[House Report 108-42]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-42
======================================================================
PROVIDING FOR CONSIDERATION OF H.R. 975, THE BANKRUPTCY ABUSE
PREVENTION AND CONSUMER PROTECTION ACT OF 2003
_______
March 18, 2003.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Sessions, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 147]
The Committee on Rules, having had under consideration
House Resolution 147, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of H.R. 975, the
Bankruptcy Abuse Prevention and Consumer Protection Act of
2003, under a structured rule. The rule provides one hour of
general debate, equally divided and controlled by the Chairman
and ranking minority member of the Committee on the Judiciary.
The rule makes in order the amendment in the nature of a
substitute recommended by the Committee on the Judiciary now
printed in the bill as an original bill for the purpose of
amendment, which shall be considered as read.
The rule makes in order only those amendments printed in
this report, and it provides that the amendments made in order
may be offered only in the order printed in this report, may be
offered only by a Member designated in this report, shall be
considered as read, shall be debatable for the time specified
in this report equally divided and controlled by the proponent
and an opponent, shall not be subject to amendment, and shall
not be subject to a demand for a division of the question in
the House or in the Committee of the Whole. The rule waives all
points of order against the amendments printed in this report
and provides one motion to recommit with or without
instructions.
The waiver of all points of order against consideration of
the bill in the rule includes a waiver of clause 4(a) of rule
XIII (requiring a three-day layover of the committee report),
which is necessary because the committee report was not filed
until Tuesday, March 18, and the bill may be considered by the
House as early as Wednesday, March 19, 2003.
COMMITTEE VOTES
Pursuant to clause 3(b) of House rule XIII the results of
each record vote on an amendment or motion to report, together
with the names of those voting for and against, are printed
below:
Rules Committee record vote No. 38
Date: March 18, 2003.
Measure: H.R. 975--Bankruptcy Abuse Prevention and Consumer
Protection Act of 2003.
Motion by: Mr. Frost.
Summary of motion: To grant an open rule.
Results: Defeated 3 to 9.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay;
Reynolds--Nay; Frost--Yea; McGovern--Yea; Hastings (FL)--Yea;
Dreier--Nay.
Rules Committee record vote No. 39
Date: March 18, 2003.
Measure: H.R. 975--Bankruptcy Abuse Prevention and Consumer
Protection Act of 2003.
Motion by: Mr. Hastings of Florida.
Summary of motion: To make in order the amendment offered
by Representatives Conyers, Slaughter, and Jackson Lee which
allows the court to waive provisions of new cram down, luxury,
ATM, and credit cards used to pay taxes, in any case in which
the court determines it would impair the debtors ability to pay
domestic support obligations.
Results: Defeated 3 to 9.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay;
Reynolds--Nay; Frost--Yea; McGovern--Yea; Hastings (FL)--Yea;
Dreier--Nay.
SUMMARY OF AMENDMENTS MADE IN ORDER UNDER THE RULE
(Summaries derived from information provided by sponsors.)
1. Toomey/Sherman--Redrafts Title IX so that the same
provisions in Title IX are applicable to both the bank and
credit union federal regulators that must manage these matters
should a problem occur. (10 minutes)
2. Gutierrez--Provides that upon enactment, Section 1234
applies both prospectively and to involuntary cases now pending
in the bankruptcy courts. (10 minutes)
3. Cannon/Delahunt--(1) Increases the monetary cap on wage
and employee benefit claims entitled to priority under the
Bankruptcy Code from $4,650 to $10,000 and lengthens the
reachback period for wage claims from 90 days to 180 days; (2)
increases the reachback period during which fraudulent
transfers can be rescinded from one to two years and provides
that certain compensation payments (e.g. bonuses) to a
corporation's insiders during this two-year reachback period
can be rescinded, under certain circumstances; and (3) requires
the court to reinstate retiree benefits that a corporate debtor
modified within the 180-day period preceding the bankruptcy
filing, unless the balance of the equities justifies the
modification. (10 minutes)
4. Sherman--Requires corporations filing for bankruptcy to
file their case in the district court of the district in which
the corporation's principal place of business in the United
States is located. For cases in which the debtor is an
affiliate, the bankruptcy case may be filed in the district in
which the principal place of business of the affiliate with the
greatest assets in the United States is located. (10 minutes)
5. Conyers--Amendment in the Nature of a Substitute.
Modifies the means test and requires the court, in considering
a motion to dismiss or convert a ch. 7 case, to take into
account the debtor's actual reasonable and necessary expenses
and income, and determine whether the debtor can repay 30% of
unsecured debt. Protects child and spousal support obligations
by limiting the ability of creditors to deprive debtors of the
right to a fresh start and emerge from bankruptcy able to pay
their obligations to their children. Modifies changes to ch. 13
to make it more workable and increase the likelihood that
debtors who choose ch. 13 will succeed. Makes restrictions on
automobile cram-down more workable (1-year instead of 2-year
lookback) and other personalty (6-month instead of 1-year
lookback). Prevents debtors from using bankruptcy court to
evade lawful debts for certain criminal civil rights
violations. Provides enhanced protection for employee benefits,
ensures fairness for employees, and provides a remedy for
corporate wrongdoing in ch. 11. Provides bankruptcy courts with
flexibility to protect small businesses from premature or
unnecessary liquidation if they are able to reorganize
successfully. Closes loophole in current law by preventing
debtors from taking cases to courts far away from where the
business is actually conducted. Protects the right of debtors
to uphold contracts in bankruptcy. Provides for additional
bankruptcy judges according to the most recent needs assessment
by the Judicial Conference. Strikes pro-IRS amendments that
would elevate the rights of taxing authorities over other
creditors and debtors. Provides for enhanced disclosure on
credit card statements to help consumers understand the cost to
repay balances using their actual debts. Protects against
corruption in bankruptcy proceedings by deleting amendments
that would allow for abusive motions, allow for conflicts of
interest on the part of investment bankers, and allow
bankruptcy professionals to evade accountability in court for
their wrongdoing. (40 minutes)
TEXT OF AMENDMENTS MADE IN ORDER
1. An Amendment To Be Offered by Representative Toomey of Pennsylvania,
or His Designee, Debatable for 10 Minutes
Strike section 901 of the bill, as reported, and all that
follows through section 905 and insert the following new
sections:
SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS
OF INSURED DEPOSITORY INSTITUTIONS.
(a) Definition of Qualified Financial Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)) is amended--
(A) by striking ``subsection--'' and
inserting ``subsection, the following
definitions shall apply:''; and
(B) in clause (i), by inserting ``,
resolution, or order'' after ``any similar
agreement that the Corporation determines by
regulation''.
(2) Insured credit unions.--Section 207(c)(8)(D) of
the Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D))
is amended--
(A) by striking ``subsection--'' and
inserting ``subsection, the following
definitions shall apply:''; and
(B) in clause (i), by inserting ``,
resolution, or order'' after ``any similar
agreement that the Board determines by
regulation''.
(b) Definition of Securities Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(ii) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as
follows:
``(ii) Securities contract.--The term
`securities contract'--
``(I) means a contract for
the purchase, sale, or loan of
a security, a certificate of
deposit, a mortgage loan, or
any interest in a mortgage
loan, a group or index of
securities, certificates of
deposit, or mortgage loans or
interests therein (including
any interest therein or based
on the value thereof) or any
option on any of the foregoing,
including any option to
purchase or sell any such
security, certificate of
deposit, mortgage loan,
interest, group or index, or
option, and including any
repurchase or reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(II) does not include any
purchase, sale, or repurchase
obligation under a
participation in a commercial
mortgage loan unless the
Corporation determines by
regulation, resolution, or
order to include any such
agreement within the meaning of
such term;
``(III) means any option
entered into on a national
securities exchange relating to
foreign currencies;
``(IV) means the guarantee by
or to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
certificates of deposit, or
mortgage loans or interests
therein (including any interest
therein or based on the value
thereof) or option on any of
the foregoing, including any
option to purchase or sell any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(V) means any margin loan;
``(VI) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
``(VII) means any combination
of the agreements or
transactions referred to in
this clause;
``(VIII) means any option to
enter into any agreement or
transaction referred to in this
clause;
``(IX) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
or (VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
securities contract under this
clause, except that the master
agreement shall be considered
to be a securities contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (III), (IV),
(V), (VI), (VII), or (VIII);
and
``(X) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause, including any guarantee
or reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(ii)
of the Federal Credit Union Act (12 U.S.C.
1787(c)(8)(D)(ii)) is amended to read as follows:
``(ii) Securities contract.--The term
`securities contract'--
``(I) means a contract for
the purchase, sale, or loan of
a security, a certificate of
deposit, a mortgage loan, or
any interest in a mortgage
loan, a group or index of
securities, certificates of
deposit, or mortgage loans or
interests therein (including
any interest therein or based
on the value thereof) or any
option on any of the foregoing,
including any option to
purchase or sell any such
security, certificate of
deposit, mortgage loan,
interest, group or index, or
option, and including any
repurchase or reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(II) does not include any
purchase, sale, or repurchase
obligation under a
participation in a commercial
mortgage loan unless the Board
determines by regulation,
resolution, or order to include
any such agreement within the
meaning of such term;
``(III) means any option
entered into on a national
securities exchange relating to
foreign currencies;
``(IV) means the guarantee by
or to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
certificates of deposit, or
mortgage loans or interests
therein (including any interest
therein or based on the value
thereof) or option on any of
the foregoing, including any
option to purchase or sell any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(V) means any margin loan;
``(VI) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
``(VII) means any combination
of the agreements or
transactions referred to in
this clause;
``(VIII) means any option to
enter into any agreement or
transaction referred to in this
clause;
``(IX) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
or (VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
securities contract under this
clause, except that the master
agreement shall be considered
to be a securities contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (III), (IV),
(V), (VI), (VII), or (VIII);
and
``(X) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause, including any guarantee
or reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.''.
(c) Definition of Commodity Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(iii) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as
follows:
``(iii) Commodity contract.--The term
`commodity contract' means--
``(I) with respect to a
futures commission merchant, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade;
``(II) with respect to a
foreign futures commission
merchant, a foreign future;
``(III) with respect to a
leverage transaction merchant,
a leverage transaction;
``(IV) with respect to a
clearing organization, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing organization,
or commodity option traded on,
or subject to the rules of, a
contract market or board of
trade that is cleared by such
clearing organization;
``(V) with respect to a
commodity options dealer, a
commodity option;
``(VI) any other agreement or
transaction that is similar to
any agreement or transaction
referred to in this clause;
``(VII) any combination of
the agreements or transactions
referred to in this clause;
``(VIII) any option to enter
into any agreement or
transaction referred to in this
clause;
``(IX) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII); or
``(X) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(iii)
of the Federal Credit Union Act (12 U.S.C.
1787(c)(8)(D)(iii)) is amended to read as follows:
``(iii) Commodity contract.--The term
`commodity contract' means--
``(I) with respect to a
futures commission merchant, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade;
``(II) with respect to a
foreign futures commission
merchant, a foreign future;
``(III) with respect to a
leverage transaction merchant,
a leverage transaction;
``(IV) with respect to a
clearing organization, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing organization,
or commodity option traded on,
or subject to the rules of, a
contract market or board of
trade that is cleared by such
clearing organization;
``(V) with respect to a
commodity options dealer, a
commodity option;
``(VI) any other agreement or
transaction that is similar to
any agreement or transaction
referred to in this clause;
``(VII) any combination of
the agreements or transactions
referred to in this clause;
``(VIII) any option to enter
into any agreement or
transaction referred to in this
clause;
``(IX) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII); or
``(X) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.''.
(d) Definition of Forward Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(iv)) is amended to read as
follows:
``(iv) Forward contract.--The term
`forward contract' means--
``(I) a contract (other than
a commodity contract) for the
purchase, sale, or transfer of
a commodity or any similar
good, article, service, right,
or interest which is presently
or in the future becomes the
subject of dealing in the
forward contract trade, or
product or byproduct thereof,
with a maturity date more than
2 days after the date the
contract is entered into,
including, a repurchase
transaction, reverse repurchase
transaction, consignment,
lease, swap, hedge transaction,
deposit, loan, option,
allocated transaction,
unallocated transaction, or any
other similar agreement;
``(II) any combination of
agreements or transactions
referred to in subclauses (I)
and (III);
``(III) any option to enter
into any agreement or
transaction referred to in
subclause (I) or (II);
``(IV) a master agreement
that provides for an agreement
or transaction referred to in
subclauses (I), (II), or (III),
together with all supplements
to any such master agreement,
without regard to whether the
master agreement provides for
an agreement or transaction
that is not a forward contract
under this clause, except that
the master agreement shall be
considered to be a forward
contract under this clause only
with respect to each agreement
or transaction under the master
agreement that is referred to
in subclause (I), (II), or
(III); or
``(V) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in subclause (I),
(II), (III), or (IV), including
any guarantee or reimbursement
obligation in connection with
any agreement or transaction
referred to in any such
subclause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(iv)
of the Federal Credit Union Act (12 U.S.C.
1787(c)(8)(D)(iv)) is amended to read as follows:
``(iv) Forward contract.--The term
`forward contract' means--
``(I) a contract (other than
a commodity contract) for the
purchase, sale, or transfer of
a commodity or any similar
good, article, service, right,
or interest which is presently
or in the future becomes the
subject of dealing in the
forward contract trade, or
product or byproduct thereof,
with a maturity date more than
2 days after the date the
contract is entered into,
including, a repurchase
transaction, reverse repurchase
transaction, consignment,
lease, swap, hedge transaction,
deposit, loan, option,
allocated transaction,
unallocated transaction, or any
other similar agreement;
``(II) any combination of
agreements or transactions
referred to in subclauses (I)
and (III);
``(III) any option to enter
into any agreement or
transaction referred to in
subclause (I) or (II);
``(IV) a master agreement
that provides for an agreement
or transaction referred to in
subclauses (I), (II), or (III),
together with all supplements
to any such master agreement,
without regard to whether the
master agreement provides for
an agreement or transaction
that is not a forward contract
under this clause, except that
the master agreement shall be
considered to be a forward
contract under this clause only
with respect to each agreement
or transaction under the master
agreement that is referred to
in subclause (I), (II), or
(III); or
``(V) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in subclause (I),
(II), (III), or (IV), including
any guarantee or reimbursement
obligation in connection with
any agreement or transaction
referred to in any such
subclause.''.
(e) Definition of Repurchase Agreement.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(v)) is amended to read as follows:
``(v) Repurchase agreement.--The term
`repurchase agreement' (which
definition also applies to a reverse
repurchase agreement)--
``(I) means an agreement,
including related terms, which
provides for the transfer of
one or more certificates of
deposit, mortgage-related
securities (as such term is
defined in the Securities
Exchange Act of 1934), mortgage
loans, interests in mortgage-
related securities or mortgage
loans, eligible bankers'
acceptances, qualified foreign
government securities or
securities that are direct
obligations of, or that are
fully guaranteed by, the United
States or any agency of the
United States against the
transfer of funds by the
transferee of such certificates
of deposit, eligible bankers'
acceptances, securities,
mortgage loans, or interests
with a simultaneous agreement
by such transferee to transfer
to the transferor thereof
certificates of deposit,
eligible bankers' acceptances,
securities, mortgage loans, or
interests as described above,
at a date certain not later
than 1 year after such
transfers or on demand, against
the transfer of funds, or any
other similar agreement;
``(II) does not include any
repurchase obligation under a
participation in a commercial
mortgage loan unless the
Corporation determines by
regulation, resolution, or
order to include any such
participation within the
meaning of such term;
``(III) means any combination
of agreements or transactions
referred to in subclauses (I)
and (IV);
``(IV) means any option to
enter into any agreement or
transaction referred to in
subclause (I) or (III);
``(V) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), or (IV), together with
all supplements to any such
master agreement, without
regard to whether the master
agreement provides for an
agreement or transaction that
is not a repurchase agreement
under this clause, except that
the master agreement shall be
considered to be a repurchase
agreement under this subclause
only with respect to each
agreement or transaction under
the master agreement that is
referred to in subclause (I),
(III), or (IV); and
``(VI) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in
subclause (I), (III), (IV), or
(V), including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
For purposes of this clause, the term
`qualified foreign government security'
means a security that is a direct
obligation of, or that is fully
guaranteed by, the central government
of a member of the Organization for
Economic Cooperation and Development
(as determined by regulation or order
adopted by the appropriate Federal
banking authority).''.
(2) Insured credit unions.--Section 207(c)(8)(D)(v)
of the Federal Credit Union Act (12 U.S.C.
1787(c)(8)(D)(v)) is amended to read as follows:
``(v) Repurchase agreement.--The term
`repurchase agreement' (which
definition also applies to a reverse
repurchase agreement)--
``(I) means an agreement,
including related terms, which
provides for the transfer of
one or more certificates of
deposit, mortgage-related
securities (as such term is
defined in the Securities
Exchange Act of 1934), mortgage
loans, interests in mortgage-
related securities or mortgage
loans, eligible bankers'
acceptances, qualified foreign
government securities or
securities that are direct
obligations of, or that are
fully guaranteed by, the United
States or any agency of the
United States against the
transfer of funds by the
transferee of such certificates
of deposit, eligible bankers'
acceptances, securities,
mortgage loans, or interests
with a simultaneous agreement
by such transferee to transfer
to the transferor thereof
certificates of deposit,
eligible bankers' acceptances,
securities, mortgage loans, or
interests as described above,
at a date certain not later
than 1 year after such
transfers or on demand, against
the transfer of funds, or any
other similar agreement;
``(II) does not include any
repurchase obligation under a
participation in a commercial
mortgage loan unless the Board
determines by regulation,
resolution, or order to include
any such participation within
the meaning of such term;
``(III) means any combination
of agreements or transactions
referred to in subclauses (I)
and (IV);
``(IV) means any option to
enter into any agreement or
transaction referred to in
subclause (I) or (III);
``(V) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), or (IV), together with
all supplements to any such
master agreement, without
regard to whether the master
agreement provides for an
agreement or transaction that
is not a repurchase agreement
under this clause, except that
the master agreement shall be
considered to be a repurchase
agreement under this subclause
only with respect to each
agreement or transaction under
the master agreement that is
referred to in subclause (I),
(III), or (IV); and
``(VI) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in
subclause (I), (III), (IV), or
(V), including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
For purposes of this clause, the term
`qualified foreign government security'
means a security that is a direct
obligation of, or that is fully
guaranteed by, the central government
of a member of the Organization for
Economic Cooperation and Development
(as determined by regulation or order
adopted by the appropriate Federal
banking authority).''.
(f) Definition of Swap Agreement.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(vi) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(vi)) is amended to read as
follows:
``(vi) Swap agreement.--The term
`swap agreement' means--
``(I) any agreement,
including the terms and
conditions incorporated by
reference in any such
agreement, which is an interest
rate swap, option, future, or
forward agreement, including a
rate floor, rate cap, rate
collar, cross-currency rate
swap, and basis swap; a spot,
same day-tomorrow, tomorrow-
next, forward, or other foreign
exchange or precious metals
agreement; a currency swap,
option, future, or forward
agreement; an equity index or
equity swap, option, future, or
forward agreement; a debt index
or debt swap, option, future,
or forward agreement; a total
return, credit spread or credit
swap, option, future, or
forward agreement; a commodity
index or commodity swap,
option, future, or forward
agreement; or a weather swap,
weather derivative, or weather
option;
``(II) any agreement or
transaction that is similar to
any other agreement or
transaction referred to in this
clause and that is of a type
that has been, is presently, or
in the future becomes, the
subject of recurrent dealings
in the swap markets (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, future, or
option on one or more rates,
currencies, commodities, equity
securities or other equity
instruments, debt securities or
other debt instruments,
quantitative measures
associated with an occurrence,
extent of an occurrence, or
contingency associated with a
financial, commercial, or
economic consequence, or
economic or financial indices
or measures of economic or
financial risk or value;
``(III) any combination of
agreements or transactions
referred to in this clause;
``(IV) any option to enter
into any agreement or
transaction referred to in this
clause;
``(V) a master agreement that
provides for an agreement or
transaction referred to in
subclause (I), (II), (III), or
(IV), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
contains an agreement or
transaction that is not a swap
agreement under this clause,
except that the master
agreement shall be considered
to be a swap agreement under
this clause only with respect
to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
or (IV); and
``(VI) any security agreement
or arrangement or other credit
enhancement related to any
agreements or transactions
referred to in subclause (I),
(II), (III), (IV), or (V),
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
Such term is applicable for purposes of
this subsection only and shall not be
construed or applied so as to challenge
or affect the characterization,
definition, or treatment of any swap
agreement under any other statute,
regulation, or rule, including the
Securities Act of 1933, the Securities
Exchange Act of 1934, the Public
Utility Holding Company Act of 1935,
the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the
Investment Advisers Act of 1940, the
Securities Investor Protection Act of
1970, the Commodity Exchange Act, the
Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of
2000.''.
(2) Insured credit unions.--Section 207(c)(8)(D) of
the Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D))
is amended by adding at the end the following new
clause:
``(vi) Swap agreement.--The term
`swap agreement' means--
``(I) any agreement,
including the terms and
conditions incorporated by
reference in any such
agreement, which is an interest
rate swap, option, future, or
forward agreement, including a
rate floor, rate cap, rate
collar, cross-currency rate
swap, and basis swap; a spot,
same day-tomorrow, tomorrow-
next, forward, or other foreign
exchange or precious metals
agreement; a currency swap,
option, future, or forward
agreement; an equity index or
equity swap, option, future, or
forward agreement; a debt index
or debt swap, option, future,
or forward agreement; a total
return, credit spread or credit
swap, option, future, or
forward agreement; a commodity
index or commodity swap,
option, future, or forward
agreement; or a weather swap,
weather derivative, or weather
option;
``(II) any agreement or
transaction that is similar to
any other agreement or
transaction referred to in this
clause and that is of a type
that has been, is presently, or
in the future becomes, the
subject of recurrent dealings
in the swap markets (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, future, or
option on one or more rates,
currencies, commodities, equity
securities or other equity
instruments, debt securities or
other debt instruments,
quantitative measures
associated with an occurrence,
extent of an occurrence, or
contingency associated with a
financial, commercial, or
economic consequence, or
economic or financial indices
or measures of economic or
financial risk or value;
``(III) any combination of
agreements or transactions
referred to in this clause;
``(IV) any option to enter
into any agreement or
transaction referred to in this
clause;
``(V) a master agreement that
provides for an agreement or
transaction referred to in
subclause (I), (II), (III), or
(IV), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
contains an agreement or
transaction that is not a swap
agreement under this clause,
except that the master
agreement shall be considered
to be a swap agreement under
this clause only with respect
to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
or (IV); and
``(VI) any security agreement
or arrangement or other credit
enhancement related to any
agreements or transactions
referred to in subclause (I),
(II), (III), (IV), or (V),
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
Such term is applicable for purposes of
this subsection only and shall not be
construed or applied so as to challenge
or affect the characterization,
definition, or treatment of any swap
agreement under any other statute,
regulation, or rule, including the
Securities Act of 1933, the Securities
Exchange Act of 1934, the Public
Utility Holding Company Act of 1935,
the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the
Investment Advisers Act of 1940, the
Securities Investor Protection Act of
1970, the Commodity Exchange Act, the
Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of
2000.''.
