``(B) the identity of any person responsible with the 
     debtor for the support of any dependent of the debtor; and
       ``(C) the identity of any person who contributed, and the 
     amount contributed, to the household in which the debtor 
     resides.
       ``(2) The tax returns, amendments, and statement of income 
     and expenditures described in subsections (e)(2)(A) and (f) 
     shall be available to the United States trustee (or the 
     bankruptcy administrator, if any), the trustee, and any party 
     in interest for inspection and copying, subject to the 
     requirements of section 315(c) of the Bankruptcy Abuse 
     Prevention and Consumer Protection Act of 2005.
       ``(h) If requested by the United States trustee or by the 
     trustee, the debtor shall provide--
       ``(1) a document that establishes the identity of the 
     debtor, including a driver's license, passport, or other 
     document that contains a photograph of the debtor; or
       ``(2) such other personal identifying information relating 
     to the debtor that establishes the identity of the debtor.''.
       (c)(1) Not later than 180 days after the date of the 
     enactment of this Act, the Director of the Administrative 
     Office of the United States Courts shall establish procedures 
     for safeguarding the confidentiality of any tax information 
     required to be provided under this section.
       (2) The procedures under paragraph (1) shall include 
     restrictions on creditor access to tax information that is 
     required to be provided under this section.
       (3) Not later than 540 days after the date of enactment of 
     this Act, the Director of the Administrative Office of the 
     United States Courts shall prepare and submit to the 
     President pro tempore of the Senate and the Speaker of the 
     House of Representatives a report that--
       (A) assesses the effectiveness of the procedures 
     established under paragraph (1); and
       (B) if appropriate, includes proposed legislation to--
       (i) further protect the confidentiality of tax information; 
     and
       (ii) provide penalties for the improper use by any person 
     of the tax information required to be provided under this 
     section.

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

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

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

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

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

       Title 11, United States Code, is amended--
       (1) by amending section 1322(d) to read as follows:
       ``(d)(1) If the current monthly income of the debtor and 
     the debtor's spouse combined, when multiplied by 12, is not 
     less than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4,
     the plan may not provide for payments over a period that is 
     longer than 5 years.
       ``(2) If the current monthly income of the debtor and the 
     debtor's spouse combined, when multiplied by 12, is less 
     than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4,
     the plan may not provide for payments over a period that is 
     longer than 3 years, unless the court, for cause, approves a 
     longer period, but the court may not approve a period that is 
     longer than 5 years.'';
       (2) in section 1325(b)(1)(B), by striking ``three-year 
     period'' and inserting ``applicable commitment period''; and
       (3) in section 1325(b), as amended by section 102, by 
     adding at the end the following:
       ``(4) For purposes of this subsection, the `applicable 
     commitment period'--
       ``(A) subject to subparagraph (B), shall be--
       ``(i) 3 years; or
       ``(ii) not less than 5 years, if the current monthly income 
     of the debtor and the debtor's spouse combined, when 
     multiplied by 12, is not less than--
       ``(I) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(II) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(III) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4; and

[[Page 1217]]

       ``(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''.
       (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

[[Page 1218]]

       ``(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 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;''.

[[Page 1219]]



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

     SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

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

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

       Section 546 of title 11, United States Code, is amended--
       (1) by redesignating the second subsection (g) (as added by 
     section 222(a) of Public Law 103-394) as subsection (h);
       (2) in subsection (h), as so redesignated, by inserting 
     ``and subject to the prior rights of holders of security 
     interests in such goods or the proceeds of such goods'' after 
     ``consent of a creditor''; and
       (3) by adding at the end the following:
       ``(i)(1) Notwithstanding paragraphs (2) and (3) of section 
     545, the trustee may not avoid a warehouseman's lien for 
     storage, transportation, or other costs incidental to the 
     storage and handling of goods.
       ``(2) The prohibition under paragraph (1) shall be applied 
     in a manner consistent with any State statute applicable to 
     such lien that is similar to section 7-209 of the Uniform 
     Commercial Code, as in effect on the date of enactment of the 
     Bankruptcy Abuse Prevention and Consumer Protection Act of 
     2005, or any successor to such section 7-209.''.

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

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

[[Page 1220]]



     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 
     otherwise applicable nonbankruptcy law, or any other 
     requirement that representation at the meeting of creditors 
     under subsection (a) be by an attorney, a creditor holding a 
     consumer debt or any representative of the creditor (which 
     may include an entity or an employee of an entity and may be 
     a representative for more than 1 creditor) shall be permitted 
     to appear at and participate in the meeting of creditors in a 
     case under chapter 7 or 13, either alone or in conjunction 
     with an attorney for the creditor. Nothing in this subsection 
     shall be construed to require any creditor to be represented 
     by an attorney at any meeting of creditors.''.

     SEC. 414. DEFINITION OF DISINTERESTED PERSON.

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

     SEC. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.

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

     SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.

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

     SEC. 417. UTILITY SERVICE.

       Section 366 of title 11, United States Code, is amended--
       (1) in subsection (a), by striking ``subsection (b)'' and 
     inserting ``subsections (b) and (c)''; and
       (2) by adding at the end the following:
       ``(c)(1)(A) For purposes of this subsection, the term 
     `assurance of payment' means--
       ``(i) a cash deposit;
       ``(ii) a letter of credit;
       ``(iii) a certificate of deposit;
       ``(iv) a surety bond;
       ``(v) a prepayment of utility consumption; or
       ``(vi) another form of security that is mutually agreed on 
     between the utility and the debtor or the trustee.
       ``(B) For purposes of this subsection an administrative 
     expense priority shall not constitute an assurance of 
     payment.
       ``(2) Subject to paragraphs (3) and (4), with respect to a 
     case filed under chapter 11, a utility referred to in 
     subsection (a) may alter, refuse, or discontinue utility 
     service, if during the 30-day period beginning on the date of 
     the filing of the petition, the utility does not receive from 
     the debtor or the trustee adequate assurance of payment for 
     utility service that is satisfactory to the utility.
       ``(3)(A) On request of a party in interest and after notice 
     and a hearing, the court may order modification of the amount 
     of an assurance of payment under paragraph (2).
       ``(B) In making a determination under this paragraph 
     whether an assurance of payment is adequate, the court may 
     not consider--
       ``(i) the absence of security before the date of the filing 
     of the petition;
       ``(ii) the payment by the debtor of charges for utility 
     service in a timely manner before the date of the filing of 
     the petition; or
       ``(iii) the availability of an administrative expense 
     priority.
       ``(4) Notwithstanding any other provision of law, with 
     respect to a case subject to this subsection, a utility may 
     recover or set off against a security deposit provided to the 
     utility by the debtor before the date of the filing of the 
     petition without notice or order of the court.''.

     SEC. 418. BANKRUPTCY FEES.

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

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

       (a) In General.--
       (1) Disclosure.--The Judicial Conference of the United 
     States, in accordance with section 2075 of title 28 of the 
     United States Code and after consideration of the views of 
     the Director of the Executive Office for United States 
     Trustees, shall propose amended Federal Rules of Bankruptcy 
     Procedure and in accordance with rule 9009 of the Federal 
     Rules of Bankruptcy Procedure shall prescribe official 
     bankruptcy forms directing debtors under chapter 11 of title 
     11 of United States Code, to disclose the information 
     described in paragraph (2) by filing and serving periodic 
     financial and other reports designed to provide such 
     information.
       (2) Information.--The information referred to in paragraph 
     (1) is the value, operations, and profitability of any 
     closely held corporation, partnership, or of any other entity 
     in

[[Page 1221]]

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

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

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

     SEC. 436. DUTIES IN SMALL BUSINESS CASES.

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

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

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

[[Page 1222]]

     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
       ``(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;

[[Page 1223]]

       ``(N) material default by the debtor with respect to a 
     confirmed plan;
       ``(O) termination of a confirmed plan by reason of the 
     occurrence of a condition specified in the plan; and
       ``(P) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date of the 
     filing of the petition.''.
       (b) Additional Grounds for Appointment of Trustee.--Section 
     1104(a) of title 11, United States Code, is amended--
       (1) in paragraph (1), by striking ``or'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(3) if grounds exist to convert or dismiss the case under 
     section 1112, but the court determines that the appointment 
     of a trustee or an examiner is in the best interests of 
     creditors and the estate.''.

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

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

     SEC. 444. PAYMENT OF INTEREST.

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

     SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES.

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

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

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

     SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EMPLOYEES.

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

     SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

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

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

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

                       TITLE VI--BANKRUPTCY DATA

     SEC. 601. IMPROVED BANKRUPTCY STATISTICS.