(g) Definition of Transfer.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(viii) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(viii)) is amended to read as
follows:
``(viii) Transfer.--The term
`transfer' means every mode, direct or
indirect, absolute or conditional,
voluntary or involuntary, of disposing
of or parting with property or with an
interest in property, including
retention of title as a security
interest and foreclosure of the
depository institution's equity of
redemption.''.
(2) Insured credit unions.--Section 207(c)(8)(D) of
the Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D))
(as amended by subsection (f) of this section) is
amended by adding at the end the following new clause:
``(viii) Transfer.--The term
`transfer' means every mode, direct or
indirect, absolute or conditional,
voluntary or involuntary, of disposing
of or parting with property or with an
interest in property, including
retention of title as a security
interest and foreclosure of the
depository institution's equity of
redemption.''.
(h) Treatment of Qualified Financial Contracts.--
(1) FDIC-insured depository institutions.--Section
11(e)(8) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)) is amended--
(A) in subparagraph (A)--
(i) by striking ``paragraph (10)''
and inserting ``paragraphs (9) and
(10)'';
(ii) in clause (i), by striking ``to
cause the termination or liquidation''
and inserting ``such person has to
cause the termination, liquidation, or
acceleration''; and
(iii) by striking clause (ii) and
inserting the following new clause:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to one or
more qualified financial contracts
described in clause (i);''; and
(B) in subparagraph (E), by striking clause
(ii) and inserting the following:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to one or
more qualified financial contracts
described in clause (i);''.
(2) Insured credit unions.--Section 207(c)(8) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is
amended--
(A) in subparagraph (A)--
(i) by striking ``paragraph (12)''
and inserting ``paragraphs (9) and
(10)'';
(ii) in clause (i), by striking ``to
cause the termination or liquidation''
and inserting ``such person has to
cause the termination, liquidation, or
acceleration''; and
(iii) by striking clause (ii) and
inserting the following new clause:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to 1 or more
qualified financial contracts described
in clause (i);''; and
(B) in subparagraph (E), by striking clause
(ii) and inserting the following new clause:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to 1 or more
qualified financial contracts described
in clause (i);''.
(i) Avoidance of Transfers.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(C)(i)) is amended by inserting
``section 5242 of the Revised Statutes of the United
States or any other Federal or State law relating to
the avoidance of preferential or fraudulent
transfers,'' before ``the Corporation''.
(2) Insured credit unions.--Section 207(c)(8)(C)(i)
of the Federal Credit Union Act (12 U.S.C.
1787(c)(8)(C)(i)) is amended by inserting ``section
5242 of the Revised Statutes of the United States or
any other Federal or State law relating to the
avoidance of preferential or fraudulent transfers,''
before ``the Board''.
SEC. 902. AUTHORITY OF THE FDIC AND NCUAB WITH RESPECT TO FAILED AND
FAILING INSTITUTIONS.
(a) Federal Deposit Insurance Corporation.--
(1) In general.--Section 11(e)(8) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is
amended--
(A) in subparagraph (E), by striking ``other
than paragraph (12) of this subsection,
subsection (d)(9)'' and inserting ``other than
subsections (d)(9) and (e)(10)''; and
(B) by adding at the end the following new
subparagraphs:
``(F) Clarification.--No provision of law
shall be construed as limiting the right or
power of the Corporation, or authorizing any
court or agency to limit or delay, in any
manner, the right or power of the Corporation
to transfer any qualified financial contract in
accordance with paragraphs (9) and (10) of this
subsection or to disaffirm or repudiate any
such contract in accordance with subsection
(e)(1) of this section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, no walkaway
clause shall be enforceable in a
qualified financial contract of an
insured depository institution in
default.
``(ii) Walkaway clause defined.--For
purposes of this subparagraph, the term
`walkaway clause' means a provision in
a qualified financial contract that,
after calculation of a value of a
party's position or an amount due to or
from 1 of the parties in accordance
with its terms upon termination,
liquidation, or acceleration of the
qualified financial contract, either
does not create a payment obligation of
a party or extinguishes a payment
obligation of a party in whole or in
part solely because of such party's
status as a nondefaulting party.''.
(2) Technical and conforming amendment.--Section
11(e)(12)(A) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(12)(A)) is amended by inserting ``or the
exercise of rights or powers by'' after ``the
appointment of''.
(b) National Credit Union Administration Board.--
(1) In general.--Section 207(c)(8) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(8)) is amended--
(A) in subparagraph (E) (as amended by
section 901(h)), by striking ``other than
paragraph (12) of this subsection, subsection
(b)(9)'' and inserting ``other than subsections
(b)(9) and (c)(10)''; and
(B) by adding at the end the following new
subparagraphs:
``(F) Clarification.--No provision of law
shall be construed as limiting the right or
power of the Board, or authorizing any court or
agency to limit or delay, in any manner, the
right or power of the Board to transfer any
qualified financial contract in accordance with
paragraphs (9) and (10) of this subsection or
to disaffirm or repudiate any such contract in
accordance with subsection (c)(1) of this
section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, no walkaway
clause shall be enforceable in a
qualified financial contract of an
insured credit union in default.
``(ii) Walkaway clause defined.--For
purposes of this subparagraph, the term
`walkaway clause' means a provision in
a qualified financial contract that,
after calculation of a value of a
party's position or an amount due to or
from 1 of the parties in accordance
with its terms upon termination,
liquidation, or acceleration of the
qualified financial contract, either
does not create a payment obligation of
a party or extinguishes a payment
obligation of a party in whole or in
part solely because of such party's
status as a nondefaulting party.''.
(2) Technical and conforming amendment.--Section
207(c)(12)(A) of the Federal Credit Union Act (12
U.S.C. 1787(c)(12)(A)) is amended by inserting ``or the
exercise of rights or powers by'' after ``the
appointment of''.
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL
CONTRACTS.
(a) FDIC-Insured Depository Institutions.--
(1) Transfers of Qualified Financial Contracts to
Financial Institutions.--Section 11(e)(9) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(9)) is
amended to read as follows:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer of
assets or liabilities of a depository
institution in default which includes any
qualified financial contract, the conservator
or receiver for such depository institution
shall either--
``(i) transfer to one financial
institution, other than a financial
institution for which a conservator,
receiver, trustee in bankruptcy, or
other legal custodian has been
appointed or which is otherwise the
subject of a bankruptcy or insolvency
proceeding--
``(I) all qualified financial
contracts between any person or
any affiliate of such person
and the depository institution
in default;
``(II) all claims of such
person or any affiliate of such
person against such depository
institution under any such
contract (other than any claim
which, under the terms of any
such contract, is subordinated
to the claims of general
unsecured creditors of such
institution);
``(III) all claims of such
depository institution against
such person or any affiliate of
such person under any such
contract; and
``(IV) all property securing
or any other credit enhancement
for any contract described in
subclause (I) or any claim
described in subclause (II) or
(III) under any such contract;
or
``(ii) transfer none of the qualified
financial contracts, claims, property
or other credit enhancement referred to
in clause (i) (with respect to such
person and any affiliate of such
person).
``(B) Transfer to foreign bank, foreign
financial institution, or branch or agency of a
foreign bank or financial institution.--In
transferring any qualified financial contracts
and related claims and property under
subparagraph (A)(i), the conservator or
receiver for the depository institution shall
not make such transfer to a foreign bank,
financial institution organized under the laws
of a foreign country, or a branch or agency of
a foreign bank or financial institution unless,
under the law applicable to such bank,
financial institution, branch or agency, to the
qualified financial contracts, and to any
netting contract, any security agreement or
arrangement or other credit enhancement related
to one or more qualified financial contracts,
the contractual rights of the parties to such
qualified financial contracts, netting
contracts, security agreements or arrangements,
or other credit enhancements are enforceable
substantially to the same extent as permitted
under this section.
``(C) Transfer of contracts subject to the
rules of a clearing organization.--In the event
that a conservator or receiver transfers any
qualified financial contract and related
claims, property, and credit enhancements
pursuant to subparagraph (A)(i) and such
contract is cleared by or subject to the rules
of a clearing organization, the clearing
organization shall not be required to accept
the transferee as a member by virtue of the
transfer.
``(D) Definitions.--For purposes of this
paragraph, the term `financial institution'
means a broker or dealer, a depository
institution, a futures commission merchant, or
any other institution, as determined by the
Corporation by regulation to be a financial
institution, and the term `clearing
organization' has the same meaning as in
section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991.''.
(2) Notice to qualified financial contract
counterparties.--Section 11(e)(10)(A) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is
amended in the material immediately following clause
(ii) by striking ``the conservator'' and all that
follows through the period and inserting the following:
``the conservator or receiver shall notify any person
who is a party to any such contract of such transfer by
5:00 p.m. (eastern time) on the business day following
the date of the appointment of the receiver in the case
of a receivership, or the business day following such
transfer in the case of a conservatorship.''.
(3) Rights against receiver and conservator and
treatment of bridge banks.--Section 11(e)(10) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10))
is amended--
(A) by redesignating subparagraph (B) as
subparagraph (D); and
(B) by inserting after subparagraph (A) the
following new subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is
a party to a qualified financial
contract with an insured depository
institution may not exercise any right
that such person has to terminate,
liquidate, or net such contract under
paragraph (8)(A) of this subsection or
section 403 or 404 of the Federal
Deposit Insurance Corporation
Improvement Act of 1991, solely by
reason of or incidental to the
appointment of a receiver for the
depository institution (or the
insolvency or financial condition of
the depository institution for which
the receiver has been appointed)--
``(I) until 5:00 p.m.
(eastern time) on the business
day following the date of the
appointment of the receiver; or
``(II) after the person has
received notice that the
contract has been transferred
pursuant to paragraph (9)(A).
``(ii) Conservatorship.--A person who
is a party to a qualified financial
contract with an insured depository
institution may not exercise any right
that such person has to terminate,
liquidate, or net such contract under
paragraph (8)(E) of this subsection or
section 403 or 404 of the Federal
Deposit Insurance Corporation
Improvement Act of 1991, solely by
reason of or incidental to the
appointment of a conservator for the
depository institution (or the
insolvency or financial condition of
the depository institution for which
the conservator has been appointed).
``(iii) Notice.--For purposes of this
paragraph, the Corporation as receiver
or conservator of an insured depository
institution shall be deemed to have
notified a person who is a party to a
qualified financial contract with such
depository institution if the
Corporation has taken steps reasonably
calculated to provide notice to such
person by the time specified in
subparagraph (A).
``(C) Treatment of bridge banks.--The
following institutions shall not be considered
to be a financial institution for which a
conservator, receiver, trustee in bankruptcy,
or other legal custodian has been appointed or
which is otherwise the subject of a bankruptcy
or insolvency proceeding for purposes of
paragraph (9):
``(i) A bridge bank.
``(ii) A depository institution
organized by the Corporation, for which
a conservator is appointed either--
``(I) immediately upon the
organization of the
institution; or
``(II) at the time of a
purchase and assumption
transaction between the
depository institution and the
Corporation as receiver for a
depository institution in
default.''.
(b) Insured Credit Unions.--
(1) Transfers of qualified financial contracts to
financial institutions.--Section 207(c)(9) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(9)) is
amended to read as follows:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer of
assets or liabilities of a credit union in
default which includes any qualified financial
contract, the conservator or liquidating agent
for such credit union shall either--
``(i) transfer to 1 financial
institution, other than a financial
institution for which a conservator,
receiver, trustee in bankruptcy, or
other legal custodian has been
appointed or which is otherwise the
subject of a bankruptcy or insolvency
proceeding--
``(I) all qualified financial
contracts between any person or
any affiliate of such person
and the credit union in
default;
``(II) all claims of such
person or any affiliate of such
person against such credit
union under any such contract
(other than any claim which,
under the terms of any such
contract, is subordinated to
the claims of general unsecured
creditors of such credit
union);
``(III) all claims of such
credit union against such
person or any affiliate of such
person under any such contract;
and
``(IV) all property securing
or any other credit enhancement
for any contract described in
subclause (I) or any claim
described in subclause (II) or
(III) under any such contract;
or
``(ii) transfer none of the qualified
financial contracts, claims, property
or other credit enhancement referred to
in clause (i) (with respect to such
person and any affiliate of such
person).
``(B) Transfer to foreign bank, foreign
financial institution, or branch or agency of a
foreign bank or financial institution.--In
transferring any qualified financial contracts
and related claims and property under
subparagraph (A)(i), the conservator or
liquidating agent for the credit union shall
not make such transfer to a foreign bank,
financial institution organized under the laws
of a foreign country, or a branch or agency of
a foreign bank or financial institution unless,
under the law applicable to such bank,
financial institution, branch or agency, to the
qualified financial contracts, and to any
netting contract, any security agreement or
arrangement or other credit enhancement related
to 1 or more qualified financial contracts, the
contractual rights of the parties to such
qualified financial contracts, netting
contracts, security agreements or arrangements,
or other credit enhancements are enforceable
substantially to the same extent as permitted
under this section.
``(C) Transfer of contracts subject to the
rules of a clearing organization.--In the event
that a conservator or liquidating agent
transfers any qualified financial contract and
related claims, property, and credit
enhancements pursuant to subparagraph (A)(i)
and such contract is cleared by or subject to
the rules of a clearing organization, the
clearing organization shall not be required to
accept the transferee as a member by virtue of
the transfer.
``(D) Definitions.--For purposes of this
paragraph--
``(i) the term `financial
institution' means a broker or dealer,
a depository institution, a futures
commission merchant, a credit union, or
any other institution, as determined by
the Board by regulation to be a
financial institution; and
``(ii) the term `clearing
organization' has the same meaning as
in section 402 of the Federal Deposit
Insurance Corporation Improvement Act
of 1991.''.
(2) Notice to qualified financial contract
counterparties.--Section 207(c)(10)(A) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(10)(A)) is amended
in the material immediately following clause (ii) by
striking ``the conservator'' and all that follows
through the period and inserting the following: ``the
conservator or liquidating agent shall notify any
person who is a party to any such contract of such
transfer by 5:00 p.m. (eastern time) on the business
day following the date of the appointment of the
liquidating agent in the case of a liquidation, or the
business day following such transfer in the case of a
conservatorship.''.
(3) Rights against liquidating agent and conservator
and treatment of bridge banks.--Section 207(c)(10) of
the Federal Credit Union Act (12 U.S.C. 1787(c)(10)) is
amended--
(A) by redesignating subparagraph (B) as
subparagraph (D); and
(B) by inserting after subparagraph (A) the
following new subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Liquidation.--A person who is a
party to a qualified financial contract
with an insured credit union may not
exercise any right that such person has
to terminate, liquidate, or net such
contract under paragraph (8)(A) of this
subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by
reason of or incidental to the
appointment of a liquidating agent for
the credit union institution (or the
insolvency or financial condition of
the credit union for which the
liquidating agent has been appointed)--
``(I) until 5:00 p.m.
(eastern time) on the business
day following the date of the
appointment of the liquidating
agent; or
``(II) after the person has
received notice that the
contract has been transferred
pursuant to paragraph (9)(A).
``(ii) Conservatorship.--A person who
is a party to a qualified financial
contract with an insured credit union
may not exercise any right that such
person has to terminate, liquidate, or
net such contract under paragraph
(8)(E) of this subsection or section
403 or 404 of the Federal Deposit
Insurance Corporation Improvement Act
of 1991, solely by reason of or
incidental to the appointment of a
conservator for the credit union or the
insolvency or financial condition of
the credit union for which the
conservator has been appointed).
``(iii) Notice.--For purposes of this
paragraph, the Board as conservator or
liquidating agent of an insured credit
union shall be deemed to have notified
a person who is a party to a qualified
financial contract with such credit
union if the Board has taken steps
reasonably calculated to provide notice
to such person by the time specified in
subparagraph (A).
``(C) Treatment of bridge banks.--The
following institutions shall not be considered
to be a financial institution for which a
conservator, receiver, trustee in bankruptcy,
or other legal custodian has been appointed or
which is otherwise the subject of a bankruptcy
or insolvency proceeding for purposes of
paragraph (9):
``(i) A bridge bank.
``(ii) A credit union organized by
the Board, for which a conservator is
appointed either--
``(I) immediately upon the
organization of the credit
union; or
``(II) at the time of a
purchase and assumption
transaction between the credit
union and the Board as receiver
for a credit union in
default.''.
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF
QUALIFIED FINANCIAL CONTRACTS.
(a) FDIC-Insured Depository Institutions.--Section 11(e) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)) is
amended--
(1) by redesignating paragraphs (11) through (15) as
paragraphs (12) through (16), respectively;
(2) by inserting after paragraph (10) the following
new paragraph:
``(11) Disaffirmance or repudiation of qualified
financial contracts.--In exercising the rights of
disaffirmance or repudiation of a conservator or
receiver with respect to any qualified financial
contract to which an insured depository institution is
a party, the conservator or receiver for such
institution shall either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate of
such person; and
``(ii) the depository institution in
default; or
``(B) disaffirm or repudiate none of the
qualified financial contracts referred to in
subparagraph (A) (with respect to such person
or any affiliate of such person).''; and
(3) by adding at the end the following new paragraph:
``(17) Savings clause.--The meanings of terms used in
this subsection are applicable for purposes of this
subsection only, and shall not be construed or applied
so as to challenge or affect the characterization,
definition, or treatment of any similar terms under any
other statute, regulation, or rule, including the
Gramm-Leach-Bliley Act, the Legal Certainty for Bank
Products Act of 2000, the securities laws (as that term
is defined in section 3(a)(47) of the Securities
Exchange Act of 1934), and the Commodity Exchange
Act.''.
(b) Insured Credit Unions.--Section 207(c) of the Federal
Credit Union Act (12 U.S.C. 1787(c)) is amended--
(1) by redesignating paragraphs (11), (12), and (13)
as paragraphs (12), (13), and (14), respectively;
(2) by inserting after paragraph (10) the following
new paragraph:
``(11) Disaffirmance or repudiation of qualified
financial contracts.--In exercising the rights of
disaffirmance or repudiation of a conservator or
liquidating agent with respect to any qualified
financial contract to which an insured credit union is
a party, the conservator or liquidating agent for such
credit union shall either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate of
such person; and
``(ii) the credit union in default;
or
``(B) disaffirm or repudiate none of the
qualified financial contracts referred to in
subparagraph (A) (with respect to such person
or any affiliate of such person).''; and
(3) by adding at the end the following new paragraph:
``(15) Savings clause.--The meanings of terms used in
this subsection are applicable for purposes of this
subsection only, and shall not be construed or applied
so as to challenge or affect the characterization,
definition, or treatment of any similar terms under any
other statute, regulation, or rule, including the
Gramm-Leach-Bliley Act, the Legal Certainty for Bank
Products Act of 2000, the securities laws (as that term
is defined in section (a)(47) of the Securities
Exchange Act of 1934), and the Commodity Exchange
Act.''.
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.
(a) FDIC-Insured Depository Institutions.--Section
11(e)(8)(D)(vii) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(vii)) is amended to read as follows:
``(vii) Treatment of master agreement
as one agreement.--Any master agreement
for any contract or agreement described
in any preceding clause of this
subparagraph (or any master agreement
for such master agreement or
agreements), together with all
supplements to such master agreement,
shall be treated as a single agreement
and a single qualified financial
contract. If a master agreement
contains provisions relating to
agreements or transactions that are not
themselves qualified financial
contracts, the master agreement shall
be deemed to be a qualified financial
contract only with respect to those
transactions that are themselves
qualified financial contracts.''.
(b) Insured Credit Unions.--Section 207(c)(8)(D) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended
by inserting after clause (vi) (as added by section 901(f)) the
following new clause:
``(vii) Treatment of master agreement
as one agreement.--Any master agreement
for any contract or agreement described
in any preceding clause of this
subparagraph (or any master agreement
for such master agreement or
agreements), together with all
supplements to such master agreement,
shall be treated as a single agreement
and a single qualified financial
contract. If a master agreement
contains provisions relating to
agreements or transactions that are not
themselves qualified financial
contracts, the master agreement shall
be deemed to be a qualified financial
contract only with respect to those
transactions that are themselves
qualified financial contracts.''.
In the amendment made by section 906(b)(1) of the bill to
section 403(a) of the Federal Deposit Insurance Corporation
Improvement Act of 1991, insert ``, paragraphs (8)(E), (8)(F),
and (10)(B) of section 207(c) of the Federal Credit Union
Act,'' after ``Deposit Insurance Act''.
In the amendment made by section 906(b)(2) of the bill,
adding a new subsection (f) at the end of section 403 of the
Federal Deposit Insurance Corporation Improvement Act of 1991,
insert ``, paragraphs (8)(E), (8)(F), and (10)(B) of section
207(c) of the Federal Credit Union Act,'' after ``Deposit
Insurance Act''.
In the amendment made by section 906(c)(1) of the bill to
section 404(a) of the Federal Deposit Insurance Corporation
Improvement Act of 1991, insert ``, paragraphs (8)(E), (8)(F),
and (10)(B) of section 207(c) of the Federal Credit Union
Act,'' after ``Deposit Insurance Act''.
In the amendment made by section 906(c)(2) of the bill,
adding a new subsection (h) at the end of section 404 of the
Federal Deposit Insurance Corporation Improvement Act of 1991,
insert ``, paragraphs (8)(E), (8)(F), and (10)(B) of section
207(c) of the Federal Credit Union Act,'' after ``Deposit
Insurance Act''.
In the amendment made by section 907(b)(1) of the bill to
section 101(22) of title 11, United States Code, strike ``trust
company, or receiver'' (where such term appears in subparagraph
(A) of the paragraph proposed to be inserted) and insert
``trust company, federally-insured credit union, or receiver,
liquidating agent,''.
In the amendment made by section 907(b)(1) of the bill to
section 101(22) of title 11, United States Code, insert
``liquidating agent,'' after ``receiver,'' (the 2d place such
term appears in subparagraph (A) of the paragraph proposed to
be inserted).
In section 908 of the bill, strike ``Section 11(e)(8)'' and
insert ``(a) FDIC-Insured Depository Institutions.--Section
11(e)(8)''.
Insert the following new subsection at the end of section 908
of the bill:
(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).''.
----------
2. An Amendment To Be Offered by Representative Gutierrez of Illinois,
or His Designee, Debatable for 10 Minutes
Subsection (b) of section 1234 (Involuntary Cases) of H.R.
975 is amended by striking ``shall not apply with respect to
cases commenced under title 11 of the United States Code before
such date'' and inserting ``shall apply with respect to cases
commenced under title 11 of the United States Code before, on,
and after such date'',
----------
3. An Amendment To Be Offered by Representative Cannon of Utah, or His
Designee, Debatable for 10 Minutes
Add at the end the following:
TITLE ____--PREVENTING CORPORATE BANKRUPTCY ABUSE
SEC. ____01. EMPLOYEE WAGE AND BENEFIT PRIORITIES.
Section 507(a) of title 11, United States Code, is amended--
(1) in paragraph (3) by striking ``90'' and inserting
``180'', and
(2) in paragraphs (3) and (4) by striking ``$4,000''
and inserting ``$10,000''.
SEC. ____02. 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. ____03. 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. ____04. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b),
this Act and the amendments made by this Act shall take effect
on the date of the enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as provided in paragraph (2),
the amendments made by this Act shall apply only with
respect to cases commenced under title 11 of the United
States Code on or after the date of the enactment of
this Act.
(2) Avoidance period.--The amendment made by section
3(1) shall apply only with respect to cases commenced
under title 11 of the United States Code more than 1
year after the date of the enactment of this Act.
----------
4. An Amendment To Be Offered by Representative Sherman of California,
or His Designee, Debatable for 10 Minutes
Add at the end of the following:
TITLE ____--
SEC. ____. LOCAL FILING OF BANKRUPTCY CASES.
(a) Venue of Cases Under Title 11.--Section 1408 of title 28,
United States Code, is amended--
(1) by striking ``Except'' and inserting the
following:
``(a) Except'';
(2) in paragraph (2), by inserting ``as defined in
section 101(2)(A) of title 11'' after ``affiliate'';
and
(3) by adding at the end the following:
``(b) For purposes of subsection (a)--
``(1) if the debtor is a corporation, the domicile
and residence of the debtor are conclusively presumed
to be where the debtor's principal place of business in
the United States is located; and
``(2) if an affiliate, as defined in section
101(2)(A) of title 11, is not a debtor in a case under
title 11, but the debtor is an affiliate as defined in
subparagraph (B), (C), or (D) of that section, then the
bankruptcy case may be filed in the district in which
the principal place of business of the affiliate with
the greatest assets in the United States is located.''.
(b) Change of Venue.--Section 1412 of title 28, United States
Code, is amended--
(1) by striking ``A'' and inserting the following:
``(a) A''; and
(2) by adding at the end the following:
``(b) The district court of a district in which is filed a
case laying venue in the wrong division or district shall
dismiss, or if it be in the interest of justice, transfer such
case to any district or division in which it could have been
brought.
``(c) Nothing in this chapter shall impair the jurisdiction
of a district court of any matter involving a party who does
not interpose timely and sufficient objection to the venue.
``(d) As used in this section--
``(1) the term ``district court'' includes--
``(A) the bankruptcy judges of each such
court as defined in section 151 of this title;
and
``(B) the District Court of Guam, the
District Court for the Northern Mariana
Islands, and the District Court of the Virgin
Islands, including any bankruptcy judge of each
such court; and
``(2) the term ``district'' includes the territorial
jurisdiction of each such court.''.
----------
5. An Amendment in the Nature of a Substitute To Be Offered by
Representative Conyers of Michigan, or His Designee, Debatable for 40
Minutes
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Bankruptcy Abuse Prevention
and Consumer Protection Act of 2003''.
TITLE I--NEEDS-BASED BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is amended by
inserting ``or consents to'' after ``requests''.
SEC. 102. DISMISSAL OR CONVERSION.
(a) In General.--Section 707 of title 11, United States Code,
is amended--
(1) by striking the section heading and inserting the
following:
``Sec. 707. Dismissal of a case or conversion to a case under chapter
13'';
and
(2) in subsection (b)--
(A) by inserting ``(1)'' after ``(b)''; and
(B) in paragraph (1), as redesignated by
subparagraph (A) of this paragraph--
(i) in the first sentence--
(I) by striking ``but not''
and inserting ``or'';
(II) by inserting ``, or,
with the debtor's consent,
convert such a case to a case
under chapter 13 of this
title,'' after ``consumer
debts''; and
(III) by striking
``substantial abuse'' and
inserting ``abuse''; and
(ii) by striking the last sentence
and inserting the following:
``(2) In considering under paragraph (1) whether the granting
of relief would be an abuse of the provisions of this chapter,
the court shall consider whether--
``(A) under section 1325(b)(1), on the basis of the
current income of the debtor, the debtor could pay an
amount greater than or equal to 30 percent of unsecured
claims that are not considered to be priority claims
(as determined under subchapter I of chapter 5); or
``(B) the debtor filed a petition for the relief in
bad faith.
``(6) Only the judge or United States trustee (or bankruptcy
administrator, if any) may file a motion under section 707(b),
if the current monthly income of the debtor, or in a joint
case, the debtor and the debtor's spouse, as of the date of the
order for relief, when multiplied by 12, is equal to or less
than--
``(A) in the case of a debtor in a household of 1
person, the median family income of the applicable
State for 1 earner;
``(B) in the case of a debtor in a household of 2, 3,
or 4 individuals, the highest median family income of
the applicable State for a family of the same number or
fewer individuals; or
``(C) in the case of a debtor in a household
exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or
fewer individuals, plus $525 per month for each
individual in excess of 4.
``(7)(A) No judge, United States trustee (or bankruptcy
administrator, if any), trustee, or other party in interest may
file a motion under paragraph (2) if the current monthly income
of the debtor and the debtor's spouse combined, as of the date
of the order for relief when multiplied by 12, is equal to or
less than--
``(i) in the case of a debtor in a household of 1
person, the median family income of the applicable
State for 1 earner;
``(ii) in the case of a debtor in a household of 2,
3, or 4 individuals, the highest median family income
of the applicable State for a family of the same number
or fewer individuals; or
``(iii) in the case of a debtor in a household
exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or
fewer individuals, plus $525 per month for each
individual in excess of 4.
``(B) In a case that is not a joint case, current monthly
income of the debtor's spouse shall not be considered for
purposes of subparagraph (A) if--
``(i)(I) the debtor and the debtor's spouse are
separated under applicable nonbankruptcy law; or
``(II) the debtor and the debtor's spouse are living
separate and apart, other than for the purpose of
evading subparagraph (A); and
``(ii) the debtor files a statement under penalty of
perjury--
``(I) specifying that the debtor meets the
requirement of subclause (I) or (II) of clause
(i); and
``(II) disclosing the aggregate, or best
estimate of the aggregate, amount of any cash
or money payments received from the debtor's
spouse attributed to the debtor's current
monthly income.''.
(b) Definition.--Section 101 of title 11, United States Code,
is amended by inserting after paragraph (10) the following:
``(10A) `current monthly income'--
``(A) means the average monthly income from
all sources that the debtor receives (or in a
joint case the debtor and the debtor's spouse
receive) without regard to whether such income
is taxable income, derived during the 60-day
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;''.
(i) Special Allowance for Health Insurance.--Section 1329(a)
of title 11, United States Code, is amended--
(1) in paragraph (2) by striking ``or'' at the end;
(2) in paragraph (3) by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following:
``(4) reduce amounts to be paid under the plan by the
actual amount expended by the debtor to purchase health
insurance for the debtor (and for any dependent of the
debtor if such dependent does not otherwise have health
insurance coverage) if the debtor documents the cost of
such insurance and demonstrates that--
``(A) such expenses are reasonable and
necessary;
``(B)(i) if the debtor previously paid for
health insurance, the amount is not materially
larger than the cost the debtor previously paid
or the cost necessary to maintain the lapsed
policy; or
``(ii) if the debtor did not have health
insurance, the amount is not materially larger
than the reasonable cost that would be incurred
by a debtor who purchases health insurance, who
has similar income, expenses, age, and health
status, and who lives in the same geographical
location with the same number of dependents who
do not otherwise have health insurance
coverage; and
``(C) the amount is not otherwise allowed for
purposes of determining disposable income under
section 1325(b) of this title;
and upon request of any party in interest, files proof
that a health insurance policy was purchased.''.
(j) Adjustment of Dollar Amounts.--Section 104(b) of title
11, United States Code, is amended by striking ``and
523(a)(2)(C)'' each place it appears and inserting
``523(a)(2)(C), 707(b), and 1325(b)(3)''.
(k) Definition of `Median Family Income'.--Section 101 of
title 11, United States Code, is amended by inserting after
paragraph (39) the following:
``(39A) `median family income' means for any year--
``(A) the median family income both
calculated and reported by the Bureau of the
Census in the then most recent year; and
``(B) if not so calculated and reported in
the then current year, adjusted annually after
such most recent year until the next year in
which median family income is both calculated
and reported by the Bureau of the Census, to
reflect the percentage change in the Consumer
Price Index for All Urban Consumers during the
period of years occurring after such most
recent year and before such current year;''.
(k) Clerical Amendment.--The table of sections for chapter 7
of title 11, United States Code, is amended by striking the
item relating to section 707 and inserting the following:
``707. Dismissal of a case or conversion to a case under chapter 11 or
13.''.
SEC. 103. 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. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.
(a) Development of Financial Management and Training
Curriculum and Materials.--The Director of the Executive Office
for United States Trustees (in this section referred to as the
``Director'') shall 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. 105. CREDIT COUNSELING.
(d) Debtor's Duties.--Section 521 of title 11, United States
Code, is amended--
(1) by inserting ``(a)'' before ``The debtor shall--
''; and
(2) by adding at the end the following:
``(b) In addition to the requirements under subsection (a), a
debtor who is an individual shall file with the court--
``(1) a certificate from the approved nonprofit
budget and credit counseling agency that provided the
debtor services under section 109(h) describing the
services provided to the debtor; and
``(2) a copy of the debt repayment plan, if any,
developed under section 109(h) through the approved
nonprofit budget and credit counseling agency referred
to in paragraph (1).''.
(e) General Provisions.--
(1) In general.--Chapter 1 of title 11, United States
Code, is amended by adding at the end the following:
``Sec. 111. Nonprofit budget and credit counseling agencies; financial
management instructional courses
``(a) The clerk shall maintain a publicly available list of--
``(1) nonprofit budget and credit counseling agencies
that provide 1 or more services described in section
109(h) currently approved by the United States trustee
(or the bankruptcy administrator, if any); and
``(2) instructional courses concerning personal
financial management currently approved by the United
States trustee (or the bankruptcy administrator, if
any), as applicable.
``(b) The United States trustee (or bankruptcy administrator,
if any) shall only approve a nonprofit budget and credit
counseling agency or an instructional course concerning
personal financial management as follows:
``(1) The United States trustee (or bankruptcy
administrator, if any) shall have thoroughly reviewed
the qualifications of the nonprofit budget and credit
counseling agency or of the provider of the
instructional course under the standards set forth in
this section, and the services or instructional courses
that will be offered by such agency or such provider,
and may require such agency or such provider that has
sought approval to provide information with respect to
such review.
``(2) The United States trustee (or bankruptcy
administrator, if any) shall have determined that such
agency or such instructional course fully satisfies the
applicable standards set forth in this section.
``(3) If a nonprofit budget and credit counseling
agency or instructional course did not appear on the
approved list for the district under subsection (a)
immediately before approval under this section,
approval under this subsection of such agency or such
instructional course shall be for a probationary period
not to exceed 6 months.
``(4) At the conclusion of the applicable
probationary period under paragraph (3), the United
States trustee (or bankruptcy administrator, if any)
may only approve for an additional 1-year period, and
for successive 1-year periods thereafter, an agency or
instructional course that has demonstrated during the
probationary or applicable subsequent period of
approval that such agency or instructional course--
``(A) has met the standards set forth under
this section during such period; and
``(B) can satisfy such standards in the
future.
``(5) Not later than 30 days after any final decision
under paragraph (4), an interested person may seek
judicial review of such decision in the appropriate
district court of the United States.
``(c)(1) The United States trustee (or the bankruptcy
administrator, if any) shall only approve a nonprofit budget
and credit counseling agency that demonstrates that it will
provide qualified counselors, maintain adequate provision for
safekeeping and payment of client funds, provide adequate
counseling with respect to client credit problems, and deal
responsibly and effectively with other matters relating to the
quality, effectiveness, and financial security of the services
it provides.
``(2) To be approved by the United States trustee (or the
bankruptcy administrator, if any), a nonprofit budget and
credit counseling agency shall, at a minimum--
``(A) have a board of directors the majority of
which--
``(i) are not employed by such agency; and
``(ii) will not directly or indirectly
benefit financially from the outcome of the
counseling services provided by such agency;
``(B) if a fee is charged for counseling services,
charge a reasonable fee, and provide services without
regard to ability to pay the fee;
``(C) provide for safekeeping and payment of client
funds, including an annual audit of the trust accounts
and appropriate employee bonding;
``(D) provide full disclosures to a client, including
funding sources, counselor qualifications, possible
impact on credit reports, and any costs of such program
that will be paid by such client and how such costs
will be paid;
``(E) provide adequate counseling with respect to a
client's credit problems that includes an analysis of
such client's current financial condition, factors that
caused such financial condition, and how such client
can develop a plan to respond to the problems without
incurring negative amortization of debt;
``(F) provide trained counselors who receive no
commissions or bonuses based on the outcome of the
counseling services provided by such agency, and who
have adequate experience, and have been adequately
trained to provide counseling services to individuals
in financial difficulty, including the matters
described in subparagraph (E);
``(G) demonstrate adequate experience and background
in providing credit counseling; and
``(H) have adequate financial resources to provide
continuing support services for budgeting plans over
the life of any repayment plan.
``(d) The United States trustee (or the bankruptcy
administrator, if any) shall only approve an instructional
course concerning personal financial management--
``(1) for an initial probationary period under
subsection (b)(3) if the course will provide at a
minimum--
``(A) trained personnel with adequate
experience and training in providing effective
instruction and services;
``(B) learning materials and teaching
methodologies designed to assist debtors in
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. 106. SCHEDULES OF REASONABLE AND NECESSARY EXPENSES.
For purposes of section 707(b) of title 11, United States
Code, as amended by this Act, the Director of the Executive
Office for United States Trustees shall, not later than 180
days after the date of enactment of this Act, issue schedules
of reasonable and necessary administrative expenses of
administering a chapter 13 plan for each judicial district of
the United States.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
SEC. 201. PRESERVATION OF CLAIMS AND DEFENSES UPON SALE OF PREDATORY
LOANS.
Section 363 of title 11, United States Code, is amended--
(1) by redesignating subsection (o) as subsection
(p), and
(2) by inserting after subsection (n) the following:
``(o) Notwithstanding subsection (f), if a person purchases
any interest in a consumer credit transaction that is subject
to the Truth in Lending Act or any interest in a consumer
credit contract (as defined in section 433.1 of title 16 of the
Code of Federal Regulations (January 1, 2002), as amended from
time to time), and if such interest is purchased through a sale
under this section, then such person shall remain subject to
all claims and defenses that are related to such consumer
credit transaction or such consumer credit contract, to the
same extent as such person would be subject to such claims and
defenses of the consumer had such interest been purchased at a
sale not under this section.''.
SEC. 202. GAO STUDY AND REPORT ON REAFFIRMATION AGREEMENT PROCESS.
(a) Study.--The Comptroller General of the United States
shall conduct a study of the reaffirmation agreement process
that occurs under title 11 of the United States Code, to
determine the overall treatment of consumers within the context
of such process, and shall include in such study consideration
of--
(1) the policies and activities of creditors with
respect to reaffirmation agreements; and
(2) whether consumers are fully, fairly, and
consistently informed of their rights pursuant to such
title.
(b) Report to the Congress.--Not later than 18 months after
the date of the enactment of this Act, the Comptroller General
shall submit to the President pro tempore of the Senate and the
Speaker of the House of Representatives a report on the results
of the study conducted under subsection (a), together with
recommendations for legislation (if any) to address any abusive
or coercive tactics found in connection with the reaffirmation
agreement process that occurs under title 11 of the United
States Code.
Subtitle B--Priority Child Support
SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.
Section 101 of title 11, United States Code, is amended--
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the following:
``(14A) `domestic support obligation' means a debt
that accrues before or after the date of the order for
relief in a case under this title, including interest
that accrues on that debt as provided under applicable
nonbankruptcy law notwithstanding any other provision
of this title, that is--
``(A) owed to or recoverable by--
``(i) a spouse, former spouse, or
child of the debtor or such child's
parent, legal guardian, or responsible
relative; or
``(ii) a governmental unit;
``(B) in the nature of alimony, maintenance,
or support (including assistance provided by a
governmental unit) of such spouse, former
spouse, or child of the debtor or such child's
parent, without regard to whether such debt is
expressly so designated;
``(C) established or subject to establishment
before or after the date of the order for
relief in a case under this title, by reason of
applicable provisions of--
``(i) a separation agreement, divorce
decree, or property settlement
agreement;
``(ii) an order of a court of record;
or
``(iii) a determination made in
accordance with applicable
nonbankruptcy law by a governmental
unit; and
``(D) not assigned to a nongovernmental
entity, unless that obligation is assigned
voluntarily by the spouse, former spouse, child
of the debtor, or such child's parent, legal
guardian, or responsible relative for the
purpose of collecting the debt;''.
SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is amended--
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through (6) as
paragraphs (2) through (7), respectively;
(3) in paragraph (2), as so redesignated, by striking
``First'' and inserting ``Second'';
(4) in paragraph (3), as so redesignated, by striking
``Second'' and inserting ``Third'';
(5) in paragraph (4), as so redesignated--
(A) by striking ``Third'' and inserting
``Fourth''; and
(B) by striking the semicolon at the end and
inserting a period;
(6) in paragraph (5), as so redesignated, by striking
``Fourth'' and inserting ``Fifth'';
(7) in paragraph (6), as so redesignated, by striking
``Fifth'' and inserting ``Sixth'';
(8) in paragraph (7), as so redesignated, by striking
``Sixth'' and inserting ``Seventh''; and
(9) by inserting before paragraph (2), as so
redesignated, the following:
``(1) First:
``(A) Allowed unsecured claims for domestic
support obligations that, as of the date of the
filing of the petition in a case under this
title, are owed to or recoverable by a spouse,
former spouse, or child of the debtor, or such
child's parent, legal guardian, or responsible
relative, without regard to whether the claim
is filed by such person or is filed by a
governmental unit on behalf of such person, on
the condition that funds received under this
paragraph by a governmental unit under this
title after the date of the filing of the
petition shall be applied and distributed in
accordance with applicable nonbankruptcy law.
``(B) Subject to claims under subparagraph
(A), allowed unsecured claims for domestic
support obligations that, as of the date of the
filing of the petition, are assigned by a
spouse, former spouse, child of the debtor, or
such child's parent, legal guardian, or
responsible relative to a governmental unit
(unless such obligation is assigned voluntarily
by the spouse, former spouse, child, parent,
legal guardian, or responsible relative of the
child for the purpose of collecting the debt)
or are owed directly to or recoverable by a
governmental unit under applicable
nonbankruptcy law, on the condition that funds
received under this paragraph by a governmental
unit under this title after the date of the
filing of the petition be applied and
distributed in accordance with applicable
nonbankruptcy law.
``(C) If a trustee is appointed or elected
under section 701, 702, 703, 1104, 1202, or
1302, the administrative expenses of the
trustee allowed under paragraphs (1)(A), (2),
and (6) of section 503(b) shall be paid before
payment of claims under subparagraphs (A) and
(B), to the extent that the trustee administers
assets that are otherwise available for the
payment of such claims.''.
SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES
INVOLVING DOMESTIC SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended--
(1) in section 1129(a), by adding at the end the
following:
``(14) If the debtor is required by a judicial or
administrative order, or by statute, to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order or such statute for such
obligation that first become payable after the date of
the filing of the petition.'';
(2) in section 1208(c)--
(A) in paragraph (8), by striking ``or'' at
the end;
(B) in paragraph (9), by striking the period
at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(10) failure of the debtor to pay any domestic
support obligation that first becomes payable after the
date of the filing of the petition.'';
(3) in section 1222(a)--
(A) in paragraph (2), by striking ``and'' at
the end;
(B) in paragraph (3), by striking the period
at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(4) notwithstanding any other provision of this
section, a plan may provide for less than full payment
of all amounts owed for a claim entitled to priority
under section 507(a)(1)(B) only if the plan provides
that all of the debtor's projected disposable income
for a 5-year period beginning on the date that the
first payment is due under the plan will be applied to
make payments under the plan.'';
(4) in section 1222(b)--
(A) by redesignating paragraph (11) as
paragraph (12); and
(B) by inserting after paragraph (10) the
following:
``(11) provide for the payment of interest accruing
after the date of the filing of the petition on
unsecured claims that are nondischargeable under
section 1228(a), except that such interest may be paid
only to the extent that the debtor has disposable
income available to pay such interest after making
provision for full payment of all allowed claims;'';
(5) in section 1225(a)--
(A) in paragraph (5), by striking ``and'' at
the end;
(B) in paragraph (6), by striking the period
at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(7) the debtor has paid all amounts that are
required to be paid under a domestic support obligation
and that first become payable after the date of the
filing of the petition if the debtor is required by a
judicial or administrative order, or by statute, to pay
such domestic support obligation.'';
(6) in section 1228(a), in the matter preceding
paragraph (1), by inserting ``, and in the case of a
debtor who is required by a judicial or administrative
order, or by statute, to pay a domestic support
obligation, after such debtor certifies that all
amounts payable under such order or such statute that
are due on or before the date of the certification
(including amounts due before the petition was filed,
but only to the extent provided for by the plan) have
been paid'' after ``completion by the debtor of all
payments under the plan'';
(7) in section 1307(c)--
(A) in paragraph (9), by striking ``or'' at
the end;
(B) in paragraph (10), by striking the period
at the end and inserting ``; or''; and
(C) by adding at the end the following:
``(11) failure of the debtor to pay any domestic
support obligation that first becomes payable after the
date of the filing of the petition.'';
(8) in section 1322(a)--
(A) in paragraph (2), by striking ``and'' at
the end;
(B) in paragraph (3), by striking the period
at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(4) notwithstanding any other provision of this
section, a plan may provide for less than full payment
of all amounts owed for a claim entitled to priority
under section 507(a)(1)(B) only if the plan provides
that all of the debtor's projected disposable income
for a 5-year period beginning on the date that the
first payment is due under the plan will be applied to
make payments under the plan.'';
(9) in section 1322(b)--
(A) in paragraph (9), by striking ``; and''
and inserting a semicolon;
(B) by redesignating paragraph (10) as
paragraph (11); and
(C) inserting after paragraph (9) the
following:
``(10) provide for the payment of interest accruing
after the date of the filing of the petition on
unsecured claims that are nondischargeable under
section 1328(a), except that such interest may be paid
only to the extent that the debtor has disposable
income available to pay such interest after making
provision for full payment of all allowed claims;
and'';
(10) in section 1325(a), as amended by section 102,
by inserting after paragraph (7) the following:
``(8) the debtor has paid all amounts that are
required to be paid under a domestic support obligation
and that first become payable after the date of the
filing of the petition if the debtor is required by a
judicial or administrative order, or by statute, to pay
such domestic support obligation; and'';
(11) in section 1328(a), in the matter preceding
paragraph (1), by inserting ``, and in the case of a
debtor who is required by a judicial or administrative
order, or by statute, to pay a domestic support
obligation, after such debtor certifies that all
amounts payable under such order or such statute that
are due on or before the date of the certification
(including amounts due before the petition was filed,
but only to the extent provided for by the plan) have
been paid'' after ``completion by the debtor of all
payments under the plan''.
SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION
PROCEEDINGS.
Section 362(b) of title 11, United States Code, is amended by
striking paragraph (2) and inserting the following:
``(2) under subsection (a)--
``(A) of the commencement or continuation of
a civil action or proceeding--
``(i) for the establishment of
paternity;
``(ii) for the establishment or
modification of an order for domestic
support obligations;
``(iii) concerning child custody or
visitation;
``(iv) for the dissolution of a
marriage, except to the extent that
such proceeding seeks to determine the
division of property that is property
of the estate; or
``(v) regarding domestic violence;
``(B) of the collection of a domestic support
obligation from property that is not property
of the estate;
``(C) with respect to the withholding of
income that is property of the estate or
property of the debtor for payment of a
domestic support obligation under a judicial or
administrative order or a statute;
``(D) of the withholding, suspension, or
restriction of a driver's license, a
professional or occupational license, or a
recreational license, under State law, as
specified in section 466(a)(16) of the Social
Security Act;
``(E) of the reporting of overdue support
owed by a parent to any consumer reporting
agency as specified in section 466(a)(7) of the
Social Security Act;
``(F) of the interception of a tax refund, as
specified in sections 464 and 466(a)(3) of the
Social Security Act or under an analogous State
law; or
``(G) of the enforcement of a medical
obligation, as specified under title IV of the
Social Security Act;''.
SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY,
MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is amended--
(1) in subsection (a)--
(A) by striking paragraph (5) and inserting
the following:
``(5) for a domestic support obligation;''; and
(B) by striking paragraph (18);
(2) in subsection (c), by striking ``(6), or (15)''
each place it appears and inserting ``or (6)''; and
(3) in paragraph (15), as added by Public Law 103-394
(108 Stat. 4133)--
(A) by inserting ``to a spouse, former
spouse, or child of the debtor and'' before
``not of the kind'';
(B) by inserting ``or'' after ``court of
record,''; and
(C) by striking ``unless--'' and all that
follows through the end of the paragraph and
inserting a semicolon.
SEC. 216. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is amended--
(1) in subsection (c), by striking paragraph (1) and
inserting the following:
``(1) a debt of a kind specified in paragraph (1) or
(5) of section 523(a) (in which case, notwithstanding
any provision of applicable nonbankruptcy law to the
contrary, such property shall be liable for a debt of a
kind specified in section 523(a)(5));'';
(2) in subsection (f)(1)(A), by striking the dash and
all that follows through the end of the subparagraph
and inserting ``of a kind that is specified in section
523(a)(5); or''; and
(3) in subsection (g)(2), by striking ``subsection
(f)(2)'' and inserting ``subsection (f)(1)(B)''.
SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST PREFERENTIAL
TRANSFER MOTIONS.
Section 547(c)(7) of title 11, United States Code, is amended
to read as follows:
``(7) to the extent such transfer was a bona fide
payment of a debt for a domestic support obligation;''.
SEC. 218. DISPOSABLE INCOME DEFINED.
Section 1225(b)(2)(A) of title 11, United States Code, is
amended by inserting ``or for a domestic support obligation
that first becomes payable after the date of the filing of the
petition'' after ``dependent of the debtor''.
SEC. 219. COLLECTION OF CHILD SUPPORT.
(a) Duties of Trustee Under Chapter 7.--Section 704 of title
11, United States Code, as amended by section 102, is amended--
(1) in subsection (a)--
(A) in paragraph (8), by striking ``and'' at
the end;
(B) in paragraph (9), by striking the period
and inserting a semicolon; and
(C) by adding at the end the following:
``(10) if with respect to the debtor there is a claim
for a domestic support obligation, provide the
applicable notice specified in subsection (c); and'';
and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (a)(10) to which
subsection (a)(10) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the
claim described in subsection (a)(10) of such claim and
of the right of such holder to use the services of the
State child support enforcement agency established
under sections 464 and 466 of the Social Security Act
for the State in which such holder resides, for
assistance in collecting child support during and after
the case under this title;
``(ii) include in the notice provided under clause
(i) the address and telephone number of such State
child support enforcement agency; and
``(iii) include in the notice provided under clause
(i) an explanation of the rights of such holder to
payment of such claim under this chapter;
``(B)(i) provide written notice to such State child
support enforcement agency of such claim; and
``(ii) include in the notice provided under clause
(i) the name, address, and telephone number of such
holder; and
``(C) at such time as the debtor is granted a
discharge under section 727, provide written notice to
such holder and to such State child support enforcement
agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the
debtor;
``(iii) the last recent known name and
address of the debtor's employer; and
``(iv) the name of each creditor that holds a
claim that--
``(I) is not discharged under
paragraph (2), (4), or (14A) of section
523(a); or
``(II) was reaffirmed by the debtor
under section 524(c).
``(2)(A) The holder of a claim described in subsection
(a)(10) or the State child support enforcement agency of the
State in which such holder resides may request from a creditor
described in paragraph (1)(C)(iv) the last known address of the
debtor.
``(B) Notwithstanding any other provision of law, a creditor
that makes a disclosure of a last known address of a debtor in
connection with a request made under subparagraph (A) shall not
be liable by reason of making such disclosure.''.
(b) Duties of Trustee Under Chapter 11.--Section 1106 of
title 11, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (6), by striking ``and'' at
the end;
(B) in paragraph (7), by striking the period
and inserting ``; and''; and
(C) by adding at the end the following:
``(8) if with respect to the debtor there is a claim
for a domestic support obligation, provide the
applicable notice specified in subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (a)(8) to which
subsection (a)(8) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the
claim described in subsection (a)(8) of such claim and
of the right of such holder to use the services of the
State child support enforcement agency established
under sections 464 and 466 of the Social Security Act
for the State in which such holder resides, for
assistance in collecting child support during and after
the case under this title; and
``(ii) include in the notice required by clause (i)
the address and telephone number of such State child
support enforcement agency;
``(B)(i) provide written notice to such State child
support enforcement agency of such claim; and
``(ii) include in the notice required by clause (i)
the name, address, and telephone number of such holder;
and
``(C) at such time as the debtor is granted a
discharge under section 1141, provide written notice to
such holder and to such State child support enforcement
agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the
debtor;
``(iii) the last recent known name and
address of the debtor's employer; and
``(iv) the name of each creditor that holds a
claim that--
``(I) is not discharged under
paragraph (2), (4), or (14A) of section
523(a); or
``(II) was reaffirmed by the debtor
under section 524(c).
``(2)(A) The holder of a claim described in subsection (a)(8)
or the State child enforcement support agency of the State in
which such holder resides may request from a creditor described
in paragraph (1)(C)(iv) the last known address of the debtor.
``(B) Notwithstanding any other provision of law, a creditor
that makes a disclosure of a last known address of a debtor in
connection with a request made under subparagraph (A) shall not
be liable by reason of making such disclosure.''.
(c) Duties of Trustee Under Chapter 12.--Section 1202 of
title 11, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``and'' at
the end;
(B) in paragraph (5), by striking the period
and inserting ``; and''; and
(C) by adding at the end the following:
``(6) if with respect to the debtor there is a claim
for a domestic support obligation, provide the
applicable notice specified in subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (b)(6) to which
subsection (b)(6) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the
claim described in subsection (b)(6) of such claim and
of the right of such holder to use the services of the
State child support enforcement agency established
under sections 464 and 466 of the Social Security Act
for the State in which such holder resides, for
assistance in collecting child support during and after
the case under this title; and
``(ii) include in the notice provided under clause
(i) the address and telephone number of such State
child support enforcement agency;
``(B)(i) provide written notice to such State child
support enforcement agency of such claim; and
``(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.''.
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 (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.'';
(2) 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);
(3) in subsection (d)--
(A) by striking ``(d)(1)'' and inserting
``(d)''; and
(B) by striking paragraph (2);
(4) 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.'';
(5) in subsection (f)--
(A) by striking ``(f)(1)'' and inserting
``(f)''; and
(B) by striking paragraph (2);
(6) in subsection (g)--
(A) by striking ``(g)(1)'' and inserting
``(g)''; and
(B) by striking paragraph (2);
(7) 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,'';
(8) 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--'';
(9) 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
(10) by adding at the end the following:
``(l)(1) A bankruptcy petition preparer who fails to comply
with any provision of subsection (b), (c), (d), (e), (f), (g),
or (h) may be fined not more than $500 for each such failure.
``(2) The court shall triple the amount of a fine assessed
under paragraph (1) in any case in which the court finds that a
bankruptcy petition preparer--
``(A) advised the debtor to exclude assets or income
that should have been included on applicable schedules;
``(B) advised the debtor to use a false Social
Security account number;
``(C) failed to inform the debtor that the debtor was
filing for relief under this title; or
``(D) prepared a document for filing in a manner that
failed to disclose the identity of the bankruptcy
petition preparer.
``(3) A debtor, trustee, creditor, or United States trustee
(or the bankruptcy administrator, if any) may file a motion for
an order imposing a fine on the bankruptcy petition preparer
for any violation of this section.
``(4)(A) Fines imposed under this subsection in judicial
districts served by United States trustees shall be paid to the
United States trustee, who shall deposit an amount equal to
such fines in a special account of the United States Trustee
System Fund referred to in section 586(e)(2) of title 28.
Amounts deposited under this subparagraph shall be available to
fund the enforcement of this section on a national basis.
``(B) Fines imposed under this subsection in judicial
districts served by bankruptcy administrators shall be
deposited as offsetting receipts to the fund established under
section 1931 of title 28, and shall remain available until
expended to reimburse any appropriation for the amount paid out
of such appropriation for expenses of the operation and
maintenance of the courts of the United States.''.
SEC. 222. SENSE OF CONGRESS.
It is the sense of Congress that States should develop
curricula relating to the subject of personal finance, designed
for use in elementary and secondary schools.
SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.
Section 507(a) of title 11, United States Code, as amended by
section 212, is amended by inserting after paragraph (9) the
following:
``(10) Tenth, allowed claims for death or personal
injury resulting from the operation of a motor vehicle
or vessel if such operation was unlawful because the
debtor was intoxicated from using alcohol, a drug, or
another substance.''.
SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.
(a) In General.--Section 522 of title 11, United States Code,
is amended--
(1) in subsection (b)--
(A) in paragraph (2)--
(i) in subparagraph (A), by striking
``and'' at the end;
(ii) in subparagraph (B), by striking
the period at the end and inserting ``;
and'';
(iii) by adding at the end the
following:
``(C) retirement funds to the extent that those funds
are in a fund or account that is exempt from taxation
under section 401, 403, 408, 408A, 414, 457, or 501(a)
of the Internal Revenue Code of 1986.''; and
(iv) by striking ``(2)(A) any
property'' and inserting:
``(3) Property listed in this paragraph is--
``(A) any property'';
(B) by striking paragraph (1) and inserting:
``(2) Property listed in this paragraph is property that is
specified under subsection (d), unless the State law that is
applicable to the debtor under paragraph (3)(A) specifically
does not so authorize.'';
(C) by striking ``(b) Notwithstanding'' and
inserting ``(b)(1) Notwithstanding'';
(D) by striking ``paragraph (2)'' each place
it appears and inserting ``paragraph (3)'';
(E) by striking ``paragraph (1)'' each place
it appears and inserting ``paragraph (2)'';
(F) by striking ``Such property is--''; and
(G) by adding at the end the following:
``(4) For purposes of paragraph (3)(C) and subsection
(d)(12), the following shall apply:
``(A) If the retirement funds are in a retirement
fund that has received a favorable determination under
section 7805 of the Internal Revenue Code of 1986, and
that determination is in effect as of the date of the
filing of the petition in a case under this title,
those funds shall be presumed to be exempt from the
estate.
``(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
under such section 7805, those funds are exempt from
the estate if the debtor demonstrates that--
``(i) no prior determination to the contrary
has been made by a court or the Internal
Revenue Service; and
``(ii)(I) the retirement fund is in
substantial compliance with the applicable
requirements of the Internal Revenue Code of
1986; or
``(II) the retirement fund fails to be in
substantial compliance with the applicable
requirements of the Internal Revenue Code of
1986 and the debtor is not materially
responsible for that failure.
``(C) A direct transfer of retirement funds from 1
fund or account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986, under section 401(a)(31)
of the Internal Revenue Code of 1986, or otherwise,
shall not cease to qualify for exemption under
paragraph (3)(C) or subsection (d)(12) by reason of
such direct transfer.
``(D)(i) Any distribution that qualifies as an
eligible rollover distribution within the meaning of
section 402(c) of the Internal Revenue Code of 1986 or
that is described in clause (ii) shall not cease to
qualify for exemption under paragraph (3)(C) or
subsection (d)(12) by reason of such distribution.
``(ii) A distribution described in this clause is an
amount that--
``(I) has been distributed from a fund or
account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986;
and
``(II) to the extent allowed by law, is
deposited in such a fund or account not later
than 60 days after the distribution of such
amount.''; and
(2) in subsection (d)--
(A) in the matter preceding paragraph (1), by
striking ``subsection (b)(1)'' and inserting
``subsection (b)(2)''; and
(B) by adding at the end the following:
``(12) Retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414, 457,
or 501(a) of the Internal Revenue Code of 1986.''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, is amended--
(1) in paragraph (17), by striking ``or'' at the end;
(2) in paragraph (18), by striking the period and
inserting a semicolon; and
(3) by inserting after paragraph (18) the following:
``(19) under subsection (a), of withholding of income
from a debtor's wages and collection of amounts
withheld, under the debtor's agreement authorizing that
withholding and collection for the benefit of a
pension, profit-sharing, stock bonus, or other plan
established under section 401, 403, 408, 408A, 414,
457, or 501(c) of the Internal Revenue Code of 1986,
that is sponsored by the employer of the debtor, or an
affiliate, successor, or predecessor of such employer--
``(A) to the extent that the amounts withheld
and collected are used solely for payments
relating to a loan from a plan under section
408(b)(1) of the Employee Retirement Income
Security Act of 1974 or is subject to section
72(p) of the Internal Revenue Code of 1986; or
``(B) a loan from a thrift savings plan
permitted under subchapter III of chapter 84 of
title 5, that satisfies the requirements of
section 8433(g) of such title;
but nothing in this paragraph may be construed to
provide that any loan made under a governmental plan
under section 414(d), or a contract or account under
section 403(b), of the Internal Revenue Code of 1986
constitutes a claim or a debt under this title;''.
(c) Exceptions To Discharge.--Section 523(a) of title 11,
United States Code, as amended by section 215, is amended by
inserting after paragraph (17) the following:
``(18) owed to a pension, profit-sharing, stock
bonus, or other plan established under section 401,
403, 408, 408A, 414, 457, or 501(c) of the Internal
Revenue Code of 1986, under--
``(A) a loan permitted under section
408(b)(1) of the Employee Retirement Income
Security Act of 1974, or subject to section
72(p) of the Internal Revenue Code of 1986; or
``(B) a loan from a thrift savings plan
permitted under subchapter III of chapter 84 of
title 5, that satisfies the requirements of
section 8433(g) of such title;
but nothing in this paragraph may be construed to
provide that any loan made under a governmental plan
under section 414(d), or a contract or account under
section 403(b), of the Internal Revenue Code of 1986
constitutes a claim or a debt under this title; or''.
(d) Plan Contents.--Section 1322 of title 11, United States
Code, is amended by adding at the end the following:
``(f) A plan may not materially alter the terms of a loan
described in section 362(b)(19) and any amounts required to
repay such loan shall not constitute `disposable income' under
section 1325.''.
(e) Asset Limitation.--
(1) Limitation.--Section 522 of title 11, United
States Code, is amended by adding at the end the
following:
``(n) For assets in individual retirement accounts described
in section 408 or 408A of the Internal Revenue Code of 1986,
other than a simplified employee pension under section 408(k)
of such Code or a simple retirement account under section
408(p) of such Code, the aggregate value of such assets
exempted under this section, without regard to amounts
attributable to rollover contributions under section 402(c),
402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal
Revenue Code of 1986, and earnings thereon, shall not exceed
$1,000,000 in a case filed by a debtor who is an individual,
except that such amount may be increased if the interests of
justice so require.''.
(2) Adjustment of dollar amounts.--Paragraphs (1) and
(2) of section 104(b) of title 11, United States Code,
are amended by inserting ``522(n),'' after ``522(d),''.
SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.
(a) Exclusions.--Section 541 of title 11, United States Code,
is amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``or'' at
the end;
(B) by redesignating paragraph (5) as
paragraph (9); and
(C) by inserting after paragraph (4) the
following:
``(5) funds placed in an education individual
retirement account (as defined in section 530(b)(1) of
the Internal Revenue Code of 1986) not later than 365
days before the date of the filing of the petition in a
case under this title, but--
``(A) only if the designated beneficiary of
such account was a child, stepchild,
grandchild, or stepgrandchild of the debtor for
the taxable year for which funds were placed in
such account;
``(B) only to the extent that such funds--
``(i) are not pledged or promised to
any entity in connection with any
extension of credit; and
``(ii) are not excess contributions
(as described in section 4973(e) of the
Internal Revenue Code of 1986); and
``(C) in the case of funds placed in all such
accounts having the same designated beneficiary
not earlier than 720 days nor later than 365
days before such date, only so much of such
funds as does not exceed $5,000;
``(6) funds used to purchase a tuition credit or
certificate or contributed to an account in accordance
with section 529(b)(1)(A) of the Internal Revenue Code
of 1986 under a qualified State tuition program (as
defined in section 529(b)(1) of such Code) not later
than 365 days before the date of the filing of the
petition in a case under this title, but--
``(A) only if the designated beneficiary of
the amounts paid or contributed to such tuition
program was a child, stepchild, grandchild, or
stepgrandchild of the debtor for the taxable
year for which funds were paid or contributed;
``(B) with respect to the aggregate amount
paid or contributed to such program having the
same designated beneficiary, only so much of
such amount as does not exceed the total
contributions permitted under section 529(b)(7)
of such Code with respect to such beneficiary,
as adjusted beginning on the date of the filing
of the petition in a case under this title by
the annual increase or decrease (rounded to the
nearest tenth of 1 percent) in the education
expenditure category of the Consumer Price
Index prepared by the Department of Labor; and
``(C) in the case of funds paid or
contributed to such program having the same
designated beneficiary not earlier than 720
days nor later than 365 days before such date,
only so much of such funds as does not exceed
$5,000;''; and
(2) by adding at the end the following:
``(e) In determining whether any of the relationships
specified in paragraph (5)(A) or (6)(A) of subsection (b)
exists, a legally adopted child of an individual (and a child
who is a member of an individual's household, if placed with
such individual by an authorized placement agency for legal
adoption by such individual), or a foster child of an
individual (if such child has as the child's principal place of
abode the home of the debtor and is a member of the debtor's
household) shall be treated as a child of such individual by
blood.''.
(b) Debtor's Duties.--Section 521 of title 11, United States
Code, as amended by section 106, is amended by adding at the
end the following:
``(c) In addition to meeting the requirements under
subsection (a), a debtor shall file with the court a record of
any interest that a debtor has in an education individual
retirement account (as defined in section 530(b)(1) of the
Internal Revenue Code of 1986) or under a qualified State
tuition program (as defined in section 529(b)(1) of such
Code).''.
SEC. 226. DEFINITIONS.
(a) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by inserting after paragraph (2) the following:
``(3) `assisted person' means any person whose debts
consist primarily of consumer debts and the value of
whose nonexempt property is less than $150,000;'';
(2) by inserting after paragraph (4) the following:
``(4A) `bankruptcy assistance' means any goods or
services sold or otherwise provided to an assisted
person with the express or implied purpose of providing
information, advice, counsel, document preparation, or
filing, or attendance at a creditors' meeting or
appearing in a proceeding on behalf of another or
providing legal representation with respect to a case
or proceeding under this title;''; and
(3) by inserting after paragraph (12) the following:
``(12A) `debt relief agency' means any person who
provides any bankruptcy assistance to an assisted
person in return for the payment of money or other
valuable consideration, or who is a bankruptcy petition
preparer under section 110, but does not include--
``(A) any person who is an officer, director,
employee, or agent of a person who provides
such assistance or of the bankruptcy petition
preparer;
``(B) a nonprofit organization that is exempt
from taxation under section 501(c)(3) of the
Internal Revenue Code of 1986;
``(C) a creditor of such assisted person, to
the extent that the creditor is assisting such
assisted person to restructure any debt owed by
such assisted person to the creditor;
``(D) a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act)
or any Federal credit union or State credit
union (as those terms are defined in section
101 of the Federal Credit Union Act), or any
affiliate or subsidiary of such depository
institution or credit union; or
``(E) an author, publisher, distributor, or
seller of works subject to copyright protection
under title 17, when acting in such
capacity.''.
(b) Conforming Amendment.--Section 104(b) of title 11, United
States Code, is amended by inserting ``101(3),'' after
``sections'' each place it appears.
SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.
(a) Enforcement.--Subchapter II of chapter 5 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 526. Restrictions on debt relief agencies
``(a) A debt relief agency shall not--
``(1) fail to perform any service that such agency
informed an assisted person or prospective assisted
person it would provide in connection with a case or
proceeding under this title;
``(2) make any statement, or counsel or advise any
assisted person or prospective assisted person to make
a statement in a document filed in a case or proceeding
under this title, that is untrue and misleading, or
that upon the exercise of reasonable care, should have
been known by such agency to be untrue or misleading;
``(3) misrepresent to any assisted person or
prospective assisted person, directly or indirectly,
affirmatively or by material omission, with respect
to--
``(A) the services that such agency will
provide to such person; or
``(B) the benefits and risks that may result
if such person becomes a debtor in a case under
this title; or
``(4) advise an assisted person or prospective
assisted person to incur more debt in contemplation of
such person filing a case under this title or to pay an
attorney or bankruptcy petition preparer fee or charge
for services performed as part of preparing for or
representing a debtor in a case under this title.