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

     ``Sec. 159. Bankruptcy statistics

       ``(a) The clerk of the district court, or the clerk of the 
     bankruptcy court if one is certified pursuant to section 
     156(b) of this title, shall collect statistics regarding 
     debtors who are individuals with primarily consumer debts 
     seeking relief under chapters 7, 11, and 13 of title 11. 
     Those statistics shall be in a standardized format prescribed 
     by the Director of the Administrative Office of the United 
     States Courts (referred to in this section as the 
     `Director').
       ``(b) The Director shall--
       ``(1) compile the statistics referred to in subsection (a);
       ``(2) make the statistics available to the public; and
       ``(3) not later than July 1, 2008, and annually thereafter, 
     prepare, and submit to Congress a report concerning the 
     information collected under subsection (a) that contains an 
     analysis of the information.
       ``(c) The compilation required under subsection (b) shall--
       ``(1) be itemized, by chapter, with respect to title 11;
       ``(2) be presented in the aggregate and for each district; 
     and
       ``(3) include information concerning--
       ``(A) the total assets and total liabilities of the debtors 
     described in subsection (a), and in each category of assets 
     and liabilities, as reported in the schedules prescribed 
     pursuant to section 2075 of this title and filed by debtors;
       ``(B) the current monthly income, average income, and 
     average expenses of debtors as reported on the schedules and 
     statements that each such debtor files under sections 521 and 
     1322 of title 11;
       ``(C) the aggregate amount of debt discharged in cases 
     filed during the reporting period, determined as the 
     difference between the total amount of debt and obligations 
     of a debtor reported on the schedules and the amount of such 
     debt reported in categories which are predominantly 
     nondischargeable;
       ``(D) the average period of time between the date of the 
     filing of the petition and the closing of the case for cases 
     closed during the reporting period;
       ``(E) for cases closed during the reporting period--
       ``(i) the number of cases in which a reaffirmation 
     agreement was filed; and
       ``(ii)(I) the total number of reaffirmation agreements 
     filed;
       ``(II) of those cases in which a reaffirmation agreement 
     was filed, the number of cases in which the debtor was not 
     represented by an attorney; and
       ``(III) of those cases in which a reaffirmation agreement 
     was filed, the number of cases in which the reaffirmation 
     agreement was approved by the court;
       ``(F) with respect to cases filed under chapter 13 of title 
     11, for the reporting period--
       ``(i)(I) the number of cases in which a final order was 
     entered determining the value of property securing a claim in 
     an amount less than the amount of the claim; and
       ``(II) the number of final orders entered determining the 
     value of property securing a claim;
       ``(ii) the number of cases dismissed, the number of cases 
     dismissed for failure to

[[Page 1224]]

     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.''.

     SEC. 603. AUDIT PROCEDURES.

       (a) In General.--
       (1) Establishment of procedures.--The Attorney General (in 
     judicial districts served by United States trustees) and the 
     Judicial Conference of the United States (in judicial 
     districts served by bankruptcy administrators) shall 
     establish procedures to determine the accuracy, veracity, and 
     completeness of petitions, schedules, and other information 
     that the debtor is required to provide under sections 521 and 
     1322 of title 11, United States Code, and, if applicable, 
     section 111 of such title, in cases filed under chapter 7 or 
     13 of such title in which the debtor is an individual. Such 
     audits shall be in accordance with generally accepted 
     auditing standards and performed by independent certified 
     public accountants or independent licensed public 
     accountants, provided that the Attorney General and the 
     Judicial Conference, as appropriate, may develop alternative 
     auditing standards not later than 2 years after the date of 
     enactment of this Act.
       (2) Procedures.--Those procedures required by paragraph (1) 
     shall--
       (A) establish a method of selecting appropriate qualified 
     persons to contract to perform those audits;
       (B) establish a method of randomly selecting cases to be 
     audited, except that not less than 1 out of every 250 cases 
     in each Federal judicial district shall be selected for 
     audit;
       (C) require audits of schedules of income and expenses that 
     reflect greater than average variances from the statistical 
     norm of the district in which the schedules were filed if 
     those variances occur by reason of higher income or higher 
     expenses than the statistical norm of the district in which 
     the schedules were filed; and
       (D) establish procedures for providing, not less frequently 
     than annually, public information concerning the aggregate 
     results of such audits including the percentage of cases, by 
     district, in which a material misstatement of income or 
     expenditures is reported.
       (b) Amendments.--Section 586 of title 28, United States 
     Code, is amended--
       (1) in subsection (a), by striking paragraph (6) and 
     inserting the following:
       ``(6) make such reports as the Attorney General directs, 
     including the results of audits performed under section 
     603(a) of the Bankruptcy Abuse Prevention and Consumer 
     Protection Act of 2005;''; and
       (2) by adding at the end the following:
       ``(f)(1) The United States trustee for each district is 
     authorized to contract with auditors to perform audits in 
     cases designated by the United States trustee, in accordance 
     with the procedures established under section 603(a) of the 
     Bankruptcy Abuse Prevention and Consumer Protection Act of 
     2005.
       ``(2)(A) The report of each audit referred to in paragraph 
     (1) shall be filed with the court and transmitted to the 
     United States trustee. Each report shall clearly and 
     conspicuously specify any material misstatement of income or 
     expenditures or of assets identified by the person performing 
     the audit. In any case in which a material misstatement of 
     income or expenditures or of assets has been reported, the 
     clerk of the district court (or the clerk of the bankruptcy 
     court if one is certified under section 156(b) of this title) 
     shall give notice of the misstatement to the creditors in the 
     case.
       ``(B) If a material misstatement of income or expenditures 
     or of assets is reported, the United States trustee shall--
       ``(i) report the material misstatement, if appropriate, to 
     the United States Attorney pursuant to section 3057 of title 
     18; and
       ``(ii) if advisable, take appropriate action, including but 
     not limited to commencing an adversary proceeding to revoke 
     the debtor's discharge pursuant to section 727(d) of title 
     11.''.
       (c) Amendments to Section 521 of Title 11, U.S.C.--Section 
     521(a) of title 11, United States Code, as so designated by 
     section 106, is amended in each of paragraphs (3) and (4) by 
     inserting ``or an auditor serving under section 586(f) of 
     title 28'' after ``serving in the case''.
       (d) Amendments to Section 727 of Title 11, U.S.C.--Section 
     727(d) of title 11, United States Code, is amended--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(4) the debtor has failed to explain satisfactorily--
       ``(A) a material misstatement in an audit referred to in 
     section 586(f) of title 28; or

[[Page 1225]]

       ``(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.''.

     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

[[Page 1226]]

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

     SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

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

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

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

     SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.

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

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

       Section 523(a) of title 11, United States Code, as amended 
     by sections 215 and 224, is amended--
       (1) in paragraph (1)(B)--
       (A) in the matter preceding clause (i), by inserting ``or 
     equivalent report or notice,'' after ``a return,'';
       (B) in clause (i), by inserting ``or given'' after 
     ``filed''; and
       (C) in clause (ii)--
       (i) by inserting ``or given'' after ``filed''; and
       (ii) by inserting ``, report, or notice'' after ``return''; 
     and
       (2) by adding at the end the following:

     ``For purposes of this subsection, the term `return' means a 
     return that satisfies the requirements of applicable 
     nonbankruptcy law (including applicable filing requirements). 
     Such term includes a return prepared pursuant to section 
     6020(a) of the Internal Revenue Code of 1986, or similar 
     State or local law, or a written stipulation to a judgment or 
     a final order entered by a nonbankruptcy tribunal, but does 
     not include a return made pursuant to section 6020(b) of the 
     Internal Revenue Code of 1986, or a similar State or local 
     law.''.