``(b) Any waiver by any assisted person of any protection or
right provided under this section shall not be enforceable
against the debtor by any Federal or State court or any other
person, but may be enforced against a debt relief agency.
``(c)(1) Any contract for bankruptcy assistance between a
debt relief agency and an assisted person that does not comply
with the material requirements of this section, section 527, or
section 528 shall be void and may not be enforced by any
Federal or State court or by any other person, other than such
assisted person.
``(2) Any debt relief agency shall be liable to an assisted
person in the amount of any fees or charges in connection with
providing bankruptcy assistance to such person that such debt
relief agency has received, for actual damages, and for
reasonable attorneys' fees and costs if such agency is found,
after notice and a hearing, to have--
``(A) intentionally or negligently failed to comply
with any provision of this section, section 527, or
section 528 with respect to a case or proceeding under
this title for such assisted person;
``(B) provided bankruptcy assistance to an assisted
person in a case or proceeding under this title that is
dismissed or converted to a case under another chapter
of this title because of such agency's intentional or
negligent failure to file any required document
including those specified in section 521; or
``(C) intentionally or negligently disregarded the
material requirements of this title or the Federal
Rules of Bankruptcy Procedure applicable to such
agency.
``(3) In addition to such other remedies as are provided
under State law, whenever the chief law enforcement officer of
a State, or an official or agency designated by a State, has
reason to believe that any person has violated or is violating
this section, the State--
``(A) may bring an action to enjoin such violation;
``(B) may bring an action on behalf of its residents
to recover the actual damages of assisted persons
arising from such violation, including any liability
under paragraph (2); and
``(C) in the case of any successful action under
subparagraph (A) or (B), shall be awarded the costs of
the action and reasonable attorneys' fees as determined
by the court.
``(4) The district courts of the United States for districts
located in the State shall have concurrent jurisdiction of any
action under subparagraph (A) or (B) of paragraph (3).
``(5) Notwithstanding any other provision of Federal law and
in addition to any other remedy provided under Federal or State
law, if the court, on its own motion or on the motion of the
United States trustee or the debtor, finds that a person
intentionally violated this section, or engaged in a clear and
consistent pattern or practice of violating this section, the
court may--
``(A) enjoin the violation of such section; or
``(B) impose an appropriate civil penalty against
such person.
``(d) No provision of this section, section 527, or section
528 shall--
``(1) annul, alter, affect, or exempt any person
subject to such sections from complying with any law of
any State except to the extent that such law is
inconsistent with those sections, and then only to the
extent of the inconsistency; or
``(2) be deemed to limit or curtail the authority or
ability--
``(A) of a State or subdivision or
instrumentality thereof, to determine and
enforce qualifications for the practice of law
under the laws of that State; or
``(B) of a Federal court to determine and
enforce the qualifications for the practice of
law before that court.''.
(b) Conforming Amendment.--The table of sections for chapter
5 of title 11, United States Code, is amended by inserting
after the item relating to section 525, the following:
``526. Restrictions on debt relief agencies.''.
SEC. 228. DISCLOSURES.
(a) Disclosures.--Subchapter II of chapter 5 of title 11,
United States Code, as amended by section 227, is amended by
adding at the end the following:
``Sec. 527. Disclosures
``(a) A debt relief agency providing bankruptcy assistance to
an assisted person shall provide--
``(1) the written notice required under section
342(b)(1); and
``(2) to the extent not covered in the written notice
described in paragraph (1), and not later than 3
business days after the first date on which a debt
relief agency first offers to provide any bankruptcy
assistance services to an assisted person, a clear and
conspicuous written notice advising assisted persons
that--
``(A) all information that the assisted
person is required to provide with a petition
and thereafter during a case under this title
is required to be complete, accurate, and
truthful;
``(B) all assets and all liabilities are
required to be completely and accurately
disclosed in the documents filed to commence
the case, and the replacement value of each
asset as defined in section 506 must be stated
in those documents where requested after
reasonable inquiry to establish such value;
``(C) current monthly income, the amounts
specified in section 707(b)(2), and, in a case
under chapter 13 of this title, disposable
income (determined in accordance with section
707(b)(2)), are required to be stated after
reasonable inquiry; and
``(D) information that an assisted person
provides during their case may be audited
pursuant to this title, and that failure to
provide such information may result in
dismissal of the case under this title or other
sanction, including a criminal sanction.
``(b) A debt relief agency providing bankruptcy assistance to
an assisted person shall provide each assisted person at the
same time as the notices required under subsection (a)(1) the
following statement, to the extent applicable, or one
substantially similar. The statement shall be clear and
conspicuous and shall be in a single document separate from
other documents or notices provided to the assisted person:
`` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE
SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.
`` `If you decide to seek bankruptcy relief, you can
represent yourself, you can hire an attorney to represent you,
or you can get help in some localities from a bankruptcy
petition preparer who is not an attorney. THE LAW REQUIRES AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN
CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION
PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see
the contract before you hire anyone.
`` `The following information helps you understand what must
be done in a routine bankruptcy case to help you evaluate how
much service you need. Although bankruptcy can be complex, many
cases are routine.
`` `Before filing a bankruptcy case, either you or your
attorney should analyze your eligibility for different forms of
debt relief available under the Bankruptcy Code and which form
of relief is most likely to be beneficial for you. Be sure you
understand the relief you can obtain and its limitations. To
file a bankruptcy case, documents called a Petition, Schedules
and Statement of Financial Affairs, as well as in some cases a
Statement of Intention need to be prepared correctly and filed
with the bankruptcy court. You will have to pay a filing fee to
the bankruptcy court. Once your case starts, you will have to
attend the required first meeting of creditors where you may be
questioned by a court official called a `trustee' and by
creditors.
`` `If you choose to file a chapter 7 case, you may be asked
by a creditor to reaffirm a debt. You may want help deciding
whether to do so. A creditor is not permitted to coerce you
into reaffirming your debts.
`` `If you choose to file a chapter 13 case in which you
repay your creditors what you can afford over 3 to 5 years, you
may also want help with preparing your chapter 13 plan and with
the confirmation hearing on your plan which will be before a
bankruptcy judge.
`` `If you select another type of relief under the Bankruptcy
Code other than chapter 7 or chapter 13, you will want to find
out what should be done from someone familiar with that type of
relief.
`` `Your bankruptcy case may also involve litigation. You are
generally permitted to represent yourself in litigation in
bankruptcy court, but only attorneys, not bankruptcy petition
preparers, can give you legal advice.'.
``(c) Except to the extent the debt relief agency provides
the required information itself after reasonably diligent
inquiry of the assisted person or others so as to obtain such
information reasonably accurately for inclusion on the
petition, schedules or statement of financial affairs, a debt
relief agency providing bankruptcy assistance to an assisted
person, to the extent permitted by nonbankruptcy law, shall
provide each assisted person at the time required for the
notice required under subsection (a)(1) reasonably sufficient
information (which shall be provided in a clear and conspicuous
writing) to the assisted person on how to provide all the
information the assisted person is required to provide under
this title pursuant to section 521, including--
``(1) how to value assets at replacement value,
determine current monthly income, the amounts specified
in section 707(b)(2) and, in a chapter 13 case, how to
determine disposable income in accordance with section
707(b)(2) and related calculations;
``(2) how to complete the list of creditors,
including how to determine what amount is owed and what
address for the creditor should be shown; and
``(3) how to determine what property is exempt and
how to value exempt property at replacement value as
defined in section 506.
``(d) A debt relief agency shall maintain a copy of the
notices required under subsection (a) of this section for 2
years after the date on which the notice is given the assisted
person.''.
(b) Conforming Amendment.--The table of sections for chapter
5 of title 11, United States Code, as amended by section 227,
is amended by inserting after the item relating to section 526
the following:
``527. Disclosures.''.
SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.
(a) Enforcement.--Subchapter II of chapter 5 of title 11,
United States Code, as amended by sections 227 and 228, is
amended by adding at the end the following:
``Sec. 528. Requirements for debt relief agencies
``(a) A debt relief agency shall--
``(1) not later than 5 business days after the first
date on which such agency provides any bankruptcy
assistance services to an assisted person, but prior to
such assisted person's petition under this title being
filed, execute a written contract with such assisted
person that explains clearly and conspicuously--
``(A) the services such agency will provide
to such assisted person; and
``(B) the fees or charges for such services,
and the terms of payment;
``(2) provide the assisted person with a copy of the
fully executed and completed contract;
``(3) clearly and conspicuously disclose in any
advertisement of bankruptcy assistance services or of
the benefits of bankruptcy directed to the general
public (whether in general media, seminars or specific
mailings, telephonic or electronic messages, or
otherwise) that the services or benefits are with
respect to bankruptcy relief under this title; and
``(4) clearly and conspicuously use the following
statement in such advertisement: `We are a debt relief
agency. We help people file for bankruptcy relief under
the Bankruptcy Code.' or a substantially similar
statement.
``(b)(1) An advertisement of bankruptcy assistance services
or of the benefits of bankruptcy directed to the general public
includes--
``(A) descriptions of bankruptcy assistance in
connection with a chapter 13 plan whether or not
chapter 13 is specifically mentioned in such
advertisement; and
``(B) statements such as `federally supervised
repayment plan' or `Federal debt restructuring help' or
other similar statements that could lead a reasonable
consumer to believe that debt counseling was being
offered when in fact the services were directed to
providing bankruptcy assistance with a chapter 13 plan
or other form of bankruptcy relief under this title.
``(2) An advertisement, directed to the general public,
indicating that the debt relief agency provides assistance with
respect to credit defaults, mortgage foreclosures, eviction
proceedings, excessive debt, debt collection pressure, or
inability to pay any consumer debt shall--
``(A) disclose clearly and conspicuously in such
advertisement that the assistance may involve
bankruptcy relief under this title; and
``(B) include the following statement: `We are a debt
relief agency. We help people file for bankruptcy
relief under the Bankruptcy Code.' or a substantially
similar statement.''.
(b) Conforming Amendment.--The table of sections for chapter
5 of title 11, United States Code, as amended by section 227
and 228, is amended by inserting after the item relating to
section 527, the following:
``528. Requirements for debt relief agencies.''.
SEC. 230. GAO STUDY.
(a) Study.--Not later than 270 days after the date of
enactment of this Act, the Comptroller General of the United
States shall conduct a study of the feasibility, effectiveness,
and cost of requiring trustees appointed under title 11, United
States Code, or the bankruptcy courts, to provide to the Office
of Child Support Enforcement promptly after the commencement of
cases by debtors who are individuals under such title, the
names and social security account numbers of such debtors for
the purposes of allowing such Office to determine whether such
debtors have outstanding obligations for child support (as
determined on the basis of information in the Federal Case
Registry or other national database).
(b) Report.--Not later than 300 days after the date of
enactment of this Act, the Comptroller General shall submit to
the President pro tempore of the Senate and the Speaker of the
House of Representatives a report containing the results of the
study required by subsection (a).
SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.
(a) Limitation.--Section 363(b)(1) of title 11, United States
Code, is amended by striking the period at the end and
inserting the following:
``, except that if the debtor in connection with offering a
product or a service discloses to an individual a policy
prohibiting the transfer of personally identifiable information
about individuals to persons that are not affiliated with the
debtor and if such policy is in effect on the date of the
commencement of the case, then the trustee may not sell or
lease personally identifiable information to any person
unless--
``(A) such sale or such lease is consistent with such
policy; or
``(B) after appointment of a consumer privacy
ombudsman in accordance with section 332, and after
notice and a hearing, the court approves such sale or
such lease--
``(i) giving due consideration to the facts,
circumstances, and conditions of such sale or
such lease; and
``(ii) finding that no showing was made that
such sale or such lease would violate
applicable nonbankruptcy law.''.
(b) Definition.--Section 101 of title 11, United States Code,
is amended by inserting after paragraph (41) the following:
``(41A) `personally identifiable information' means--
``(A) if provided by an individual to the
debtor in connection with obtaining a product
or a service from the debtor primarily for
personal, family, or household purposes--
``(i) the first name (or initial) and
last name of such individual, whether
given at birth or time of adoption, or
resulting from a lawful change of name;
``(ii) the geographical address of a
physical place of residence of such
individual;
``(iii) an electronic address
(including an e-mail address) of such
individual;
``(iv) a telephone number dedicated
to contacting such individual at such
physical place of residence;
``(v) a social security account
number issued to such individual; or
``(vi) the account number of a credit
card issued to such individual; or
``(B) if identified in connection with 1 or
more of the items of information specified in
subparagraph (A)--
``(i) a birth date, the number of a
certificate of birth or adoption, or a
place of birth; or
``(ii) any other information
concerning an identified individual
that, if disclosed, will result in
contacting or identifying such
individual physically or
electronically;''.
SEC. 232. CONSUMER PRIVACY OMBUDSMAN.
(a) Consumer Privacy Ombudsman.--Title 11 of the United
States Code is amended by inserting after section 331 the
following:
``Sec. 332. Consumer privacy ombudsman
``(a) If a hearing is required under section 363(b)(1)(B),
the court shall order the United States trustee to appoint, not
later than 5 days before the commencement of the hearing, 1
disinterested person (other than the United States trustee) to
serve as the consumer privacy ombudsman in the case and shall
require that notice of such hearing be timely given to such
ombudsman.
``(b) The consumer privacy ombudsman may appear and be heard
at such hearing and shall provide to the court information to
assist the court in its consideration of the facts,
circumstances, and conditions of the proposed sale or lease of
personally identifiable information under section 363(b)(1)(B).
Such information may include presentation of--
``(1) the debtor's privacy policy;
``(2) the potential losses or gains of privacy to
consumers if such sale or such lease is approved by the
court;
``(3) the potential costs or benefits to consumers if
such sale or such lease is approved by the court; and
``(4) the potential alternatives that would mitigate
potential privacy losses or potential costs to
consumers.
``(c) A consumer privacy ombudsman shall not disclose any
personally identifiable information obtained by the ombudsman
under this title.''.
(b) Compensation of Consumer Privacy Ombudsman.--Section
330(a)(1) of title 11, United States Code, is amended in the
matter preceding subparagraph (A), by inserting ``a consumer
privacy ombudsman appointed under section 332,'' before ``an
examiner''.
(c) Conforming Amendment.--The table of sections for
subchapter II of chapter 3 of title 11, United States Code, is
amended by adding at the end the following:
``332. Consumer privacy ombudsman.''.
SEC. 233. PROHIBITION ON DISCLOSURE OF NAME OF MINOR CHILDREN.
(a) Prohibition.--Title 11 of the United States Code, as
amended by section 106, is amended by inserting after section
111 the following:
``Sec. 112. Prohibition on disclosure of name of minor children
``The debtor may be required to provide information regarding
a minor child involved in matters under this title but may not
be required to disclose in the public records in the case the
name of such minor child. The debtor may be required to
disclose the name of such minor child in a nonpublic record
that is maintained by the court and made available by the court
for examination by the United States trustee, the trustee, and
the auditor (if any) serving under section 586(f) of title 28,
in the case. The court, the United States trustee, the trustee,
and such auditor shall not disclose the name of such minor
child maintained in such nonpublic record.''.
(b) Clerical Amendment.--The table of sections for chapter 1
of title 11, United States Code, as amended by section 106, is
amended by inserting after the item relating to section 111 the
following:
``112. Prohibition on disclosure of name of minor children.''.
(c) Conforming Amendment.--Section 107(a) of title 11, United
States Code, is amended by inserting ``and subject to section
112'' after ``section''.
TITLE III --DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. TECHNICAL AMENDMENTS.
Section 523(a)(17) of title 11, United States Code, is
amended--
(1) by striking ``by a court'' and inserting ``on a
prisoner by any court'';
(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. 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. 303. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.
(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 365-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
180-day period preceding that filing.''.
SEC. 304. 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. 305. 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. 306. LIMITATIONS ON HOMESTEAD EXEMPTION.
(a) Exemptions.--Section 522 of title 11, United States Code,
as amended by sections 224 and 308, is amended by adding at the
end the following:
``(p)(1) Except as provided in paragraph (2) of this
subsection and sections 544 and 548, as a result of electing
under subsection (b)(3)(A) to exempt property under State or
local law, a debtor may not exempt any amount of interest that
was acquired by the debtor during the 1215-day period preceding
the date of the filing of the petition that exceeds in the
aggregate $125,000 in value in--
``(A) real or personal property that the debtor or a
dependent of the debtor uses as a residence;
``(B) a cooperative that owns property that the
debtor or a dependent of the debtor uses as a
residence;
``(C) a burial plot for the debtor or a dependent of
the debtor; or
``(D) real or personal property that the debtor or
dependent of the debtor claims as a homestead.
``(2)(A) The limitation under paragraph (1) shall not apply
to an exemption claimed under subsection (b)(3)(A) by a family
farmer for the principal residence of such farmer.
``(B) For purposes of paragraph (1), any amount of such
interest does not include any interest transferred from a
debtor's previous principal residence (which was acquired prior
to the beginning of such 1215-day period) into the debtor's
current principal residence, if the debtor's previous and
current residences are located in the same State.
``(q)(1) As a result of electing under subsection (b)(3)(A)
to exempt property under State or local law, a debtor may not
exempt any amount of an interest in property described in
subparagraphs (A), (B), (C), and (D) of subsection (p)(1) which
exceeds in the aggregate $125,000 if--
``(A) the court determines, after notice and a
hearing, that the debtor has been convicted of a felony
(as defined in section 3156 of title 18), which under
the circumstances, demonstrates that the filing of the
case was an abuse of the provisions of this title; or
``(B) the debtor owes a debt arising from--
``(i) any violation of the Federal securities
laws (as defined in section 3(a)(47) of the
Securities Exchange Act of 1934), any State
securities laws, or any regulation or order
issued under Federal securities laws or State
securities laws;
``(ii) fraud, deceit, or manipulation in a
fiduciary capacity or in connection with the
purchase or sale of any security registered
under section 12 or 15(d) of the Securities
Exchange Act of 1934 or under section 6 of the
Securities Act of 1933;
``(iii) any civil remedy under section 1964
of title 18; or
``(iv) any criminal act, intentional tort, or
willful or reckless misconduct that caused
serious physical injury or death to another
individual in the preceding 5 years.
``(2) Paragraph (1) shall not apply to the extent the amount
of an interest in property described in subparagraphs (A), (B),
(C), and (D) of subsection (p)(1) is reasonably necessary for
the support of the debtor and any dependent of the debtor.''.
(b) Adjustment of Dollar Amounts.--Paragraphs (1) and (2) of
section 104(b) of title 11, United States Code, as amended by
section 224, are amended by inserting ``522(p), 522(q),'' after
``522(n),''.
SEC. 307. 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. 308. 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. 309. 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. 310. 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. 311. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.
Section 503(b)(1)(A) of title 11, United States Code, is
amended to read as follows:
``(A) the actual, necessary costs and expenses of
preserving the estate including--
``(i) wages, salaries, and commissions for
services rendered after the commencement of the
case; and
``(ii) wages and benefits awarded pursuant to
a judicial proceeding or a proceeding of the
National Labor Relations Board as back pay
attributable to any period of time occurring
after commencement of the case under this
title, as a result of a violation of Federal or
State law by the debtor, without regard to the
time of the occurrence of unlawful conduct on
which such award is based or to whether any
services were rendered, if the court determines
that payment of wages and benefits by reason of
the operation of this clause will not
substantially increase the probability of
layoff or termination of current employees, or
of nonpayment of domestic support obligations,
during the case under this title;''.
SEC. 312. 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).''.
SEC. 313. NONDISCHARGEABILITY OF DEBTS INCURRED THROUGH VIOLATIONS OF
CIVIL RIGHTS LAWS.
(a) Debts Incurred Through Violations of Civil Rights Laws.--
Section 523(a) of title 11, United States Code, as amended by
section 224, is amended--
(1) in paragraph (18) by striking ``or'' at the end;
(2) in paragraph (19) by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following:
``(20) that results from any judgment, order, consent
order, or decree entered in any Federal or State court,
or contained in any settlement agreement entered into
by the debtor (including any court-ordered damages,
fine, penalty, or attorney fee or cost owed by the
debtor), that arises from--
``(A) the violation by the debtor of any
offense described in section 244 (relating to
discrimination against a person wearing the
uniform of the Armed Forces), section 245
(relating to federally protected rights),
section 247 (relating to damage to religious
property; obstruction of persons in the free
exercise of religious beliefs), or section 248
(relating to the freedom of access to clinic
entrances), of title 18, United States Code;
``(B) an offense under State law that
consists of conduct that would be a civil
rights crime described in subparagraph (A) of
this paragraph; or
``(C) a valid court order enforcing a civil
rights law described in subparagraphs (A) or
(B) of this paragraph.''.
(b) Restitution.--Section 523(a)(13) of title 11, United
States Code, is amended by inserting ``or under the criminal
law of a State'' after ``title 18''.
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. 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.
``(iii) The court may extend the time periods specified in
this paragraph if the debtor establishes by clear and
convincing evidence that an extension is justified by
circumstances beyond the debtor's control that were not
foreseeable on the date of the order for relief.''.
(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. 404. 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. 405. AMENDMENTS TO SECTION 330(A) OF TITLE 11, UNITED STATES CODE.
Section 330(a) of title 11, United States Code, is amended--
(1) in paragraph (3)--
(A) by striking ``(A) In'' and inserting
``In''; and
(B) by inserting ``to an examiner, trustee
under chapter 11, or professional person''
after ``awarded''; and
(2) by adding at the end the following:
``(7) In determining the amount of reasonable compensation to
be awarded to a trustee, the court shall treat such
compensation as a commission, based on section 326.''.
SEC. 406. 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. 407. 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. 408. 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) Unless the debtor establishes by clear and
convincing evidence that there are circumstances beyond the
debtor's control that were not foreseeable on the date of the
order of relief, the 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) Unless the debtor establishes by clear and convincing
evidence that there are circumstances beyond the debtor's
control that were not foreseeable on the date of the order of
relief, the 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. 409. 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. 410. 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. 411. 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. 412. 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.
``(5) The court may extend the time period specified in
paragraph (2) if the debtor establishes by clear and convincing
evidence that an extension is justified by circumstances beyond
the debtor's control that were not foreseeable on the date the
assurance of payment was due.''.
SEC. 413. BANKRUPTCY FEES.
Section 1930 of title 28, United States Code, is amended--
(1) in subsection (a), by striking ``Notwithstanding
section 1915 of this title, the'' and inserting
``The''; and
(2) by adding at the end the following:
``(f)(1) Under the procedures prescribed by the Judicial
Conference of the United States, the district court or the
bankruptcy court may waive the filing fee in a case under
chapter 7 of title 11 for an individual if the court determines
that such individual has income less than 150 percent of the
income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act of
1981) applicable to a family of the size involved and is unable
to pay that fee in installments. For purposes of this
paragraph, the term `filing fee' means the filing required by
subsection (a), or any other fee prescribed by the Judicial
Conference under subsections (b) and (c) that is payable to the
clerk upon the commencement of a case under chapter 7.
``(2) The district court or the bankruptcy court may waive
for such debtors other fees prescribed under subsections (b)
and (c).
``(3) This subsection does not restrict the district court or
the bankruptcy court from waiving, in accordance with Judicial
Conference policy, fees prescribed under this section for other
debtors and creditors.''.
SEC. 414. EFFECT OF SALE OF ASSETS ON EMPLOYEE BENEFITS.
Section 363(b) of title 11, United States Code, is amended by
adding at the end the following:
``(3) The court shall not approve the sale of all or
substantially all the assets of a debtor with 50 or more
employees until the debtor has reported to the court on the
potential adverse impact that such sale is likely to have on
employee benefits, including any pension and health care plans
sponsored by the debtor.''.
SEC. 415. ADMINISTRATIVE EXPENSES.
Section 503 of title 11, United States Code, is amended by
adding at the end the following:
``(c)(1) Notwithstanding subsection (b), there shall neither
be allowed, nor paid--
``(A) a transfer made to, or an obligation incurred
for the benefit of, an insider of the debtor for the
purpose of inducing such person to remain with the
debtor's business, absent a finding by the court based
on evidence in the record that--
``(i) the transfer or obligation is essential
to retention of the person because the
individual has a bona fide job offer from
another business at the same or greater rate of
compensation;
``(ii) the services provided by the person
are essential to the survival of the business;
and
``(iii) either--
``(I) the amount of the transfer made
to, or obligation incurred for the
benefit of, the person is not greater
than an amount equal to 10 times the
amount of the mean transfer or
obligation of a similar kind given to
nonmanagement employees for any purpose
during the calendar year in which the
transfer is made or the obligation is
incurred; or
``(II) if no such similar transfers
were made to, or obligations were
incurred for the benefit of, such
nonmanagement employees during such
calendar year, the amount of the
transfer or obligation is not greater
than an amount equal to 25 percent of
the amount of any similar transfer or
obligation made to or incurred for the
benefit of such insider for any purpose
during the calendar year before the
year in which such transfer is made or
obligation is incurred;
``(B) a severance payment to an insider of the
debtor, unless--
``(i) the payment is part of a program that
is generally applicable to all full-time
employees; and
``(ii) the amount of the payment is not
greater than 10 times the amount of the mean
severance pay given to nonmanagement employees
during the calendar year in which the payment
is made; or
``(C) other transfers or obligations that are outside
the ordinary course of business and not justified by
the facts and circumstances of the case.
``(2) For purposes of paragraph (1)(C), transfers made to, or
obligations incurred for the benefit of, officers, managers, or
consultants hired after the date of the filing of the petition
shall be considered outside the ordinary course of business.''.
SEC. 416. PRIORITIES.
Section 507(a) of title 11, United States Code, is amended--
(1) in paragraph (3), by striking ``$4,000'' and
inserting ``$13,500'';
(2) in paragraph (3), striking ``90 days'' and
inserting ``180 days'';
(3) in paragraph (4)(A), striking ``180 days'' and
inserting ``360 days''; and
(4) in paragraph (4)(B)(i), by striking ``$4,000''
and inserting ``$13,500''.
SEC. 417. LOCAL FILING OF BANKRUPTCY CASES.
(a) Venue of Cases Under Title 11.--Section 1408 of title 28,
United States Code, is amended--
(1) by striking ``Except'' and inserting the
following:
``(a) Except'';
(2) in paragraph (2), by inserting ``as defined in
section 101(2)(A) of title 11'' after ``affiliate'';
and
(3) by adding at the end the following:
``(b) For purposes of subsection (a)--
``(1) if the debtor is a corporation, the domicile
and residence of the debtor are conclusively presumed
to be where the debtor's principal place of business in
the United States is located; and
``(2) if an affiliate, as defined in section
101(2)(A) of title 11, is not a debtor in a case under
title 11, but the debtor is an affiliate as defined in
subparagraph (B), (C), or (D) of that section, then the
bankruptcy case may be filed in the district in which
the principal place of business of the affiliate with
the greatest assets in the United States is located.''.
(b) Change of Venue.--Section 1412 of title 28, United States
Code, is amended--
(1) by striking ``A'' and inserting the following:
``(a) A''; and
(2) by adding at the end the following:
``(b) The district court of a district in which is filed a
case laying venue in the wrong division or district shall
dismiss, or if it be in the interest of justice, transfer such
case to any district or division in which it could have been
brought.
``(c) Nothing in this chapter shall impair the jurisdiction
of a district court of any matter involving a party who does
not interpose timely and sufficient objection to the venue.
``(d) As used in this section--
``(1) the term ``district court'' includes--
``(A) the bankruptcy judges of each such
court as defined in section 151 of this title;
and
``(B) the District Court of Guam, the
District Court for the Northern Mariana
Islands, and the District Court of the Virgin
Islands, including any bankruptcy judge of each
such court; and
``(2) the term ``district'' includes the territorial
jurisdiction of each such court.''.
SEC. 418. ASSUMPTION AND TERMINATION OF CERTAIN CONTRACTS AND LEASES
(a) Assumption.--Section 365(c) of title 11, United States
Code, is amended--
(1) by inserting ``(1) after ``(c)'';
(2) by redesignating existing paragraphs (1) through
(4) as subparagraphs (A) through (D) respectively;
(3) by redesignating subparagraphs (A) and (B) of
paragraph (1) as clauses (i) and (ii), respectively;
and
(4) by adding at the end the following:
``(2) A debtor in possession may assume, but may not assign,
an executory contract or unexpired lease in the circumstances
described in paragraph (1)(A).''.
(b) Termination.--Clause (i) of section 365(e)(2)(A) of title
11, United States Code, is amended by inserting ``the trustee
seeks to assign such contract or lease and'' before
``applicable law''.
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,
Federal income tax return; or
``(B) a statement made under penalty of
perjury that no balance sheet, statement of
operations, or cash-flow statement has been
prepared and no Federal tax return has been
filed;
``(2) attend, through its senior management personnel
and counsel, meetings scheduled by the court or the
United States trustee, including initial debtor
interviews, scheduling conferences, and meetings of
creditors convened under section 341 unless the court,
after notice and a hearing, waives that requirement
upon a finding of extraordinary and compelling
circumstances;
``(3) timely file all schedules and statements of
financial affairs, unless the court, after notice and a
hearing, grants an extension, which shall not extend
such time period to a date later than 30 days after the
date of the order for relief, absent extraordinary and
compelling circumstances;
``(4) file all postpetition financial and other
reports required by the Federal Rules of Bankruptcy
Procedure or by local rule of the district court;
``(5) subject to section 363(c)(2), maintain
insurance customary and appropriate to the industry;
``(6)(A) timely file tax returns and other required
government filings; and
``(B) subject to section 363(c)(2), timely pay all
taxes entitled to administrative expense priority
except those being contested by appropriate proceedings
being diligently prosecuted; and
``(7) allow the United States trustee, or a
designated representative of the United States trustee,
to inspect the debtor's business premises, books, and
records at reasonable times, after reasonable prior
written notice, unless notice is waived by the debtor.
``(b) The court may extend the time periods specified in
paragraphs (1) and (3) of subsection (a) if the debtor
establishes by clear and convincing evidence that an extension
is justified by circumstances that there are beyond the
debtor's control that were not foreseeable on the date of the
order of relief.''.
(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;
``(C) the debtor establishes by clear and
convincing evidence that an extension is
justified by circumstances beyond the debtor's
control that were not foreseeable on the date
of the order of relief; and
``(D) 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)
or the debtor establishes by clear and convincing evidence that
an extension is justified by circumstances beyond the debtor's
control that were not foreseeable on the date of the order for
relief.''.
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 A TRUSTEE.
(a) Expanded Grounds for Dismissal or Conversion.--Section
1112 of title 11, United States Code, is amended by striking
subsection (b) and inserting the following:
``(b)(1) Except as provided in paragraph (2) of this
subsection, subsection (c) of this section, and section
1104(a)(3), on request of a party in interest, and after notice
and a hearing, the court shall convert a case under this
chapter to a case under chapter 7 or dismiss a case under this
chapter, whichever is in the best interests of the creditors
and the estate, if the movement establishes cause.
``(2) The relief provided in paragraph (1) shall not be
granted if--
``(A) the granting of such relief is not in the best
interests of the creditors or the estate; or
``(B) the debtor, or another party in interest,
objects and establishes that--
``(i) there is reasonable likelihood that a plan will
be confirmed within the time frames established in
section 1121(e) and 1129(e) of this title, or if such
sections do not apply, within such a reasonable period
of time; and
``(ii) 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 omissions;
``(II) the debtor establishes by clear and
convincing evidence that an extension is
justified by circumstances beyond the debtor's
control that were not foreseeable on the date
of the order for relief; and
``(III) that will be cured within a
reasonable period of time fixed by the court.
``(3) The court shall commence the hearing on a motion under
this subsection not later than 30 days after filing of the
motion, and shall decide the motion not later than 15 days
after commencement of such hearing, unless the movant expressly
consents to a continuance for a specific period of time or
compelling circumstances prevent the court from meeting the
time limits established by this paragraph.
``(4) For purposes of this subsection, the term `cause'
includes--
``(A) substantial or continuing loss to or diminution
of the estate and the absence of a reasonable
likelihood of rehabilitation;
``(B) gross mismanagement of the estate;
``(C) failure to maintain appropriate insurance that
poses a risk to the estate or to the public;
``(D) unauthorized use of cash collateral
substantially harmful to 1 or more creditors;
``(E) failure to comply with an order of the court;
``(F) unexcused failure to satisfy timely any filing
or reporting requirement established by this title or
by any rule applicable to a case under this chapter;
``(G) failure to attend the meeting of creditors
convened under section 341(a) or an examination ordered
under rule 2004 of the Federal Rules of Bankruptcy
Procedure without good cause shown by the debtor;
``(H) failure timely to provide information or attend
meetings reasonably requested by the United States
trustee (or the bankruptcy administrator, if any);
``(I) failure timely to pay taxes owed after the date
of the order for relief or to file tax returns due
after the date of the order for relief;
``(J) failure to file a disclosure statement, or to
file or confirm a plan, within the time fixed by this
title or by order of the court;
``(K) failure to pay any fees or charges required
under chapter 123 of title 28;
``(L) revocation of an order of confirmation under
section 1144;
``(M) inability to effectuate substantial
consummation of a confirmed plan;
``(N) material default by the debtor with respect to
a confirmed plan;
``(O) termination of a confirmed plan by reason of
the occurrence of a condition specified in the plan;
and
``(P) failure of the debtor to pay any domestic
support obligation that first becomes payable after the
date of the filing of the petition.
``(5) The court shall commence the hearing on a motion under
this subsection not later than 30 days after filing of the
motion, and shall decide the motion not later than 15 days
after commencement of such hearing, unless the movant expressly
consents to a continuance for a specific period of time or
compelling circumstances prevent the court from meeting the
time limits established by this paragraph.''.
(b) Additional Grounds for Appointment of Trustee.--Section
1104(a) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking ``or'' at the end;
(2) in paragraph (2), by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following:
``(3) if grounds exist to convert or dismiss the case
under section 1112, but the court determines that the
appointment of a trustee or an examiner is in the best
interests of creditors and the estate.''.
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED STATES CODE, WITH
RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of enactment of this
Act, the Administrator of the Small Business Administration, in
consultation with the Attorney General, the Director of the
Executive Office for United States Trustees, and the Director
of the Administrative Office of the United States Courts,
shall--
(1) conduct a study to determine--
(A) the internal and external factors that
cause small businesses, especially sole
proprietorships, to become debtors in cases
under title 11, United States Code, and that
cause certain small businesses to successfully
complete cases under chapter 11 of such title;
and
(B) how Federal laws relating to bankruptcy
may be made more effective and efficient in
assisting small businesses to remain viable;
and
(2) submit to the President pro tempore of the Senate
and the Speaker of the House of Representatives a
report summarizing that study.
SEC. 444. 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. 445. 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.''.
SEC. 446. EFFECT OF SALE OF ASSETS ON EMPLOYEE BENEFITS.
Section 363(b) of title 11, United States Code, is amended by
adding at the end the following:
``(3) The court shall not approve the sale of all or
substantially all the assets of a debtor with 50 or more
employees until the debtor has reported to the court on the
potential adverse impact that such sale is likely to have on
employee benefits, including any pension and health care plans
sponsored by the debtor.''.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.
(a) Technical Amendment Relating to Municipalities.--Section
921(d) of title 11, United States Code, is amended by inserting
``notwithstanding section 301(b)'' before the period at the
end.
(b) Conforming Amendment.--Section 301 of title 11, United
States Code, is amended--
(1) by inserting ``(a)'' before ``A voluntary''; and
(2) by striking the last sentence and inserting the
following:
``(b) The commencement of a voluntary case under a chapter of
this title constitutes an order for relief under such
chapter.''.
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.
Section 901(a) of title 11, United States Code, is amended--
(1) by inserting ``555, 556,'' after ``553,''; and
(2) by inserting ``559, 560, 561, 562,'' after
``557,''.
TITLE VI--BANKRUPTCY DATA
SEC. 601. IMPROVED BANKRUPTCY STATISTICS.
(a) In General.--Chapter 6 of title 28, United States Code,
is amended by adding at the end the following:
``Sec. 159. Bankruptcy statistics
``(a) The clerk of the district court, or the clerk of the
bankruptcy court if one is certified pursuant to section 156(b)
of this title, shall collect statistics regarding debtors who
are individuals with primarily consumer debts seeking relief
under chapters 7, 11, and 13 of title 11. Those statistics
shall be in a standardized format prescribed by the Director of
the Administrative Office of the United States Courts (referred
to in this section as the `Director').
``(b) The Director shall--
``(1) compile the statistics referred to in
subsection (a);
``(2) make the statistics available to the public;
and
``(3) not later than July 1, 2006, and annually
thereafter, prepare, and submit to Congress a report
concerning the information collected under subsection
(a) that contains an analysis of the information.
``(c) The compilation required under subsection (b) shall--
``(1) be itemized, by chapter, with respect to title
11;
``(2) be presented in the aggregate and for each
district; and
``(3) include information concerning--
``(A) the total assets and total liabilities
of the debtors described in subsection (a), and
in each category of assets and liabilities, as
reported in the schedules prescribed pursuant
to section 2075 of this title and filed by
debtors;
``(B) the current monthly income, average
income, and average expenses of debtors as
reported on the schedules and statements that
each such debtor files under sections 521 and
1322 of title 11;
``(C) the aggregate amount of debt discharged
in cases filed during the reporting period,
determined as the difference between the total
amount of debt and obligations of a debtor
reported on the schedules and the amount of
such debt reported in categories which are
predominantly nondischargeable;
``(D) the average period of time between the
date of the filing of the petition and the
closing of the case for cases closed during the
reporting period;
``(E) for cases closed during the reporting
period--
``(i) the number of cases in which a
reaffirmation agreement was filed; and
``(ii)(I) the total number of
reaffirmation agreements filed;
``(II) of those cases in which a
reaffirmation agreement was filed, the
number of cases in which the debtor was
not represented by an attorney; and
``(III) of those cases in which a
reaffirmation agreement was filed, the
number of cases in which the
reaffirmation agreement was approved by
the court;
``(F) with respect to cases filed under
chapter 13 of title 11, for the reporting
period--
``(i)(I) the number of cases in which
a final order was entered determining
the value of property securing a claim
in an amount less than the amount of
the claim; and
``(II) the number of final orders
entered determining the value of
property securing a claim;
``(ii) the number of cases dismissed,
the number of cases dismissed for
failure to make payments under the
plan, the number of cases refiled after
dismissal, and the number of cases in
which the plan was completed,
separately itemized with respect to the
number of modifications made before
completion of the plan, if any; and
``(iii) the number of cases in which
the debtor filed another case during
the 6-year period preceding the filing;
``(G) the number of cases in which creditors
were fined for misconduct and any amount of
punitive damages awarded by the court for
creditor misconduct; and
``(H) the number of cases in which sanctions
under rule 9011 of the Federal Rules of
Bankruptcy Procedure were imposed against
debtor's attorney or damages awarded under such
Rule.''.
(b) Clerical Amendment.--The table of sections for chapter 6
of title 28, United States Code, is amended by adding at the
end the following:
``159. Bankruptcy statistics.''.
(c) Effective Date.--The amendments made by this section
shall take effect 18 months after the date of enactment of this
Act.
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.
(a) Amendment.--Chapter 39 of title 28, United States Code,
is amended by adding at the end the following:
``Sec. 589b. Bankruptcy data
``(a) Rules.--The Attorney General shall, within a reasonable
time after the effective date of this section, issue rules
requiring uniform forms for (and from time to time thereafter
to appropriately modify and approve)--
``(1) final reports by trustees in cases under
chapters 7, 12, and 13 of title 11; and
``(2) periodic reports by debtors in possession or
trustees in cases under chapter 11 of title 11.
``(b) Reports.--Each report referred to in subsection (a)
shall be designed (and the requirements as to place and manner
of filing shall be established) so as to facilitate compilation
of data and maximum possible access of the public, both by
physical inspection at one or more central filing locations,
and by electronic access through the Internet or other
appropriate media.
``(c) Required Information.--The information required to be
filed in the reports referred to in subsection (b) shall be
that which is in the best interests of debtors and creditors,
and in the public interest in reasonable and adequate
information to evaluate the efficiency and practicality of the
Federal bankruptcy system. In issuing rules proposing the forms
referred to in subsection (a), the Attorney General shall
strike the best achievable practical balance between--
``(1) the reasonable needs of the public for
information about the operational results of the
Federal bankruptcy system;
``(2) economy, simplicity, and lack of undue burden
on persons with a duty to file reports; and
``(3) appropriate privacy concerns and safeguards.
``(d) Final Reports.--The uniform forms for final reports
required under subsection (a) for use by trustees under
chapters 7, 12, and 13 of title 11 shall, in addition to such
other matters as are required by law or as the Attorney General
in the discretion of the Attorney General shall propose,
include with respect to a case under such title--
``(1) information about the length of time the case
was pending;
``(2) assets abandoned;
``(3) assets exempted;
``(4) receipts and disbursements of the estate;
``(5) expenses of administration, including for use
under section 707(b), actual costs of administering
cases under chapter 13 of title 11;
``(6) claims asserted;
``(7) claims allowed; and
``(8) distributions to claimants and claims
discharged without payment,
in each case by appropriate category and, in cases under
chapters 12 and 13 of title 11, date of confirmation of the
plan, each modification thereto, and defaults by the debtor in
performance under the plan.
``(e) Periodic Reports.--The uniform forms for periodic
reports required under subsection (a) for use by trustees or
debtors in possession under chapter 11 of title 11 shall, in
addition to such other matters as are required by law or as the
Attorney General in the discretion of the Attorney General
shall propose, include--
``(1) information about the industry classification,
published by the Department of Commerce, for the
businesses conducted by the debtor;
``(2) length of time the case has been pending;
``(3) number of full-time employees as of the date of
the order for relief and at the end of each reporting
period since the case was filed;
``(4) cash receipts, cash disbursements and
profitability of the debtor for the most recent period
and cumulatively since the date of the order for
relief;
``(5) compliance with title 11, whether or not tax
returns and tax payments since the date of the order
for relief have been timely filed and made;
``(6) all professional fees approved by the court in
the case for the most recent period and cumulatively
since the date of the order for relief (separately
reported, for the professional fees incurred by or on
behalf of the debtor, between those that would have
been incurred absent a bankruptcy case and those not);
and
``(7) plans of reorganization filed and confirmed
and, with respect thereto, by class, the recoveries of
the holders, expressed in aggregate dollar values and,
in the case of claims, as a percentage of total claims
of the class allowed.''.
(b) Clerical Amendment.--The table of sections for chapter 39
of title 28, United States Code, is amended by adding at the
end the following:
``589b. Bankruptcy data.''.
SEC. 603. AUDIT PROCEDURES.
(a) In General.--
(1) Establishment of procedures.--The Attorney
General (in judicial districts served by United States
trustees) and the Judicial Conference of the United
States (in judicial districts served by bankruptcy
administrators) shall establish procedures to determine
the accuracy, veracity, and completeness of petitions,
schedules, and other information that the debtor is
required to provide under sections 521 and 1322 of
title 11, United States Code, and, if applicable,
section 111 of such title, in cases filed under chapter
7 or 13 of such title in which the debtor is an
individual. Such audits shall be in accordance with
generally accepted auditing standards and performed by
independent certified public accountants or independent
licensed public accountants, provided that the Attorney
General and the Judicial Conference, as appropriate,
may develop alternative auditing standards not later
than 2 years after the date of enactment of this Act.
(2) Procedures.--Those procedures required by
paragraph (1) shall--
(A) establish a method of selecting
appropriate qualified persons to contract to
perform those audits;
(B) establish a method of randomly selecting
cases to be audited, except that not less than
1 out of every 250 cases in each Federal
judicial district shall be selected for audit;
(C) require audits of schedules of income and
expenses that reflect greater than average
variances from the statistical norm of the
district in which the schedules were filed if
those variances occur by reason of higher
income or higher expenses than the statistical
norm of the district in which the schedules
were filed; and
(D) establish procedures for providing, not
less frequently than annually, public
information concerning the aggregate results of
such audits including the percentage of cases,
by district, in which a material misstatement
of income or expenditures is reported.
(b) Amendments.--Section 586 of title 28, United States Code,
is amended--
(1) in subsection (a), by striking paragraph (6) and
inserting the following:
``(6) make such reports as the Attorney General
directs, including the results of audits performed
under section 603(a) of the Bankruptcy Abuse Prevention
and Consumer Protection Act of 2003;''; and
(2) by adding at the end the following:
``(f)(1) The United States trustee for each district is
authorized to contract with auditors to perform audits in cases
designated by the United States trustee, in accordance with the
procedures established under section 603(a) of the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2003.