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

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

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

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

     ``Sec. 1308. Filing of prepetition tax returns

       ``(a) Not later than the day before the date on which the 
     meeting of the creditors is first scheduled to be held under 
     section 341(a), if the debtor was required to file a tax 
     return under applicable nonbankruptcy law, the debtor shall 
     file with appropriate tax authorities all tax returns for all 
     taxable periods ending during the 4-year period ending on the 
     date of the filing of the petition.
       ``(b)(1) Subject to paragraph (2), if the tax returns 
     required by subsection (a) have not been filed by the date on 
     which the meeting of creditors is first scheduled to be held 
     under section 341(a), the trustee may hold open that meeting 
     for a reasonable period of time to allow the debtor an 
     additional period of time to file any unfiled returns, but 
     such additional period of time shall not extend beyond--
       ``(A) for any return that is past due as of the date of the 
     filing of the petition, the date that is 120 days after the 
     date of that meeting; or
       ``(B) for any return that is not past due as of the date of 
     the filing of the petition, the later of--
       ``(i) the date that is 120 days after the date of that 
     meeting; or
       ``(ii) the date on which the return is due under the last 
     automatic extension of time for filing that return to which 
     the debtor is entitled, and for which request is timely made, 
     in accordance with applicable nonbankruptcy law.
       ``(2) After notice and a hearing, and order entered before 
     the tolling of any applicable filing period determined under 
     this subsection, if the debtor demonstrates by a 
     preponderance of the evidence that the failure to file a 
     return as required under this subsection is attributable to 
     circumstances beyond the control of the debtor, the court may 
     extend the filing period established by the trustee under 
     this subsection for--
       ``(A) a period of not more than 30 days for returns 
     described in paragraph (1); and
       ``(B) a period not to extend after the applicable extended 
     due date for a return described in paragraph (2).
       ``(c) For purposes of this section, the term `return' 
     includes a return prepared pursuant to subsection (a) or (b) 
     of section 6020 of the Internal Revenue Code of 1986, or a 
     similar State or local law, or a written stipulation to a 
     judgment or a final order entered by a nonbankruptcy 
     tribunal.''.
       (2) Conforming amendment.--The table of sections for 
     subchapter I of chapter 13 of title 11, United States Code, 
     is amended by adding at the end the following:
``1308. Filing of prepetition tax returns.''.

       (c) Dismissal or Conversion on Failure To Comply.--Section 
     1307 of title 11, United States Code, is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (2) by inserting after subsection (d) the following:
       ``(e) Upon the failure of the debtor to file a tax return 
     under section 1308, on request of a party in interest or the 
     United States trustee and after notice and a hearing, the 
     court shall dismiss a case or convert a case under this 
     chapter to a case under chapter 7 of this title, whichever is 
     in the best interest of the creditors and the estate.''.
       (d) Timely Filed Claims.--Section 502(b)(9) of title 11, 
     United States Code, is amended by inserting before the period 
     at the end the following: ``, and except that in a case under 
     chapter 13, a claim of a governmental unit for a tax with 
     respect to a return filed under section 1308 shall be timely 
     if the claim is filed on or before the date that is 60 days 
     after the date on which such return was filed as required''.
       (e) Rules for Objections to Claims and to Confirmation.--It 
     is the sense of Congress that the Judicial Conference of the 
     United States should, as soon as practicable after the date 
     of enactment of this Act, propose amended Federal Rules of 
     Bankruptcy Procedure that provide--

[[Page 1227]]

       (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 
     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

[[Page 1228]]

     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.

                   ``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.

[[Page 1229]]



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

     ``Sec. 1509. Right of direct access

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

     ``Sec. 1510. Limited jurisdiction

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

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

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

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

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

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

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

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

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

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

     ``Sec. 1515. Application for recognition

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

     ``Sec. 1516. Presumptions concerning recognition

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

     ``Sec. 1517. Order granting recognition

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

     ``Sec. 1518. Subsequent information

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

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

       ``(a) From the time of filing a petition for recognition 
     until the court rules on the petition, the court may, at the 
     request of the foreign representative, where relief is 
     urgently needed to protect the assets of the debtor or the 
     interests of the creditors, grant relief of a provisional 
     nature, including--
       ``(1) staying execution against the debtor's assets;
       ``(2) entrusting the administration or realization of all 
     or part of the debtor's assets located in the United States 
     to the foreign representative or another person authorized by 
     the court, including an examiner, in order to protect and 
     preserve the value of assets that,

[[Page 1230]]

     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, 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

[[Page 1231]]

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

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

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

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

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

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

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

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

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

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

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

       ``A case under chapter 15 of title 11 may be commenced in 
     the district court of the United States for the district--
       ``(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;

[[Page 1232]]

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

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

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

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

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

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

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

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

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product

[[Page 1233]]

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

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

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

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

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

     For purposes of this clause, the term `qualified foreign 
     government security' means a security that is a direct 
     obligation of, or that is fully guaranteed by, the central 
     government of a member of the Organization for Economic 
     Cooperation and Development (as determined by regulation or 
     order adopted by the appropriate Federal banking 
     authority).''.
       (2) Insured credit unions.--Section 207(c)(8)(D)(v) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(v)) is 
     amended to read as follows:
       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (which definition also applies to a reverse 
     repurchase agreement)--

       ``(I) means an agreement, including related terms, which 
     provides for the transfer of one or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in the Securities Exchange Act of 1934), mortgage loans, 
     interests in mortgage-related securities or mortgage loans, 
     eligible bankers' acceptances, qualified foreign government 
     securities or securities that are direct obligations of, or 
     that are fully guaranteed by, the United States or any agency 
     of the United States against the transfer of funds 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

[[Page 1234]]

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

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

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

     Such term is applicable for purposes of this subsection only 
     and shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank 
     Products Act of 2000.''.
       (g) Definition of Transfer.--
       (1) FDIC-insured depository institutions.--Section 
     11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the depository 
     institution's equity of redemption.''.
       (2) Insured credit unions.--Section 207(c)(8)(D) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) (as 
     amended by subsection (f) of this section) is amended by 
     adding at the end the following new clause:
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the depository 
     institution's equity of redemption.''.
       (h) Treatment of Qualified Financial Contracts.--
       (1) FDIC-insured depository institutions.--Section 11(e)(8) 
     of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) 
     is amended--
       (A) in subparagraph (A)--
       (i) by striking ``paragraph (10)'' and inserting 
     ``paragraphs (9) and (10)'';
       (ii) in clause (i), by striking ``to cause the termination 
     or liquidation'' and inserting ``such person has to cause the 
     termination, liquidation, or acceleration''; and
       (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

[[Page 1235]]

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

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

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

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

       ``(ii) transfer none of the qualified financial contracts, 
     claims, property or other credit enhancement referred to in 
     clause (i) (with respect to such person and any affiliate of 
     such person).
       ``(B) Transfer to foreign bank, foreign financial 
     institution, or branch or agency of a foreign bank or 
     financial institution.--In transferring any qualified 
     financial contracts and related claims and property under 
     subparagraph (A)(i), the conservator or receiver for the 
     depository institution shall not make such transfer to a 
     foreign bank, financial institution organized under the laws 
     of a foreign country, or a branch or agency of a foreign bank 
     or financial institution unless, under the law applicable to 
     such bank, financial institution, branch or agency, to the 
     qualified financial contracts, and to any netting contract, 
     any security agreement or arrangement or other credit 
     enhancement related to one or more qualified financial 
     contracts, the contractual rights of the parties to such 
     qualified financial contracts, netting contracts, security 
     agreements or arrangements, or other credit enhancements are 
     enforceable substantially to the same extent as permitted 
     under this section.
       ``(C) Transfer of contracts subject to the rules of a 
     clearing organization.--In the event that a conservator or 
     receiver transfers any qualified financial contract and 
     related claims, property, and credit enhancements pursuant to 
     subparagraph (A)(i) and such contract is cleared by or 
     subject to the rules of a clearing organization, the clearing 
     organization shall not be required to accept the transferee 
     as a member by virtue of the transfer.
       ``(D) Definitions.--For purposes of this paragraph, the 
     term `financial institution' means a broker or dealer, a 
     depository institution, a futures commission merchant, or any 
     other institution, as determined by the Corporation by 
     regulation to be a financial institution, and the term 
     `clearing organization' has the same meaning as in section 
     402 of the Federal Deposit Insurance Corporation Improvement 
     Act of 1991.''.
       (2) Notice to qualified financial contract 
     counterparties.--Section 11(e)(10)(A) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended in the 
     material immediately following clause (ii) by striking ``the 
     conservator'' and all that follows through the period and 
     inserting the following: ``the conservator or receiver shall 
     notify any person who is a party to any such contract of such 
     transfer by 5:00 p.m. (eastern time) on the business day 
     following the date of the appointment of the receiver in the 
     case of a receivership, or the business day following such 
     transfer in the case of a conservatorship.''.
       (3) Rights against receiver and conservator and treatment 
     of bridge banks.-- 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

[[Page 1236]]

     which is otherwise the subject of a bankruptcy or insolvency 
     proceeding for purposes of paragraph (9):
       ``(i) A bridge bank.
       ``(ii) A depository institution organized by the 
     Corporation, for which a conservator is appointed either--

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

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

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

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

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

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

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

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

       (a) FDIC-Insured Depository Institutions.--Section 11(e) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1821(e)) is 
     amended--
       (1) by redesignating paragraphs (11) through (15) as 
     paragraphs (12) through (16), respectively;
       (2) by inserting after paragraph (10) the following new 
     paragraph:
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which an insured depository 
     institution is a party, the conservator or receiver for such 
     institution shall either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(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

[[Page 1237]]

     subparagraph (A) (with respect to such person or any 
     affiliate of such person).''; and
       (3) by adding at the end the following new paragraph:
       ``(15) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section (a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.''.

     SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.

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

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

       (a) Definitions.--Section 402 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
     4402) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A)(ii), by inserting before the 
     semicolon ``, or is exempt from such registration by order of 
     the Securities and Exchange Commission''; and
       (B) in subparagraph (B), by inserting before the period ``, 
     that has been granted an exemption under section 4(c)(1) of 
     the Commodity Exchange Act, or that is a multilateral 
     clearing organization (as defined in section 408 of this 
     Act)'';
       (2) in paragraph (6)--
       (A) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively;
       (B) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) an uninsured national bank or an uninsured State bank 
     that is a member of the Federal Reserve System, if the 
     national bank or State member bank is not eligible to make 
     application to become an insured bank under section 5 of the 
     Federal Deposit Insurance Act;''; and
       (C) by amending subparagraph (C), so redesignated, to read 
     as follows:
       ``(C) a branch or agency of a foreign bank, a foreign bank 
     and any branch or agency of the foreign bank, or the foreign 
     bank that established the branch or agency, as those terms 
     are defined in section 1(b) of the International Banking Act 
     of 1978;'';
       (3) in paragraph (11), by inserting before the period ``and 
     any other clearing organization with which such clearing 
     organization has a netting contract'';
       (4) by amending paragraph (14)(A)(i) to read as follows:
       ``(i) means a contract or agreement between 2 or more 
     financial institutions, clearing organizations, or members 
     that provides for netting present or future payment 
     obligations or payment entitlements (including liquidation or 
     close out values relating to such obligations or 
     entitlements) among the parties to the agreement; and''; and
       (5) by adding at the end the following new paragraph:
       ``(15) Payment.--The term `payment' means a payment of 
     United States dollars, another currency, or a composite 
     currency, and a noncash delivery, including a payment or 
     delivery to liquidate an unmatured obligation.''.
       (b) Enforceability of Bilateral Netting Contracts.--Section 
     403 of the Federal Deposit Insurance Corporation Improvement 
     Act of 1991 (12 U.S.C. 4403) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) 
     of the Federal Credit Union Act, or any order authorized 
     under section 5(b)(2) of the Securities Investor Protection 
     Act of 1970), the covered contractual payment obligations and 
     the covered contractual payment entitlements between any 2 
     financial institutions shall be netted in accordance with, 
     and subject to the conditions of, the terms of any applicable 
     netting contract (except as provided in section 561(b)(2) of 
     title 11, United States Code).''; and
       (2) by adding at the end the following new subsection:
       ``(f) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to one or more netting contracts 
     between any 2 financial institutions shall be enforceable in 
     accordance with their terms (except as provided in section 
     561(b)(2) of title 11, United States Code), and shall not be 
     stayed, avoided, or otherwise limited by any State or Federal 
     law (other than paragraphs (8)(E), (8)(F), and (10)(B) of 
     section 11(e) of the Federal Deposit Insurance Act, 
     paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) of 
     the Federal Credit Union Act, and section 5(b)(2) of the 
     Securities Investor Protection Act of 1970).''.
       (c) Enforceability of Clearing Organization Netting 
     Contracts.--Section 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 4404) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) General Rule.--Notwithstanding any other provision of 
     State or Federal law (other than paragraphs (8)(E), (8)(F), 
     and (10)(B) of section 11(e) of the Federal Deposit Insurance 
     Act, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) 
     of the Federal Credit Union Act, and any order authorized 
     under section 5(b)(2) of the Securities Investor Protection 
     Act of 1970), the covered contractual payment obligations and 
     the covered contractual payment entitlements of a member of a 
     clearing organization to and from all other members of a 
     clearing organization shall be netted in accordance with and 
     subject to the conditions of any applicable netting contract 
     (except as provided in section 561(b)(2) of title 11, United 
     States Code).''; and
       (2) by adding at the end the following new subsection:
       ``(h) Enforceability of Security Agreements.--The 
     provisions of any security agreement or arrangement or other 
     credit enhancement related to one or more netting contracts 
     between any 2 members of a clearing organization shall be 
     enforceable in accordance with their terms (except as 
     provided in section 561(b)(2) of title 11, United States 
     Code), and shall not be stayed, avoided, or otherwise limited 
     by any State or Federal law (other than paragraphs (8)(E), 
     (8)(F), and (10)(B) of section 11(e) of the Federal Deposit 
     Insurance Act, paragraphs (8)(E), (8)(F), and (10)(B) of 
     section 207(c) of the Federal Credit Union Act, and section 
     5(b)(2) of the Securities Investor Protection Act of 
     1970).''.
       (d) Enforceability of Contracts With Uninsured National 
     Banks, Uninsured Federal Branches and Agencies, Certain 
     Uninsured State Member Banks, and Edge Act Corporations.--The 
     Federal Deposit Insurance Corporation Improvement Act of 1991 
     (12 U.S.C. 4401 et seq.) is amended--
       (1) by redesignating section 407 as section 407A; and
       (2) by inserting after section 406 the following new 
     section:

     ``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

[[Page 1238]]

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

     SEC. 907. BANKRUPTCY LAW AMENDMENTS.

       (a) Definitions of Forward Contract, Repurchase Agreement, 
     Securities Clearing Agency, Swap Agreement, Commodity 
     Contract, and Securities Contract.--Title 11, United States 
     Code, is amended--
       (1) in section 101--
       (A) in paragraph (25)--
       (i) by striking ``means a contract'' and inserting 
     ``means--
       ``(A) a contract'';
       (ii) by striking ``, or any combination thereof or option 
     thereon;'' and inserting ``, or any other similar 
     agreement;''; and
       (iii) by adding at the end the following:
       ``(B) any combination of agreements or transactions 
     referred to in subparagraphs (A) and (C);
       ``(C) any option to enter into an agreement or transaction 
     referred to in subparagraph (A) or (B);
       ``(D) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), or (C), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this paragraph, except that such master agreement shall 
     be considered to be a forward contract under this paragraph 
     only with respect to each agreement or transaction under such 
     master agreement that is referred to in subparagraph (A), 
     (B), or (C); or
       ``(E) any security agreement or arrangement, or other 
     credit enhancement related to any agreement or transaction 
     referred to in subparagraph (A), (B), (C), or (D), including 
     any guarantee or reimbursement obligation by or to a forward 
     contract merchant or financial participant in connection with 
     any agreement or transaction referred to in any such 
     subparagraph, but not to exceed the damages in connection 
     with any such agreement or transaction, measured in 
     accordance with section 562;'';
       (B) in paragraph (46), by striking ``on any day during the 
     period beginning 90 days before the date of'' and inserting 
     ``at any time before'';
       (C) by amending paragraph (47) to read as follows:
       ``(47) `repurchase agreement' (which definition also 
     applies to a reverse repurchase agreement)--
       ``(A) means--
       ``(i) an agreement, including related terms, which provides 
     for the transfer of one or more certificates of deposit, 
     mortgage related securities (as defined in section 3 of the 
     Securities Exchange Act of 1934), mortgage loans, interests 
     in mortgage related securities or mortgage loans, eligible 
     bankers' acceptances, qualified foreign government securities 
     (defined as a security that is a direct obligation of, or 
     that is fully guaranteed by, the central government of a 
     member of the Organization for Economic Cooperation and 
     Development), or securities that are direct obligations of, 
     or that are fully guaranteed by, the United States or any 
     agency of the United States against the transfer of funds by 
     the transferee of such certificates of deposit, eligible 
     bankers' acceptances, securities, mortgage loans, or 
     interests, with a simultaneous agreement by such transferee 
     to transfer to the transferor thereof certificates of 
     deposit, eligible bankers' acceptance, securities, mortgage 
     loans, or interests of the kind described in this clause, at 
     a date certain not later than 1 year after such transfer or 
     on demand, against the transfer of funds;
       ``(ii) any combination of agreements or transactions 
     referred to in clauses (i) and (iii);
       ``(iii) an option to enter into an agreement or transaction 
     referred to in clause (i) or (ii);
       ``(iv) a master agreement that provides for an agreement or 
     transaction referred to in clause (i), (ii), or (iii), 
     together with all supplements to any such master agreement, 
     without regard to whether such master agreement provides for 
     an agreement or transaction that is not a repurchase 
     agreement under this paragraph, except that such master 
     agreement shall be considered to be a repurchase agreement 
     under this paragraph only with respect to each agreement or 
     transaction under the master agreement that is referred to in 
     clause (i), (ii), or (iii); or
       ``(v) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in clause (i), (ii), (iii), or (iv), including any 
     guarantee or reimbursement obligation by or to a repo 
     participant or financial participant in connection with any 
     agreement or transaction referred to in any such clause, but 
     not to exceed the damages in connection with any such 
     agreement or transaction, measured in accordance with section 
     562 of this title; and
       ``(B) does not include a repurchase obligation under a 
     participation in a commercial mortgage loan;'';
       (D) in paragraph (48), by inserting ``, or exempt from such 
     registration under such section pursuant to an order of the 
     Securities and Exchange Commission,'' after ``1934''; and
       (E) by amending paragraph (53B) to read as follows:
       ``(53B) `swap agreement'--
       ``(A) means--
       ``(i) any agreement, including the terms and conditions 
     incorporated by reference in such agreement, which is--

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

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

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

       ``(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

[[Page 1239]]

     to exceed the damages in connection with any such agreement 
     or transaction, measured in accordance with section 562; and
       ``(B) is applicable for purposes of this title only, and 
     shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank 
     Products Act of 2000;'';
       (2) in section 741(7), by striking paragraph (7) and 
     inserting the following:
       ``(7) `securities contract'--
       ``(A) means--
       ``(i) a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including an interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option, 
     and including any repurchase or reverse repurchase 
     transaction on any such security, certificate of deposit, 
     mortgage loan, interest, group or index, or option;
       ``(ii) any option entered into on a national securities 
     exchange relating to foreign currencies;
       ``(iii) the guarantee by or to any securities clearing 
     agency of a settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, or mortgage loans or interests therein 
     (including any interest therein or based on the value 
     thereof), or option on any of the foregoing, including an 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option;
       ``(iv) any margin loan;
       ``(v) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this subparagraph;
       ``(vi) any combination of the agreements or transactions 
     referred to in this subparagraph;
       ``(vii) any option to enter into any agreement or 
     transaction referred to in this subparagraph;
       ``(viii) a master agreement that provides for an agreement 
     or transaction referred to in clause (i), (ii), (iii), (iv), 
     (v), (vi), or (vii), together with all supplements to any 
     such master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a securities contract under this subparagraph, except 
     that such master agreement shall be considered to be a 
     securities contract under this subparagraph only with respect 
     to each agreement or transaction under such master agreement 
     that is referred to in clause (i), (ii), (iii), (iv), (v), 
     (vi), or (vii); or
       ``(ix) any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this subparagraph, including any guarantee or 
     reimbursement obligation by or to a stockbroker, securities 
     clearing agency, financial institution, or financial 
     participant in connection with any agreement or transaction 
     referred to in this subparagraph, but not to exceed the 
     damages in connection with any such agreement or transaction, 
     measured in accordance with section 562; and
       ``(B) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan;''; and
       (3) in section 761(4)--
       (A) by striking ``or'' at the end of subparagraph (D); and
       (B) by adding at the end the following:
       ``(F) any other agreement or transaction that is similar to 
     an agreement or transaction referred to in this paragraph;
       ``(G) any combination of the agreements or transactions 
     referred to in this paragraph;
       ``(H) any option to enter into an agreement or transaction 
     referred to in this paragraph;
       ``(I) a master agreement that provides for an agreement or 
     transaction referred to in subparagraph (A), (B), (C), (D), 
     (E), (F), (G), or (H), together with all supplements to such 
     master agreement, without regard to whether the master 
     agreement provides for an agreement or transaction that is 
     not a commodity contract under this paragraph, except that 
     the master agreement shall be considered to be a commodity 
     contract under this paragraph only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subparagraph (A), (B), (C), (D), (E), (F), 
     (G), or (H); or
       ``(J) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this paragraph, including any guarantee or 
     reimbursement obligation by or to a commodity broker or 
     financial participant in connection with any agreement or 
     transaction referred to in this paragraph, but not to exceed 
     the damages in connection with any such agreement or 
     transaction, measured in accordance with section 562;''.
       (b) Definitions of Financial Institution, Financial 
     Participant, and Forward Contract Merchant.--Section 101 of 
     title 11, United States Code, is amended--
       (1) by striking paragraph (22) and inserting the following:
       ``(22) `financial institution' means--
       ``(A) a Federal reserve bank, or an entity (domestic or 
     foreign) that is a commercial or savings bank, industrial 
     savings bank, savings and loan association, trust company, 
     federally-insured credit union, or receiver, liquidating 
     agent, or conservator for such entity and, when any such 
     Federal reserve bank, receiver, liquidating agent, 
     conservator or entity is acting as agent or custodian for a 
     customer in connection with a securities contract (as defined 
     in section 741) such customer; or
       ``(B) in connection with a securities contract (as defined 
     in section 741) an investment company registered under the 
     Investment Company Act of 1940;'';
       (2) by inserting after paragraph (22) the following:
       ``(22A) `financial participant' means--
       ``(A) an entity that, at the time it enters into a 
     securities contract, commodity contract, swap agreement, 
     repurchase agreement, or forward contract, or at the time of 
     the date of the filing of the petition, has one or more 
     agreements or transactions described in paragraph (1), (2), 
     (3), (4), (5), or (6) of section 561(a) with the debtor or 
     any other entity (other than an affiliate) of a total gross 
     dollar value of not less than $1,000,000,000 in notional or 
     actual principal amount outstanding on any day during the 
     previous 15-month period, or has gross mark-to-market 
     positions of not less than $100,000,000 (aggregated across 
     counterparties) in one or more such agreements or 
     transactions with the debtor or any other entity (other than 
     an affiliate) on any day during the previous 15-month period; 
     or
       ``(B) a clearing organization (as defined in section 402 of 
     the Federal Deposit Insurance Corporation Improvement Act of 
     1991);''; and
       (3) by striking paragraph (26) and inserting the following:
       ``(26) `forward contract merchant' means a Federal reserve 
     bank, or an entity the business of which consists in whole or 
     in part of entering into forward contracts as or with 
     merchants in a commodity (as defined in section 761) or any 
     similar good, article, service, right, or interest which is 
     presently or in the future becomes the subject of dealing in 
     the forward contract trade;''.
       (c) Definition of Master Netting Agreement and Master 
     Netting Agreement Participant.--Section 101 of title 11, 
     United States Code, is amended by inserting after paragraph 
     (38) the following new paragraphs:
       ``(38A) `master netting agreement'--
       ``(A) means an agreement providing for the exercise of 
     rights, including rights of netting, setoff, liquidation, 
     termination, acceleration, or close out, under or in 
     connection with one or more contracts that are described in 
     any one or more of paragraphs (1) through (5) of section 
     561(a), or any security agreement or arrangement or other 
     credit enhancement related to one or more of the foregoing, 
     including any guarantee or reimbursement obligation related 
     to 1 or more of the foregoing; and
       ``(B) if the agreement contains provisions relating to 
     agreements or transactions that are not contracts described 
     in paragraphs (1) through (5) of section 561(a), shall be 
     deemed to be a master netting agreement only with respect to 
     those agreements or transactions that are described in any 
     one or more of paragraphs (1) through (5) of section 561(a);
       ``(38B) `master netting agreement participant' means an 
     entity that, at any time before the date of the filing of the 
     petition, is a party to an outstanding master netting 
     agreement with the debtor;''.
       (d) Swap Agreements, Securities Contracts, Commodity 
     Contracts, Forward Contracts, Repurchase Agreements, and 
     Master Netting Agreements Under the Automatic-Stay.--
       (1) In general.--Section 362(b) of title 11, United States 
     Code, as amended by sections 224, 303, 311, 401, and 718, is 
     amended--
       (A) in paragraph (6), by inserting ``, pledged to, under 
     the control of,'' after ``held by'';
       (B) in paragraph (7), by inserting ``, pledged to, under 
     the control of,'' after ``held by'';
       (C) by striking paragraph (17) and inserting the following:
       ``(17) under subsection (a), of the setoff by a swap 
     participant or financial participant of a mutual debt and 
     claim under or in connection with one or more swap agreements 
     that constitutes the setoff of a claim against the debtor for 
     any payment or other transfer of 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