``(2)(A) The report of each audit referred to in paragraph
(1) shall be filed with the court and transmitted to the United
States trustee. Each report shall clearly and conspicuously
specify any material misstatement of income or expenditures or
of assets identified by the person performing the audit. In any
case in which a material misstatement of income or expenditures
or of assets has been reported, the clerk of the district court
(or the clerk of the bankruptcy court if one is certified under
section 156(b) of this title) shall give notice of the
misstatement to the creditors in the case.
``(B) If a material misstatement of income or expenditures or
of assets is reported, the United States trustee shall--
``(i) report the material misstatement, if
appropriate, to the United States Attorney pursuant to
section 3057 of title 18; and
``(ii) if advisable, take appropriate action,
including but not limited to commencing an adversary
proceeding to revoke the debtor's discharge pursuant to
section 727(d) of title 11.''.
(c) Amendments to Section 521 of Title 11, U.S.C.--Section
521(a) of title 11, United States Code, as so designated by
section 106, is amended in each of paragraphs (3) and (4) by
inserting ``or an auditor serving under section 586(f) of title
28'' after ``serving in the case''.
(d) Amendments to Section 727 of Title 11, U.S.C.--Section
727(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following:
``(4) the debtor has failed to explain
satisfactorily--
``(A) a material misstatement in an audit
referred to in section 586(f) of title 28; or
``(B) a failure to make available for
inspection all necessary accounts, papers,
documents, financial records, files, and all
other papers, things, or property belonging to
the debtor that are requested for an audit
referred to in section 586(f) of title 28.''.
(e) Effective Date.--The amendments made by this section
shall take effect 18 months after the date of enactment of this
Act.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY DATA.
It is the sense of Congress that--
(1) the national policy of the United States should
be that all data held by bankruptcy clerks in
electronic form, to the extent such data reflects only
public records (as defined in section 107 of title 11,
United States Code), should be released in a usable
electronic form in bulk to the public, subject to such
appropriate privacy concerns and safeguards as Congress
and the Judicial Conference of the United States may
determine; and
(2) there should be established a bankruptcy data
system in which--
(A) a single set of data definitions and
forms are used to collect data nationwide; and
(B) data for any particular bankruptcy case
are aggregated in the same electronic record.
TITLE VII--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 701. 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.
``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
``Sec. 1509. Right of direct access
``(a) A foreign representative may commence a case under
section 1504 by filing directly with the court a petition for
recognition of a foreign proceeding under section 1515.
``(b) If the court grants recognition under section 1515, and
subject to any limitations that the court may impose consistent
with the policy of this chapter--
``(1) the foreign representative has the capacity to
sue and be sued in a court in the United States;
``(2) the foreign representative may apply directly
to a court in the United States for appropriate relief
in that court; and
``(3) a court in the United States shall grant comity
or cooperation to the foreign representative.
``(c) A request for comity or cooperation by a foreign
representative in a court in the United States other than the
court which granted recognition shall be accompanied by a
certified copy of an order granting recognition under section
1517.
``(d) If the court denies recognition under this chapter, the
court may issue any appropriate order necessary to prevent the
foreign representative from obtaining comity or cooperation
from courts in the United States.
``(e) Whether or not the court grants recognition, and
subject to sections 306 and 1510, a foreign representative is
subject to applicable nonbankruptcy law.
``(f) Notwithstanding any other provision of this section,
the failure of a foreign representative to commence a case or
to obtain recognition under this chapter does not affect any
right the foreign representative may have to sue in a court in
the United States to collect or recover a claim which is the
property of the debtor.
``Sec. 1510. Limited jurisdiction
``The sole fact that a foreign representative files a
petition under section 1515 does not subject the foreign
representative to the jurisdiction of any court in the United
States for any other purpose.
``Sec. 1511. Commencement of case under section 301 or 303
``(a) Upon recognition, a foreign representative may
commence--
``(1) an involuntary case under section 303; or
``(2) a voluntary case under section 301 or 302, if
the foreign proceeding is a foreign main proceeding.
``(b) The petition commencing a case under subsection (a)
must be accompanied by a certified copy of an order granting
recognition. The court where the petition for recognition has
been filed must be advised of the foreign representative's
intent to commence a case under subsection (a) prior to such
commencement.
``Sec. 1512. Participation of a foreign representative in a case under
this title
``Upon recognition of a foreign proceeding, the foreign
representative in the recognized proceeding is entitled to
participate as a party in interest in a case regarding the
debtor under this title.
``Sec. 1513. Access of foreign creditors to a case under this title
``(a) Foreign creditors have the same rights regarding the
commencement of, and participation in, a case under this title
as domestic creditors.
``(b)(1) Subsection (a) does not change or codify present law
as to the priority of claims under section 507 or 726, except
that the claim of a foreign creditor under those sections shall
not be given a lower priority than that of general unsecured
claims without priority solely because the holder of such claim
is a foreign creditor.
``(2)(A) Subsection (a) and paragraph (1) do not change or
codify present law as to the allowability of foreign revenue
claims or other foreign public law claims in a proceeding under
this title.
``(B) Allowance and priority as to a foreign tax claim or
other foreign public law claim shall be governed by any
applicable tax treaty of the United States, under the
conditions and circumstances specified therein.
``Sec. 1514. Notification to foreign creditors concerning a case under
this title
``(a) Whenever in a case under this title notice is to be
given to creditors generally or to any class or category of
creditors, such notice shall also be given to the known
creditors generally, or to creditors in the notified class or
category, that do not have addresses in the United States. The
court may order that appropriate steps be taken with a view to
notifying any creditor whose address is not yet known.
``(b) Such notification to creditors with foreign addresses
described in subsection (a) shall be given individually, unless
the court considers that, under the circumstances, some other
form of notification would be more appropriate. No letter or
other formality is required.
``(c) When a notification of commencement of a case is to be
given to foreign creditors, such notification shall--
``(1) indicate the time period for filing proofs of
claim and specify the place for filing such proofs of
claim;
``(2) indicate whether secured creditors need to file
proofs of claim; and
``(3) contain any other information required to be
included in such notification to creditors under this
title and the orders of the court.
``(d) Any rule of procedure or order of the court as to
notice or the filing of a proof of claim shall provide such
additional time to creditors with foreign addresses as is
reasonable under the circumstances.
``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
``Sec. 1515. Application for recognition
``(a) A foreign representative applies to the court for
recognition of a foreign proceeding in which the foreign
representative has been appointed by filing a petition for
recognition.
``(b) A petition for recognition shall be accompanied by--
``(1) a certified copy of the decision commencing
such foreign proceeding and appointing the foreign
representative;
``(2) a certificate from the foreign court affirming
the existence of such foreign proceeding and of the
appointment of the foreign representative; or
``(3) in the absence of evidence referred to in
paragraphs (1) and (2), any other evidence acceptable
to the court of the existence of such foreign
proceeding and of the appointment of the foreign
representative.
``(c) A petition for recognition shall also be accompanied by
a statement identifying all foreign proceedings with respect to
the debtor that are known to the foreign representative.
``(d) The documents referred to in paragraphs (1) and (2) of
subsection (b) shall be translated into English. The court may
require a translation into English of additional documents.
``Sec. 1516. Presumptions concerning recognition
``(a) If the decision or certificate referred to in section
1515(b) indicates that the foreign proceeding is a foreign
proceeding and that the person or body is a foreign
representative, the court is entitled to so presume.
``(b) The court is entitled to presume that documents
submitted in support of the petition for recognition are
authentic, whether or not they have been legalized.
``(c) In the absence of evidence to the contrary, the
debtor's registered office, or habitual residence in the case
of an individual, is presumed to be the center of the debtor's
main interests.
``Sec. 1517. Order granting recognition
``(a) Subject to section 1506, after notice and a hearing, an
order recognizing a foreign proceeding shall be entered if--
``(1) such foreign proceeding for which recognition
is sought is a foreign main proceeding or foreign
nonmain proceeding within the meaning of section 1502;
``(2) the foreign representative applying for
recognition is a person or body; and
``(3) the petition meets the requirements of section
1515.
``(b) Such foreign proceeding shall be recognized--
``(1) as a foreign main proceeding if it is pending
in the country where the debtor has the center of its
main interests; or
``(2) as a foreign nonmain proceeding if the debtor
has an establishment within the meaning of section 1502
in the foreign country where the proceeding is pending.
``(c) A petition for recognition of a foreign proceeding
shall be decided upon at the earliest possible time. Entry of
an order recognizing a foreign proceeding constitutes
recognition under this chapter.
``(d) The provisions of this subchapter do not prevent
modification or termination of recognition if it is shown that
the grounds for granting it were fully or partially lacking or
have ceased to exist, but in considering such action the court
shall give due weight to possible prejudice to parties that
have relied upon the order granting recognition. A case under
this chapter may be closed in the manner prescribed under
section 350.
``Sec. 1518. Subsequent information
``From the time of filing the petition for recognition of a
foreign proceeding, the foreign representative shall file with
the court promptly a notice of change of status concerning--
``(1) any substantial change in the status of such
foreign proceeding or the status of the foreign
representative's appointment; and
``(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign
representative.
``Sec. 1519. Relief that may be granted upon filing petition for
recognition
``(a) From the time of filing a petition for recognition
until the court rules on the petition, the court may, at the
request of the foreign representative, where relief is urgently
needed to protect the assets of the debtor or the interests of
the creditors, grant relief of a provisional nature,
including--
``(1) staying execution against the debtor's assets;
``(2) entrusting the administration or realization of
all or part of the debtor's assets located in the
United States to the foreign representative or another
person authorized by the court, including an examiner,
in order to protect and preserve the value of assets
that, by their nature or because of other
circumstances, are perishable, susceptible to
devaluation or otherwise in jeopardy; and
``(3) any relief referred to in paragraph (3), (4),
or (7) of section 1521(a).
``(b) Unless extended under section 1521(a)(6), the relief
granted under this section terminates when the petition for
recognition is granted.
``(c) It is a ground for denial of relief under this section
that such relief would interfere with the administration of a
foreign main proceeding.
``(d) The court may not enjoin a police or regulatory act of
a governmental unit, including a criminal action or proceeding,
under this section.
``(e) The standards, procedures, and limitations applicable
to an injunction shall apply to relief under this section.
``(f) The exercise of rights not subject to the stay arising
under section 362(a) pursuant to paragraph (6), (7), (17), or
(27) of section 362(b) or pursuant to section 362(n) shall not
be stayed by any order of a court or administrative agency in
any proceeding under this chapter.
``Sec. 1520. Effects of recognition of a foreign main proceeding
``(a) Upon recognition of a foreign proceeding that is a
foreign main proceeding--
``(1) sections 361 and 362 apply with respect to the
debtor and the property of the debtor that is within
the territorial jurisdiction of the United States;
``(2) sections 363, 549, and 552 apply to a transfer
of an interest of the debtor in property that is within
the territorial jurisdiction of the United States to
the same extent that the sections would apply to
property of an estate;
``(3) unless the court orders otherwise, the foreign
representative may operate the debtor's business and
may exercise the rights and powers of a trustee under
and to the extent provided by sections 363 and 552; and
``(4) section 552 applies to property of the debtor
that is within the territorial jurisdiction of the
United States.
``(b) Subsection (a) does not affect the right to commence an
individual action or proceeding in a foreign country to the
extent necessary to preserve a claim against the debtor.
``(c) Subsection (a) does not affect the right of a foreign
representative or an entity to file a petition commencing a
case under this title or the right of any party to file claims
or take other proper actions in such a case.
``Sec. 1521. Relief that may be granted upon recognition
``(a) Upon recognition of a foreign proceeding, whether main
or nonmain, where necessary to effectuate the purpose of this
chapter and to protect the assets of the debtor or the
interests of the creditors, the court may, at the request of
the foreign representative, grant any appropriate relief,
including--
``(1) staying the commencement or continuation of an
individual action or proceeding concerning the debtor's
assets, rights, obligations or liabilities to the
extent they have not been stayed under section 1520(a);
``(2) staying execution against the debtor's assets
to the extent it has not been stayed under section
1520(a);
``(3) suspending the right to transfer, encumber or
otherwise dispose of any assets of the debtor to the
extent this right has not been suspended under section
1520(a);
``(4) providing for the examination of witnesses, the
taking of evidence or the delivery of information
concerning the debtor's assets, affairs, rights,
obligations or liabilities;
``(5) entrusting the administration or realization of
all or part of the debtor's assets within the
territorial jurisdiction of the United States to the
foreign representative or another person, including an
examiner, authorized by the court;
``(6) extending relief granted under section 1519(a);
and
``(7) granting any additional relief that may be
available to a trustee, except for relief available
under sections 522, 544, 545, 547, 548, 550, and
724(a).
``(b) Upon recognition of a foreign proceeding, whether main
or nonmain, the court may, at the request of the foreign
representative, entrust the distribution of all or part of the
debtor's assets located in the United States to the foreign
representative or another person, including an examiner,
authorized by the court, provided that the court is satisfied
that the interests of creditors in the United States are
sufficiently protected.
``(c) In granting relief under this section to a
representative of a foreign nonmain proceeding, the court must
be satisfied that the relief relates to assets that, under the
law of the United States, should be administered in the foreign
nonmain proceeding or concerns information required in that
proceeding.
``(d) The court may not enjoin a police or regulatory act of
a governmental unit, including a criminal action or proceeding,
under this section.
``(e) The standards, procedures, and limitations applicable
to an injunction shall apply to relief under paragraphs (1),
(2), (3), and (6) of subsection (a).
``(f) The exercise of rights not subject to the stay arising
under section 362(a) pursuant to paragraph (6), (7), (17), or
(27) of section 362(b) or pursuant to section 362(n) shall not
be stayed by any order of a court or administrative agency in
any proceeding under this chapter.
``Sec. 1522. Protection of creditors and other interested persons
``(a) The court may grant relief under section 1519 or 1521,
or may modify or terminate relief under subsection (c), only if
the interests of the creditors and other interested entities,
including the debtor, are sufficiently protected.
``(b) The court may subject relief granted under section 1519
or 1521, or the operation of the debtor's business under
section 1520(a)(3), to conditions it considers appropriate,
including the giving of security or the filing of a bond.
``(c) The court may, at the request of the foreign
representative or an entity affected by relief granted under
section 1519 or 1521, or at its own motion, modify or terminate
such relief.
``(d) Section 1104(d) shall apply to the appointment of an
examiner under this chapter. Any examiner shall comply with the
qualification requirements imposed on a trustee by section 322.
``Sec. 1523. Actions to avoid acts detrimental to creditors
``(a) Upon recognition of a foreign proceeding, the foreign
representative has standing in a case concerning the debtor
pending under another chapter of this title to initiate actions
under sections 522, 544, 545, 547, 548, 550, 553, and 724(a).
``(b) When a foreign proceeding is a foreign nonmain
proceeding, the court must be satisfied that an action under
subsection (a) relates to assets that, under United States law,
should be administered in the foreign nonmain proceeding.
``Sec. 1524. Intervention by a foreign representative
``Upon recognition of a foreign proceeding, the foreign
representative may intervene in any proceedings in a State or
Federal court in the United States in which the debtor is a
party.
``SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN
REPRESENTATIVES
``Sec. 1525. Cooperation and direct communication between the court and
foreign courts or foreign representatives
``(a) Consistent with section 1501, the court shall cooperate
to the maximum extent possible with a foreign court or a
foreign representative, either directly or through the trustee.
``(b) The court is entitled to communicate directly with, or
to request information or assistance directly from, a foreign
court or a foreign representative, subject to the rights of a
party in interest to notice and participation.
``Sec. 1526. Cooperation and direct communication between the trustee
and foreign courts or foreign representatives
``(a) Consistent with section 1501, the trustee or other
person, including an examiner, authorized by the court, shall,
subject to the supervision of the court, cooperate to the
maximum extent possible with a foreign court or a foreign
representative.
``(b) The trustee or other person, including an examiner,
authorized by the court is entitled, subject to the supervision
of the court, to communicate directly with a foreign court or a
foreign representative.
``Sec. 1527. Forms of cooperation
``Cooperation referred to in sections 1525 and 1526 may be
implemented by any appropriate means, including--
``(1) appointment of a person or body, including an
examiner, to act at the direction of the court;
``(2) communication of information by any means
considered appropriate by the court;
``(3) coordination of the administration and
supervision of the debtor's assets and affairs;
``(4) approval or implementation of agreements
concerning the coordination of proceedings; and
``(5) coordination of concurrent proceedings
regarding the same debtor.
``SUBCHAPTER V--CONCURRENT PROCEEDINGS
``Sec. 1528. Commencement of a case under this title after recognition
of a foreign main proceeding
``After recognition of a foreign main proceeding, a case
under another chapter of this title may be commenced only if
the debtor has assets in the United States. The effects of such
case shall be restricted to the assets of the debtor that are
within the territorial jurisdiction of the United States and,
to the extent necessary to implement cooperation and
coordination under sections 1525, 1526, and 1527, to other
assets of the debtor that are within the jurisdiction of the
court under sections 541(a) of this title, and 1334(e) of title
28, to the extent that such other assets are not subject to the
jurisdiction and control of a foreign proceeding that has been
recognized under this chapter.
``Sec. 1529. Coordination of a case under this title and a foreign
proceeding
``If a foreign proceeding and a case under another chapter of
this title are pending concurrently regarding the same debtor,
the court shall seek cooperation and coordination under
sections 1525, 1526, and 1527, and the following shall apply:
``(1) If the case in the United States pending at the
time the petition for recognition of such foreign
proceeding is filed--
``(A) any relief granted under section 1519
or 1521 must be consistent with the relief
granted in the case in the United States; and
``(B) section 1520 does not apply even if
such foreign proceeding is recognized as a
foreign main proceeding.
``(2) If a case in the United States under this title
commences after recognition, or after the date of the
filing of the petition for recognition, of such foreign
proceeding--
``(A) any relief in effect under section 1519
or 1521 shall be reviewed by the court and
shall be modified or terminated if inconsistent
with the case in the United States; and
``(B) if such foreign proceeding is a foreign
main proceeding, the stay and suspension
referred to in section 1520(a) shall be
modified or terminated if inconsistent with the
relief granted in the case in the United
States.
``(3) In granting, extending, or modifying relief
granted to a representative of a foreign nonmain
proceeding, the court must be satisfied that the relief
relates to assets that, under the laws of the United
States, should be administered in the foreign nonmain
proceeding or concerns information required in that
proceeding.
``(4) In achieving cooperation and coordination under
sections 1528 and 1529, the court may grant any of the
relief authorized under section 305.
``Sec. 1530. Coordination of more than 1 foreign proceeding
``In matters referred to in section 1501, with respect to
more than 1 foreign proceeding regarding the debtor, the court
shall seek cooperation and coordination under sections 1525,
1526, and 1527, and the following shall apply:
``(1) Any relief granted under section 1519 or 1521
to a representative of a foreign nonmain proceeding
after recognition of a foreign main proceeding must be
consistent with the foreign main proceeding.
``(2) If a foreign main proceeding is recognized
after recognition, or after the filing of a petition
for recognition, of a foreign nonmain proceeding, any
relief in effect under section 1519 or 1521 shall be
reviewed by the court and shall be modified or
terminated if inconsistent with the foreign main
proceeding.
``(3) If, after recognition of a foreign nonmain
proceeding, another foreign nonmain proceeding is
recognized, the court shall grant, modify, or terminate
relief for the purpose of facilitating coordination of
the proceedings.
``Sec. 1531. Presumption of insolvency based on recognition of a
foreign main proceeding
``In the absence of evidence to the contrary, recognition of
a foreign main proceeding is, for the purpose of commencing a
proceeding under section 303, proof that the debtor is
generally not paying its debts as such debts become due.
``Sec. 1532. Rule of payment in concurrent proceedings
``Without prejudice to secured claims or rights in rem, a
creditor who has received payment with respect to its claim in
a foreign proceeding pursuant to a law relating to insolvency
may not receive a payment for the same claim in a case under
any other chapter of this title regarding the debtor, so long
as the payment to other creditors of the same class is
proportionately less than the payment the creditor has already
received.''.
(b) Clerical Amendment.--The table of chapters for title 11,
United States Code, is amended by inserting after the item
relating to chapter 13 the following:
``15. Ancillary and Other Cross-Border Cases.....................1501''.
SEC. 702. 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 VII--FINANCIAL CONTRACT PROVISIONS
SEC. 801. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS
OF INSURED DEPOSITORY INSTITUTIONS.
(a) Definition of Qualified Financial Contract.--Section
11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)) is amended--
(1) by striking ``subsection--'' and inserting
``subsection, the following definitions shall apply:'';
and
(2) in clause (i), by inserting ``, resolution, or
order'' after ``any similar agreement that the
Corporation determines by regulation''.
(b) Definition of Securities Contract.--Section
11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(ii)) is amended to read as follows:
``(ii) Securities contract.--The term
`securities contract'--
``(I) means a contract for
the purchase, sale, or loan of
a security, a certificate of
deposit, a mortgage loan, or
any interest in a mortgage
loan, a group or index of
securities, certificates of
deposit, or mortgage loans or
interests therein (including
any interest therein or based
on the value thereof) or any
option on any of the foregoing,
including any option to
purchase or sell any such
security, certificate of
deposit, mortgage loan,
interest, group or index, or
option, and including any
repurchase or reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(II) does not include any
purchase, sale, or repurchase
obligation under a
participation in a commercial
mortgage loan unless the
Corporation determines by
regulation, resolution, or
order to include any such
agreement within the meaning of
such term;
``(III) means any option
entered into on a national
securities exchange relating to
foreign currencies;
``(IV) means the guarantee by
or to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
certificates of deposit, or
mortgage loans or interests
therein (including any interest
therein or based on the value
thereof) or option on any of
the foregoing, including any
option to purchase or sell any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(V) means any margin loan;
``(VI) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
``(VII) means any combination
of the agreements or
transactions referred to in
this clause;
``(VIII) means any option to
enter into any agreement or
transaction referred to in this
clause;
``(IX) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
or (VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
securities contract under this
clause, except that the master
agreement shall be considered
to be a securities contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (III), (IV),
(V), (VI), (VII), or (VIII);
and
``(X) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause, including any guarantee
or reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.''.
(c) Definition of Commodity Contract.--Section
11(e)(8)(D)(iii) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(iii)) is amended to read as follows:
``(iii) Commodity contract.--The term
`commodity contract' means--
``(I) with respect to a
futures commission merchant, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade;
``(II) with respect to a
foreign futures commission
merchant, a foreign future;
``(III) with respect to a
leverage transaction merchant,
a leverage transaction;
``(IV) with respect to a
clearing organization, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing organization,
or commodity option traded on,
or subject to the rules of, a
contract market or board of
trade that is cleared by such
clearing organization;
``(V) with respect to a
commodity options dealer, a
commodity option;
``(VI) any other agreement or
transaction that is similar to
any agreement or transaction
referred to in this clause;
``(VII) any combination of
the agreements or transactions
referred to in this clause;
``(VIII) any option to enter
into any agreement or
transaction referred to in this
clause;
``(IX) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII); or
``(X) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.''.