[[Page 1240]]

     mutual debt and claim under or in connection with one or more 
     master netting agreements or any contract or agreement 
     subject to such agreements that constitutes the setoff of a 
     claim against the debtor for any payment or other transfer of 
     property due from the debtor under or in connection with such 
     agreements or any contract or agreement subject to such 
     agreements against any payment due to the debtor from such 
     master netting agreement participant under or in connection 
     with such agreements or any contract or agreement subject to 
     such agreements or against cash, securities, or other 
     property held by, pledged to, under the control of, or due 
     from such master netting agreement participant to margin, 
     guarantee, secure, or settle such agreements or any contract 
     or agreement subject to such agreements, to the extent that 
     such participant is eligible to exercise such offset rights 
     under paragraph (6), (7), or (17) for each individual 
     contract covered by the master netting agreement in issue; 
     and''.
       (2) Limitation.--Section 362 of title 11, United States 
     Code, as amended by sections 106, 305, 311, and 441, is 
     amended by adding at the end the following:
       ``(o) The exercise of rights not subject to the stay 
     arising under subsection (a) pursuant to paragraph (6), (7), 
     (17), or (27) of subsection (b) shall not be stayed by any 
     order of a court or administrative agency in any proceeding 
     under this title.''.
       (e) Limitation of Avoidance Powers Under Master Netting 
     Agreement.--Section 546 of title 11, United States Code, is 
     amended--
       (1) in subsection (g) (as added by section 103 of Public 
     Law 101-311)--
       (A) by striking ``under a swap agreement'';
       (B) by striking ``in connection with a swap agreement'' and 
     inserting ``under or in connection with any swap agreement''; 
     and
       (C) by inserting ``or financial participant'' after ``swap 
     participant''; and
       (2) by adding at the end the following:
       ``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), 
     and 548(b) the trustee may not avoid a transfer made by or to 
     a master netting agreement participant under or in connection 
     with any master netting agreement or any individual contract 
     covered thereby that is made before the commencement of the 
     case, except under section 548(a)(1)(A) and except to the 
     extent that the trustee could otherwise avoid such a transfer 
     made under an individual contract covered by such master 
     netting agreement.''.
       (f) Fraudulent Transfers of Master Netting Agreements.--
     Section 548(d)(2) of title 11, United States Code, is 
     amended--
       (1) in subparagraph (C), by striking ``and'' at the end;
       (2) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) a master netting agreement participant that receives 
     a transfer in connection with a master netting agreement or 
     any individual contract covered thereby takes for value to 
     the extent of such transfer, except that, with respect to a 
     transfer under any individual contract covered thereby, to 
     the extent that such master netting agreement participant 
     otherwise did not take (or is otherwise not deemed to have 
     taken) such transfer for value.''.
       (g) Termination or Acceleration of Securities Contracts.--
     Section 555 of title 11, United States Code, is amended--
       (1) by amending the section heading to read as follows:

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

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

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

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

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

       (2) in the first sentence, by striking ``liquidation'' and 
     inserting ``liquidation, termination, or acceleration''; and
       (3) in the third sentence, by striking ``As used'' and all 
     that follows through ``right,'' and inserting ``As used in 
     this section, the term `contractual right' includes a right 
     set forth in a rule or bylaw of a derivatives clearing 
     organization (as defined in the Commodity Exchange Act), a 
     multilateral clearing organization (as defined in the Federal 
     Deposit Insurance Corporation Improvement Act of 1991), a 
     national securities exchange, a national securities 
     association, a securities clearing agency, a contract market 
     designated under the Commodity Exchange Act, a derivatives 
     transaction execution facility registered under the Commodity 
     Exchange Act, or a board of trade (as defined in the 
     Commodity Exchange Act) or in a resolution of the governing 
     board thereof and a right,''.
       (j) Liquidation, Termination, or Acceleration of Swap 
     Agreements.--Section 560 of title 11, United States Code, is 
     amended--
       (1) by amending the section heading to read as follows:

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

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

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

       ``(a) Subject to subsection (b), the exercise of any 
     contractual right, because of a condition of the kind 
     specified in section 365(e)(1), to cause the termination, 
     liquidation, or acceleration of or to offset or net 
     termination values, payment amounts, or other transfer 
     obligations arising under or in connection with one or more 
     (or the termination, liquidation, or acceleration of one or 
     more)--
       ``(1) securities contracts, as defined in section 741(7);
       ``(2) commodity contracts, as defined in section 761(4);
       ``(3) forward contracts;
       ``(4) repurchase agreements;
       ``(5) swap agreements; or
       ``(6) master netting agreements,
     shall not be stayed, avoided, or otherwise limited by 
     operation of any provision of this title or by any order of a 
     court or administrative agency in any proceeding under this 
     title.
       ``(b)(1) A party may exercise a contractual right described 
     in subsection (a) to terminate, liquidate, or accelerate only 
     to the extent that such party could exercise such a right 
     under section 555, 556, 559, or 560 for each individual 
     contract covered by the master netting agreement in issue.
       ``(2) If a debtor is a commodity broker subject to 
     subchapter IV of chapter 7--
       ``(A) a party may not net or offset an obligation to the 
     debtor arising under, or in connection with, a commodity 
     contract traded on or subject to the rules of a contract 
     market designated under the Commodity Exchange Act or a 
     derivatives transaction execution facility registered under 
     the Commodity Exchange Act against any claim arising under, 
     or in connection with, other instruments, contracts, or 
     agreements listed in subsection (a) except to the extent that 
     the party has positive net equity in the commodity accounts 
     at the debtor, as calculated under such subchapter; and
       ``(B) another commodity broker may not net or offset an 
     obligation to the debtor arising under, or in connection 
     with, a commodity contract entered into or held on behalf of 
     a customer of the debtor and traded 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).

[[Page 1241]]

       ``(3) No provision of subparagraph (A) or (B) of paragraph 
     (2) shall prohibit the offset of claims and obligations that 
     arise under--
       ``(A) a cross-margining agreement or similar arrangement 
     that has been approved by the Commodity Futures Trading 
     Commission or submitted to the Commodity Futures Trading 
     Commission under paragraph (1) or (2) of section 5c(c) of the 
     Commodity Exchange Act and has not been abrogated or rendered 
     ineffective by the Commodity Futures Trading Commission; or
       ``(B) any other netting agreement between a clearing 
     organization (as defined in section 761) and another entity 
     that has been approved by the Commodity Futures Trading 
     Commission.
       ``(c) As used in this section, the term `contractual right' 
     includes a right set forth in a rule or bylaw of a 
     derivatives clearing organization (as defined in the 
     Commodity Exchange Act), a multilateral clearing organization 
     (as defined in the Federal Deposit Insurance Corporation 
     Improvement Act of 1991), a national securities exchange, a 
     national securities association, a securities clearing 
     agency, a contract market designated under the Commodity 
     Exchange Act, a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act) or in a 
     resolution of the governing board thereof, and a right, 
     whether or not evidenced in writing, arising under common 
     law, under law merchant, or by reason of normal business 
     practice.
       ``(d) Any provisions of this title relating to securities 
     contracts, commodity contracts, forward contracts, repurchase 
     agreements, swap agreements, or master netting agreements 
     shall apply in a case under chapter 15, so that enforcement 
     of contractual provisions of such contracts and agreements in 
     accordance with their terms will not be stayed or otherwise 
     limited by operation of any provision of this title or by 
     order of a court in any case under this title, and to limit 
     avoidance powers to the same extent as in a proceeding under 
     chapter 7 or 11 of this title (such enforcement not to be 
     limited based on the presence or absence of assets of the 
     debtor in the United States).''.
       (2) Conforming amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, is amended by 
     inserting after the item relating to section 560 the 
     following:

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

       (l) Commodity Broker Liquidations.--Title 11, United States 
     Code, is amended by inserting after section 766 the 
     following:

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

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

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

       ``Notwithstanding any other provision of this title, the 
     exercise of rights by a forward contract merchant, commodity 
     broker, stockbroker, financial institution, financial 
     participant, securities clearing agency, swap participant, 
     repo participant, or master netting agreement participant 
     under this title shall not affect the priority of any 
     unsecured claim it may have after the exercise of such 
     rights.''.
       (n) Setoff.--Section 553 of title 11, United States Code, 
     is amended--
       (1) in subsection (a)(2)(B)(ii), by inserting before the 
     semicolon the following: ``(except for a setoff of a kind 
     described in section 362(b)(6), 362(b)(7), 362(b)(17), 
     362(b)(27), 555, 556, 559, 560, or 561)'';
       (2) in subsection (a)(3)(C), by inserting before the period 
     the following: ``(except for a setoff of a kind described in 
     section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 
     556, 559, 560, or 561)''; and
       (3) in subsection (b)(1), by striking ``362(b)(14),'' and 
     inserting ``362(b)(17), 362(b)(27), 555, 556, 559, 560, 
     561,''.
       (o) Securities Contracts, Commodity Contracts, and Forward 
     Contracts.--Title 11, United States Code, is amended--
       (1) in section 362(b)(6), by striking ``financial 
     institutions,'' each place such term appears and inserting 
     ``financial institution, financial participant,'';
       (2) in sections 362(b)(7) and 546(f), by inserting ``or 
     financial participant'' after ``repo participant'' each place 
     such term appears;
       (3) in section 546(e), by inserting ``financial 
     participant,'' after ``financial institution,'';
       (4) in section 548(d)(2)(B), by inserting ``financial 
     participant,'' after ``financial institution,'';
       (5) in section 548(d)(2)(C), by inserting ``or financial 
     participant'' after ``repo participant'';
       (6) in section 548(d)(2)(D), by inserting ``or financial 
     participant'' after ``swap participant'';
       (7) in section 555--
       (A) by inserting ``financial participant,'' after 
     ``financial institution,''; and
       (B) by striking the second sentence and inserting the 
     following: ``As used in this section, the term `contractual 
     right' includes a right set forth in a rule or bylaw of a 
     derivatives clearing organization (as defined in the 
     Commodity Exchange Act), a multilateral clearing organization 
     (as defined in the Federal Deposit Insurance Corporation 
     Improvement Act of 1991), a national securities exchange, a 
     national securities association, a securities clearing 
     agency, a contract market designated under the Commodity 
     Exchange Act, a derivatives transaction execution facility 
     registered under the Commodity Exchange Act, or a board of 
     trade (as defined in the Commodity Exchange Act), or in a 
     resolution of the governing board thereof, and a right, 
     whether or not in writing, arising under common law, under 
     law merchant, or by reason of normal business practice.'';
       (8) in section 556, by inserting ``, financial 
     participant,'' after ``commodity broker'';
       (9) in section 559, by inserting ``or financial 
     participant'' after ``repo participant'' each place such term 
     appears; and
       (10) in section 560, by inserting ``or financial 
     participant'' after ``swap participant''.
       (p) Conforming Amendments.--Title 11, United States Code, 
     is amended--
       (1) in the table of sections for chapter 5--
       (A) by amending the items relating to sections 555 and 556 
     to read as follows:

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

     and
       (B) by amending the items relating to sections 559 and 560 
     to read as follows:

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

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

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

     and
       (B) by inserting after the item relating to section 752 the 
     following:

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

     SEC. 908. RECORDKEEPING REQUIREMENTS.

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

     SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION 
                   REQUIREMENT.

       Section 13(e)(2) of the Federal Deposit Insurance Act (12 
     U.S.C. 1823(e)(2)) is amended to read as follows:
       ``(2) Exemptions from contemporaneous execution 
     requirement.--An agreement to provide for the lawful 
     collateralization of--

[[Page 1242]]

       ``(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.''.

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

     SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

       (a) Reenactment.--
       (1) In general.--Chapter 12 of title 11, United States 
     Code, as reenacted by section 149 of division C of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999 (Public Law 105-277), and as in 
     effect on June 30, 2005, is hereby reenacted.
       (2) Effective date of reenactment.--Paragraph (1) shall 
     take effect on July 1, 2005.
       (b) Amendments--Chapter 12 of title 11, United States Code, 
     as reenacted by subsection (a), is amended by this Act.
       (c) Conforming Amendment.--Section 302 of the Bankruptcy 
     Judges, United States Trustees, and Family Farmer Bankruptcy 
     Act of 1986 (28 U.S.C. 581 note) is amended by striking 
     subsection (f).

     SEC. 1002. DEBT LIMIT INCREASE.

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

     SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

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

     SEC. 1004. DEFINITION OF FAMILY FARMER.

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

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

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

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

       (a) Confirmation of Plan.--Section 1225(b)(1) of title 11, 
     United States Code, is amended--
       (1) in subparagraph (A) by striking ``or'' at the end;
       (2) in subparagraph (B) by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the value of the property to be distributed under the 
     plan in the 3-year period, or such longer period as the court 
     may approve under section 1222(c), beginning on the date that 
     the first distribution is due under the plan is not less than 
     the debtor's projected disposable income for such period.''.
       (b) Modification of Plan.--Section 1229 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(d) A plan may not be modified under this section--

[[Page 1243]]

       ``(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--

       ``(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

[[Page 1244]]

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

     SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

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

     SEC. 1203. EXTENSION OF TIME.

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

     SEC. 1204. TECHNICAL AMENDMENTS.

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

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

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

     SEC. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL 
                   PERSONS.

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

     SEC. 1207. EFFECT OF CONVERSION.

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

     SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

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

     SEC. 1209. EXCEPTIONS TO DISCHARGE.

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

     SEC. 1210. EFFECT OF DISCHARGE.

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

     SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

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

[[Page 1245]]



     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 2005''.
       (b) Temporary Judgeships.--
       (1) Appointments.--The following bankruptcy judges shall be 
     appointed in the manner prescribed in section 152(a)(1) of 
     title 28, United States Code, for the appointment of 
     bankruptcy judges provided for in section 152(a)(2) of such 
     title:
       (A) One additional bankruptcy judge for the eastern 
     district of California.
       (B) Three additional bankruptcy judges for the central 
     district of California.
       (C) Four additional bankruptcy judges for the district of 
     Delaware.
       (D) Two additional bankruptcy judges for the southern 
     district of Florida.
       (E) One additional bankruptcy judge for the southern 
     district of Georgia.
       (F) Three additional bankruptcy judges for the district of 
     Maryland.
       (G) One additional bankruptcy judge for the eastern 
     district of Michigan.
       (H) One additional bankruptcy judge for the southern 
     district of Mississippi.
       (I) One additional bankruptcy judge for the district of New 
     Jersey.
       (J) One additional bankruptcy judge for the eastern 
     district of New York.
       (K) One additional bankruptcy judge for the northern 
     district of New York.
       (L) One additional bankruptcy judge for the southern 
     district of New York.
       (M) One additional bankruptcy judge for the eastern 
     district of North Carolina.
       (N) One additional bankruptcy judge for the eastern 
     district of Pennsylvania.
       (O) One additional bankruptcy judge for the middle district 
     of Pennsylvania.
       (P) One additional bankruptcy judge for the district of 
     Puerto Rico.
       (Q) One additional bankruptcy judge for the western 
     district of Tennessee.
       (R) One additional bankruptcy judge for the eastern 
     district of Virginia.
       (S) One additional bankruptcy judge for the district of 
     South Carolina.
       (T) One additional bankruptcy judge for the district of 
     Nevada.
       (2) Vacancies.--
       (A) Districts with single appointments.--Except as provided 
     in subparagraphs (B), (C), (D), and (E), the first vacancy 
     occurring in the office of bankruptcy judge in each of the 
     judicial districts set forth in paragraph (1)--
       (i) occurring 5 years or more after the appointment date of 
     the bankruptcy judge appointed under paragraph (1) to such 
     office; and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (B) Central district of california.--The 1st, 2d, and 3d 
     vacancies in the office of bankruptcy judge in the central 
     district of California--
       (i) occurring 5 years or more after the respective 1st, 2d, 
     and 3d appointment dates of the bankruptcy judges appointed 
     under paragraph (1)(B); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (C) District of delaware.--The 1st, 2d, 3d, and 4th 
     vacancies in the office of bankruptcy judge in the district 
     of Delaware--
       (i) occurring 5 years or more after the respective 1st, 2d, 
     3d, and 4th appointment dates of the bankruptcy judges 
     appointed under paragraph (1)(F); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (D) Southern district of florida.--The 1st and 2d vacancies 
     in the office of bankruptcy judge in the southern district of 
     Florida--
       (i) occurring 5 years or more after the respective 1st and 
     2d appointment dates of the bankruptcy judges appointed under 
     paragraph (1)(D); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.
       (E) District of maryland.--The 1st, 2d, and 3d vacancies in 
     the office of bankruptcy judge in the district of Maryland--
       (i) occurring 5 years or more after the respective 1st, 2d, 
     and 3d appointment dates of the bankruptcy judges appointed 
     under paragraph (1)(F); and
       (ii) resulting from the death, retirement, resignation, or 
     removal of a bankruptcy judge;
     shall not be filled.

[[Page 1246]]

       (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.
       (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

[[Page 1247]]

     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.
       (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

[[Page 1248]]

     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 2005, a toll-free telephone number, or provide a toll-
     free telephone number established and maintained by a third 
     party, for use by creditors that are depository institutions 
     (as defined in section 3 of the Federal Deposit Insurance 
     Act), including a Federal credit union or State credit union 
     (as defined in section 101 of the Federal Credit Union Act), 
     with total assets not exceeding $250,000,000. The toll-free 
     telephone number may connect consumers to an automated device 
     through which consumers may obtain information described in 
     subparagraph (A) or (B), as applicable, by inputting 
     information using a touch-tone telephone or similar device, 
     if consumers whose telephones are not equipped to use such 
     automated device are provided the opportunity to be connected 
     to an individual from whom the information described in 
     subparagraph (A) or (B), as applicable, may be obtained. A 
     person that receives a request for information described in 
     subparagraph (A) or (B) from an obligor through the toll-free 
     telephone number disclosed under subparagraph (A) or (B), as 
     applicable, shall disclose in response to such request only 
     the information set forth in the table promulgated by the 
     Board under subparagraph (H)(i). The dollar amount contained 
     in this subclause shall be adjusted according to an indexing 
     mechanism established by the Board.
       ``(II) Not later than 6 months prior to the expiration of 
     the 24-month period referenced in subclause (I), the Board 
     shall submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives a report on the program 
     described in subclause (I).
       ``(G) The Federal Trade Commission shall establish and 
     maintain a toll-free number for the purpose of providing to 
     consumers the information required to be disclosed under 
     subparagraph (C).
       ``(H) The Board shall--
       ``(i) establish a detailed table illustrating the 
     approximate number of months that it would take to repay an 
     outstanding balance if a consumer pays only the required 
     minimum monthly payments and if no other advances are made, 
     which table shall clearly present standardized information to 
     be used to disclose the information required to be disclosed 
     under subparagraph (A), (B), or (C), as applicable;
       ``(ii) establish the table required under clause (i) by 
     assuming--
       ``(I) a significant number of different annual percentage 
     rates;
       ``(II) a significant number of different account balances;
       ``(III) a significant number of different minimum payment 
     amounts; and
       ``(IV) that only minimum monthly payments are made and no 
     additional extensions of credit are obtained; and
       ``(iii) promulgate regulations that provide instructional 
     guidance regarding the manner in which the information 
     contained in the table established under clause (i) should be 
     used in responding to the request of an obligor for any 
     information required to be disclosed under subparagraph (A), 
     (B), or (C).
       ``(I) The disclosure requirements of this paragraph do not 
     apply to any charge card account, the primary purpose of 
     which is to require payment of charges in full each month.
       ``(J) A creditor that maintains a toll-free telephone 
     number for the purpose of providing customers with the actual 
     number of months that it will take to repay the customer's 
     outstanding balance is not subject to the requirements of 
     subparagraph (A) or (B).
       ``(K) A creditor that maintains a toll-free telephone 
     number for the purpose of providing customers with the actual 
     number of months that it will take to repay an outstanding 
     balance shall include the following statement on each billing 
     statement: `Making only the minimum payment will increase the 
     interest you pay and the time it takes to repay your balance. 
     For more information, call this toll-free number: ____.' (the 
     blank space to be filled in by the creditor).''.
       (b) Regulatory Implementation.--
       (1) In general.--The Board of Governors of the Federal 
     Reserve System (hereafter in this title referred to as the 
     ``Board'') shall promulgate regulations implementing the 
     requirements of section 127(b)(11) of the Truth in Lending 
     Act, as added by subsection (a) of this section.
       (2) Effective date.--Section 127(b)(11) of the Truth in 
     Lending Act, as added by subsection (a) of this section, and 
     the regulations issued under paragraph (1) of this subsection 
     shall not take effect until the later of--
       (A) 18 months after the date of enactment of this Act; or
       (B) 12 months after the publication of such final 
     regulations by the Board.
       (c) Study of Financial Disclosures.--
       (1) In general.--The Board may conduct a study to determine 
     the types of information available to potential borrowers 
     from consumer credit lending institutions regarding factors 
     qualifying potential borrowers for credit, repayment 
     requirements, and the consequences of default.
       (2) Factors for consideration.--In conducting a study under 
     paragraph (1), the Board should, in consultation with the 
     other Federal banking agencies (as defined in section 3 of 
     the Federal Deposit Insurance Act), the National Credit Union 
     Administration, and the Federal Trade Commission, consider 
     the extent to which--
       (A) consumers, in establishing new credit arrangements, are 
     aware of their existing payment obligations, the need to 
     consider those obligations in deciding to take on new credit, 
     and how taking on excessive credit can result in financial 
     difficulty;
       (B) minimum periodic payment features offered in connection 
     with open end credit plans impact consumer default rates;
       (C) consumers make only the required minimum payment under 
     open end credit plans;
       (D) consumers are aware that making only required minimum 
     payments will increase the cost and repayment period of an 
     open end credit obligation; and
       (E) the availability of low minimum payment options is a 
     cause of consumers experiencing financial difficulty.
       (3) Report to congress.--Findings of the Board in 
     connection with any study conducted under this subsection 
     shall be submitted to Congress. Such report shall also 
     include recommendations for legislative initiatives, if any, 
     of the Board, based on its findings.

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

       (a) Open End Credit Extensions.--
       (1) Credit applications.--Section 127A(a)(13) of the Truth 
     in Lending Act (15 U.S.C. 1637a(a)(13)) is amended--
       (A) by striking ``consultation of tax adviser.--A statement 
     that the'' and inserting the following: ``tax 
     deductibility.--A statement that--
       ``(A) the''; and
       (B) by striking the period at the end and inserting the 
     following: ``; and
       ``(B) in any case in which the extension of credit exceeds 
     the fair market value (as defined under the Internal Revenue 
     Code of 1986) of the dwelling, the interest on the portion of 
     the credit extension that is greater than the fair market 
     value of the dwelling is not tax deductible for Federal 
     income tax purposes.''.
       (2) Credit advertisements.--Section 147(b) of the Truth in 
     Lending Act (15 U.S.C. 1665b(b)) is amended--
       (A) by striking ``If any'' and inserting the following:
       ``(1) In general.--If any''; and
       (B) by adding at the end the following:
       ``(2) Credit in excess of fair market value.--Each 
     advertisement described in subsection (a) that relates to an 
     extension of credit that may exceed the fair market value of 
     the dwelling, and which advertisement is disseminated in 
     paper form to the public or through the Internet, as opposed 
     to by radio or television, shall include a clear and 
     conspicuous statement that--

[[Page 1249]]

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

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

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

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

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

     SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.

       (a) Internet-Based 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.''.

[[Page 1250]]

       (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--PREVENTING CORPORATE BANKRUPTCY ABUSE

     SEC. 1401. EMPLOYEE WAGE AND BENEFIT PRIORITIES.

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

     SEC. 1402. FRAUDULENT TRANSFERS AND OBLIGATIONS.

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

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

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

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

     SEC. 1404. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

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

      TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

     SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as otherwise provided in this 
     Act, this Act and the amendments made by this Act shall take 
     effect 180 days after the date of enactment of this Act.
       (b) Application of Amendments.--
       (1) In general.--Except as otherwise provided in this Act 
     and paragraph (2), the amendments made by this Act shall not 
     apply with respect to cases commenced under title 11, United 
     States Code, before the effective date of this Act.
       (2) Certain limitations applicable to debtors.--The 
     amendments made by sections 308, 322, and 330 shall apply 
     with respect to cases commenced under title 11, United States 
     Code, on or after the date of the enactment of this Act.

     SEC. 1502. TECHNICAL CORRECTIONS.

       (a) Conforming Amendments to Title 11 of the United States 
     Code.--Title 11 of the United States Code, as amended by the 
     preceding provisions of this Act, is amended--
       (1) in section 507--
       (A) in subsection (a)--
       (i) in paragraph (5)(B)(ii) by striking ``paragraph (3)'' 
     and inserting ``paragraph (4)''; and
       (ii) in paragraph (8)(D) by striking ``paragraph (3)'' and 
     inserting ``paragraph (4)'';
       (B) in subsection (b) by striking ``subsection (a)(1)'' and 
     inserting ``subsection (a)(2)''; and
       (C) in subsection (d) by striking ``subsection (a)(3)'' and 
     inserting ``subsection (a)(1)'';
       (2) in section 523(a)(1)(A) by striking ``507(a)(2)'' and 
     inserting ``507(a)(3)'';
       (3) in section 752(a) by striking ``507(a)(1)'' and 
     inserting ``507(a)(2)'';
       (4) in section 766--

[[Page 1251]]

       (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)''.

                          ____________________