(d) Definition of Forward Contract.--Section 11(e)(8)(D)(iv)
of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(iv)) is amended to read as follows:
``(iv) Forward contract.--The term
`forward contract' means--
``(I) a contract (other than
a commodity contract) for the
purchase, sale, or transfer of
a commodity or any similar
good, article, service, right,
or interest which is presently
or in the future becomes the
subject of dealing in the
forward contract trade, or
product or byproduct thereof,
with a maturity date more than
2 days after the date the
contract is entered into,
including, a repurchase
transaction, reverse repurchase
transaction, consignment,
lease, swap, hedge transaction,
deposit, loan, option,
allocated transaction,
unallocated transaction, or any
other similar agreement;
``(II) any combination of
agreements or transactions
referred to in subclauses (I)
and (III);
``(III) any option to enter
into any agreement or
transaction referred to in
subclause (I) or (II);
``(IV) a master agreement
that provides for an agreement
or transaction referred to in
subclauses (I), (II), or (III),
together with all supplements
to any such master agreement,
without regard to whether the
master agreement provides for
an agreement or transaction
that is not a forward contract
under this clause, except that
the master agreement shall be
considered to be a forward
contract under this clause only
with respect to each agreement
or transaction under the master
agreement that is referred to
in subclause (I), (II), or
(III); or
``(V) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in subclause (I),
(II), (III), or (IV), including
any guarantee or reimbursement
obligation in connection with
any agreement or transaction
referred to in any such
subclause.''.
(e) Definition of Repurchase Agreement.--Section
11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(v)) is amended to read as follows:
``(v) Repurchase agreement.--The term
`repurchase agreement' (which
definition also applies to a reverse
repurchase agreement)--
``(I) means an agreement,
including related terms, which
provides for the transfer of
one or more certificates of
deposit, mortgage-related
securities (as such term is
defined in the Securities
Exchange Act of 1934), mortgage
loans, interests in mortgage-
related securities or mortgage
loans, eligible bankers'
acceptances, qualified foreign
government securities or
securities that are direct
obligations of, or that are
fully guaranteed by, the United
States or any agency of the
United States against the
transfer of funds by the
transferee of such certificates
of deposit, eligible bankers'
acceptances, securities,
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).''.
(f) Definition of Swap Agreement.--Section 11(e)(8)(D)(vi) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi))
is amended to read as follows:
``(vi) Swap agreement.--The term
`swap agreement' means--
``(I) any agreement,
including the terms and
conditions incorporated by
reference in any such
agreement, which is an interest
rate swap, option, future, or
forward agreement, including a
rate floor, rate cap, rate
collar, cross-currency rate
swap, and basis swap; a spot,
same day-tomorrow, tomorrow-
next, forward, or other foreign
exchange or precious metals
agreement; a currency swap,
option, future, or forward
agreement; an equity index or
equity swap, option, future, or
forward agreement; a debt index
or debt swap, option, future,
or forward agreement; a 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.--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.''.
(h) Treatment of Qualified Financial Contracts.--Section
11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)) is amended--
(1) in subparagraph (A)--
(A) by striking ``paragraph (10)'' and
inserting ``paragraphs (9) and (10)'';
(B) in clause (i), by striking ``to cause the
termination or liquidation'' and inserting
``such person has to cause the termination,
liquidation, or acceleration''; and
(C) by striking clause (ii) and inserting the
following:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to one or
more qualified financial contracts
described in clause (i);''; and
(2) in subparagraph (E), by striking clause (ii) and
inserting the following:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to one or
more qualified financial contracts
described in clause (i);''.
(i) Avoidance of Transfers.--Section 11(e)(8)(C)(i) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is
amended by inserting ``section 5242 of the Revised Statutes of
the United States or any other Federal or State law relating to
the avoidance of preferential or fraudulent transfers,'' before
``the Corporation''.
SEC. 802. AUTHORITY OF THE CORPORATION WITH RESPECT TO FAILED AND
FAILING INSTITUTIONS.
(a) In General.--Section 11(e)(8) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(1) in subparagraph (E), by striking ``other than
paragraph (12) of this subsection, subsection (d)(9)''
and inserting ``other than subsections (d)(9) and
(e)(10)''; and
(2) by adding at the end the following new
subparagraphs:
``(F) Clarification.--No provision of law
shall be construed as limiting the right or
power of the Corporation, or authorizing any
court or agency to limit or delay, in any
manner, the right or power of the Corporation
to transfer any qualified financial contract in
accordance with paragraphs (9) and (10) of this
subsection or to disaffirm or repudiate any
such contract in accordance with subsection
(e)(1) of this section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, no walkaway
clause shall be enforceable in a
qualified financial contract of an
insured depository institution in
default.
``(ii) Walkaway clause defined.--For
purposes of this subparagraph, the term
`walkaway clause' means a provision in
a qualified financial contract that,
after calculation of a value of a
party's position or an amount due to or
from 1 of the parties in accordance
with its terms upon termination,
liquidation, or acceleration of the
qualified financial contract, either
does not create a payment obligation of
a party or extinguishes a payment
obligation of a party in whole or in
part solely because of such party's
status as a nondefaulting party.''.
(b) Technical and Conforming Amendment.--Section 11(e)(12)(A)
of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(12)(A))
is amended by inserting ``or the exercise of rights or powers
by'' after ``the appointment of''.
SEC. 803. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL
CONTRACTS.
(a) Transfers of Qualified Financial Contracts to Financial
Institutions.--Section 11(e)(9) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(9)) is amended to read as
follows:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer of
assets or liabilities of a depository
institution in default which includes any
qualified financial contract, the conservator
or receiver for such depository institution
shall either--
``(i) transfer to one financial
institution, other than a financial
institution for which a conservator,
receiver, trustee in bankruptcy, or
other legal custodian has been
appointed or which is otherwise the
subject of a bankruptcy or insolvency
proceeding--
``(I) all qualified financial
contracts between any person or
any affiliate of such person
and the depository institution
in default;
``(II) all claims of such
person or any affiliate of such
person against such depository
institution under any such
contract (other than any claim
which, under the terms of any
such contract, is subordinated
to the claims of general
unsecured creditors of such
institution);
``(III) all claims of such
depository institution against
such person or any affiliate of
such person under any such
contract; and
``(IV) all property securing
or any other credit enhancement
for any contract described in
subclause (I) or any claim
described in subclause (II) or
(III) under any such contract;
or
``(ii) transfer none of the qualified
financial contracts, claims, property
or other credit enhancement referred to
in clause (i) (with respect to such
person and any affiliate of such
person).
``(B) Transfer to foreign bank, foreign
financial institution, or branch or agency of a
foreign bank or financial institution.--In
transferring any qualified financial 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.''.
(b) Notice to Qualified Financial Contract Counterparties.--
Section 11(e)(10)(A) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(10)(A)) is amended in the material immediately
following clause (ii) by striking ``the conservator'' and all
that follows through the period and inserting the following:
``the conservator or receiver shall notify any person who is a
party to any such contract of such transfer by 5:00 p.m.
(eastern time) on the business day following the date of the
appointment of the receiver in the case of a receivership, or
the business day following such transfer in the case of a
conservatorship.''.
(c) Rights Against Receiver and Treatment of Bridge Banks.--
Section 11(e)(10) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(10)) is amended--
(1) by redesignating subparagraph (B) as subparagraph
(D); and
(2) by inserting after subparagraph (A) the following
new subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is
a party to a qualified financial
contract with an insured depository
institution may not exercise any right
that such person has to terminate,
liquidate, or net such contract under
paragraph (8)(A) of this subsection or
section 403 or 404 of the Federal
Deposit Insurance Corporation
Improvement Act of 1991, solely by
reason of or incidental to the
appointment of a receiver for the
depository institution (or the
insolvency or financial condition of
the depository institution for which
the receiver has been appointed)--
``(I) until 5:00 p.m.
(eastern time) on the business
day following the date of the
appointment of the receiver; or
``(II) after the person has
received notice that the
contract has been transferred
pursuant to paragraph (9)(A).
``(ii) Conservatorship.--A person who
is a party to a qualified financial
contract with an insured depository
institution may not exercise any right
that such person has to terminate,
liquidate, or net such contract under
paragraph (8)(E) of this subsection or
section 403 or 404 of the Federal
Deposit Insurance Corporation
Improvement Act of 1991, solely by
reason of or incidental to the
appointment of a conservator for the
depository institution (or the
insolvency or financial condition of
the depository institution for which
the conservator has been appointed).
``(iii) Notice.--For purposes of this
paragraph, the Corporation as receiver
or conservator of an insured depository
institution shall be deemed to have
notified a person who is a party to a
qualified financial contract with such
depository institution if the
Corporation has taken steps reasonably
calculated to provide notice to such
person by the time specified in
subparagraph (A).
``(C) Treatment of bridge banks.--The
following institutions shall not be considered
to be a financial institution for which a
conservator, receiver, trustee in bankruptcy,
or other legal custodian has been appointed or
which is otherwise the subject of a bankruptcy
or insolvency proceeding for purposes of
paragraph (9):
``(i) A bridge bank.
``(ii) A depository institution
organized by the Corporation, for which
a conservator is appointed either--
``(I) immediately upon the
organization of the
institution; or
``(II) at the time of a
purchase and assumption
transaction between the
depository institution and the
Corporation as receiver for a
depository institution in
default.''.
SEC. 804. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF
QUALIFIED FINANCIAL CONTRACTS.
Section 11(e) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)) is amended--
(1) by redesignating paragraphs (11) through (15) as
paragraphs (12) through (16), respectively;
(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.''.
SEC. 805. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.
Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as follows:
``(vii) Treatment of master agreement
as one agreement.--Any master agreement
for any contract or agreement described
in any preceding clause of this
subparagraph (or any master agreement
for such master agreement or
agreements), together with all
supplements to such master agreement,
shall be treated as a single agreement
and a single qualified financial
contract. If a master agreement
contains provisions relating to
agreements or transactions that are not
themselves qualified financial
contracts, the master agreement shall
be deemed to be a qualified financial
contract only with respect to those
transactions that are themselves
qualified financial contracts.''.
SEC. 806. 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
or any order authorized under section 5(b)(2) of the Securities
Investor Protection Act of 1970), the covered contractual
payment obligations and the covered contractual payment
entitlements between any 2 financial institutions shall be
netted in accordance with, and subject to the conditions of,
the terms of any applicable netting contract (except as
provided in section 561(b)(2) of title 11, United States
Code).''; and
(2) by adding at the end the following new
subsection:
``(f) Enforceability of Security Agreements.--The provisions
of any security agreement or arrangement or other credit
enhancement related to one or more netting contracts between
any 2 financial institutions shall be enforceable in accordance
with their terms (except as provided in section 561(b)(2) of
title 11, United States Code), and shall not be stayed,
avoided, or otherwise limited by any State or Federal law
(other than paragraphs (8)(E), (8)(F), and (10)(B) of section
11(e) of the Federal Deposit Insurance Act and section 5(b)(2)
of the Securities Investor Protection Act of 1970).''.
(c) Enforceability of Clearing Organization Netting
Contracts.--Section 404 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4404) is
amended--
(1) by striking subsection (a) and inserting the
following:
``(a) General Rule.--Notwithstanding any other provision of
State or Federal law (other than paragraphs (8)(E), (8)(F), and
(10)(B) of section 11(e) of the Federal Deposit Insurance Act
and any order authorized under section 5(b)(2) of the
Securities Investor Protection Act of 1970), the covered
contractual payment obligations and the covered contractual
payment entitlements of a member of a clearing organization to
and from all other members of a clearing organization shall be
netted in accordance with and subject to the conditions of any
applicable netting contract (except as provided in section
561(b)(2) of title 11, United States Code).''; and
(2) by adding at the end the following new
subsection:
``(h) Enforceability of Security Agreements.--The provisions
of any security agreement or arrangement or other credit
enhancement related to one or more netting contracts between
any 2 members of a clearing organization shall be enforceable
in accordance with their terms (except as provided in section
561(b)(2) of title 11, United States Code), and shall not be
stayed, avoided, or otherwise limited by any State or Federal
law (other than paragraphs (8)(E), (8)(F), and (10)(B) of
section 11(e) of the Federal Deposit Insurance Act and section
5(b)(2) of the Securities Investor Protection Act of 1970).''.
(d) Enforceability of Contracts With Uninsured National
Banks, Uninsured Federal Branches and Agencies, Certain
Uninsured State Member Banks, and Edge Act Corporations.--The
Federal Deposit Insurance Corporation Improvement Act of 1991
(12 U.S.C. 4401 et seq.) is amended--
(1) by redesignating section 407 as section 407A; and
(2) by inserting after section 406 the following new
section:
``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS,
UNINSURED FEDERAL BRANCHES AND AGENCIES, CERTAIN
UNINSURED STATE MEMBER BANKS, AND EDGE ACT
CORPORATIONS.
``(a) In General.--Notwithstanding any other provision of
law, paragraphs (8), (9), (10), and (11) of section 11(e) of
the Federal Deposit Insurance Act shall apply to an uninsured
national bank or uninsured Federal branch or Federal agency, a
corporation chartered under section 25A of the Federal Reserve
Act, or an uninsured State member bank which operates, or
operates as, a multilateral clearing organization pursuant to
section 409 of this Act, except that for such purpose--
``(1) any reference to the `Corporation as receiver'
or `the receiver or the Corporation' shall refer to the
receiver appointed by the Comptroller of the Currency
in the case of an uninsured national bank or uninsured
Federal branch or agency, or to the receiver appointed
by the Board of Governors of the Federal Reserve System
in the case of a corporation chartered under section
25A of the Federal Reserve Act or an uninsured State
member bank;
``(2) any reference to the `Corporation' (other than
in section 11(e)(8)(D) of such Act), the `Corporation,
whether acting as such or as conservator or receiver',
a `receiver', or a `conservator' shall refer to the
receiver or conservator appointed by the Comptroller of
the Currency in the case of an uninsured national bank
or uninsured Federal branch or agency, or to the
receiver or conservator appointed by the Board of
Governors of the Federal Reserve System in the case of
a corporation chartered under section 25A of the
Federal Reserve Act or an uninsured State member bank;
and
``(3) any reference to an `insured depository
institution' or `depository institution' shall refer to
an uninsured national bank, an uninsured Federal branch
or Federal agency, a corporation chartered under
section 25A of the Federal Reserve Act, or an uninsured
State member bank which operates, or operates as, a
multilateral clearing organization pursuant to section
409 of this Act.
``(b) Liability.--The liability of a receiver or conservator
of an uninsured national bank, uninsured Federal branch or
agency, a corporation chartered under section 25A of the
Federal Reserve Act, or an uninsured State member bank which
operates, or operates as, a multilateral clearing organization
pursuant to section 409 of this Act, shall be determined in the
same manner and subject to the same limitations that apply to
receivers and conservators of insured depository institutions
under section 11(e) of the Federal Deposit Insurance Act.
``(c) Regulatory Authority.--
``(1) In general.--The Comptroller of the Currency in
the case of an uninsured national bank or uninsured
Federal branch or agency and the Board of Governors of
the Federal Reserve System in the case of a corporation
chartered under section 25A of the Federal Reserve Act,
or an uninsured State member bank that operates, or
operates as, a multilateral clearing organization
pursuant to section 409 of this Act, in consultation
with the Federal Deposit Insurance Corporation, may
each promulgate regulations solely to implement this
section.
``(2) Specific requirement.--In promulgating
regulations, limited solely to implementing paragraphs
(8), (9), (10), and (11) of section 11(e) of the
Federal Deposit Insurance Act, the Comptroller of the
Currency and the Board of Governors of the Federal
Reserve System each shall ensure that the regulations
generally are consistent with the regulations and
policies of the Federal Deposit Insurance Corporation
adopted pursuant to the Federal Deposit Insurance Act.
``(d) Definitions.--For purposes of this section, the terms
`Federal branch', `Federal agency', and `foreign bank' have the
same meanings as in section 1(b) of the International Banking
Act of 1978.''.
SEC. 807. 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 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, or
receiver or conservator for such entity and,
when any such Federal reserve bank, receiver,
conservator or entity is acting as agent or
custodian for a customer in connection with a
securities contract (as defined in section 741)
such customer; or
``(B) in connection with a securities
contract (as defined in section 741) an
investment company registered under the
Investment Company Act of 1940;'';
(2) by inserting after paragraph (22) the following:
``(22A) `financial participant' means--
``(A) an entity that, at the time it enters
into a securities contract, commodity contract,
swap agreement, repurchase agreement, or
forward contract, or at the time of the date of
the filing of the petition, has one or more
agreements or transactions described in
paragraph (1), (2), (3), (4), (5), or (6) of
section 561(a) with the debtor or any other
entity (other than an affiliate) of a total
gross dollar value of not less than
$1,000,000,000 in notional or actual principal
amount outstanding on any day during the
previous 15-month period, or has gross mark-to-
market positions of not less than $100,000,000
(aggregated across counterparties) in one or
more such agreements or transactions with the
debtor or any other entity (other than an
affiliate) on any day during the previous 15-
month period; or
``(B) a clearing organization (as defined in
section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991);''; and
(3) by striking paragraph (26) and inserting the
following:
``(26) `forward contract merchant' means a Federal
reserve bank, or an entity the business of which
consists in whole or in part of entering into forward
contracts as or with merchants in a commodity (as
defined in section 761) or any similar good, article,
service, right, or interest which is presently or in
the future becomes the subject of dealing in the
forward contract trade;''.
(c) Definition of Master Netting Agreement and Master Netting
Agreement Participant.--Section 101 of title 11, United States
Code, is amended by inserting after paragraph (38) the
following new paragraphs:
``(38A) `master netting agreement'--
``(A) means an agreement providing for the
exercise of rights, including rights of
netting, setoff, liquidation, termination,
acceleration, or close out, under or in
connection with one or more contracts that are
described in any one or more of paragraphs (1)
through (5) of section 561(a), or any security
agreement or arrangement or other credit
enhancement related to one or more of the
foregoing, including any guarantee or
reimbursement obligation related to 1 or more
of the foregoing; and
``(B) if the agreement contains provisions
relating to agreements or transactions that are
not contracts described in paragraphs (1)
through (5) of section 561(a), shall be deemed
to be a master netting agreement only with
respect to those agreements or transactions
that are described in any one or more of
paragraphs (1) through (5) of section 561(a);
``(38B) `master netting agreement participant' means
an entity that, at any time before the date of the
filing of the petition, is a party to an outstanding
master netting agreement with the debtor;''.
(d) Swap Agreements, Securities Contracts, Commodity
Contracts, Forward Contracts, Repurchase Agreements, and Master
Netting Agreements Under the Automatic-Stay.--
(1) In general.--Section 362(b) of title 11, United
States Code, as amended by sections 224, 303, 311, 401,
and 718, is amended--
(A) in paragraph (6), by inserting ``,
pledged to, under the control of,'' after
``held by'';
(B) in paragraph (7), by inserting ``,
pledged to, under the control of,'' after
``held by'';
(C) by striking paragraph (17) and inserting
the following:
``(17) under subsection (a), of the setoff by a swap
participant or financial participant of a mutual debt
and claim under or in connection with one or more swap
agreements that constitutes the setoff of a claim
against the debtor for any payment or other transfer of
property due from the debtor under or in connection
with any swap agreement against any payment due to the
debtor from the swap participant or financial
participant under or in connection with any swap
agreement or against cash, securities, or other
property held by, pledged to, under the control of, or
due from such swap participant or financial participant
to margin, guarantee, secure, or settle any swap
agreement;''; and
(D) by inserting after paragraph (26) the
following:
``(27) under subsection (a), of the setoff by a
master netting agreement participant of a mutual debt
and claim under or in connection with one or more
master netting agreements or any contract or agreement
subject to such agreements that constitutes the setoff
of a claim against the debtor for any payment or other
transfer of property due from the debtor under or in
connection with such agreements or any contract or
agreement subject to such agreements against any
payment due to the debtor from such master netting
agreement participant under or in connection with such
agreements or any contract or agreement subject to such
agreements or against cash, securities, or other
property held by, pledged to, under the control of, or
due from such master netting agreement participant to
margin, guarantee, secure, or settle such agreements or
any contract or agreement subject to such agreements,
to the extent that such participant is eligible to
exercise such offset rights under paragraph (6), (7),
or (17) for each individual contract covered by the
master netting agreement in issue; and''.
(2) Limitation.--Section 362 of title 11, United
States Code, as amended by sections 106, 305, 311, and
441, is amended by adding at the end the following:
``(o) The exercise of rights not subject to the stay arising
under subsection (a) pursuant to paragraph (6), (7), (17), or
(27) of subsection (b) shall not be stayed by any order of a
court or administrative agency in any proceeding under this
title.''.
(e) Limitation of Avoidance Powers Under Master Netting
Agreement.--Section 546 of title 11, United States Code, is
amended--
(1) in subsection (g) (as added by section 103 of
Public Law 101-311)--
(A) by striking ``under a swap agreement'';
(B) by striking ``in connection with a swap
agreement'' and inserting ``under or in
connection with any swap agreement''; and
(C) by inserting ``or financial participant''
after ``swap participant''; and
(2) by adding at the end the following:
``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B),
and 548(b) the trustee may not avoid a transfer made by or to a
master netting agreement participant under or in connection
with any master netting agreement or any individual contract
covered thereby that is made before the commencement of the
case, except under section 548(a)(1)(A) and except to the
extent that the trustee could otherwise avoid such a transfer
made under an individual contract covered by such master
netting agreement.''.
(f) Fraudulent Transfers of Master Netting Agreements.--
Section 548(d)(2) of title 11, United States Code, is amended--
(1) in subparagraph (C), by striking ``and'' at the
end;
(2) in subparagraph (D), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following new
subparagraph:
``(E) a master netting agreement participant that
receives a transfer in connection with a master netting
agreement or any individual contract covered thereby
takes for value to the extent of such transfer, except
that, with respect to a transfer under any individual
contract covered thereby, to the extent that such
master netting agreement participant otherwise did not
take (or is otherwise not deemed to have taken) such
transfer for value.''.
(g) Termination or Acceleration of Securities Contracts.--
Section 555 of title 11, United States Code, is amended--
(1) by amending the section heading to read as
follows:
``Sec. 555. Contractual right to liquidate, terminate, or accelerate a
securities contract'';
and
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''.
(h) Termination or Acceleration of Commodities or Forward
Contracts.--Section 556 of title 11, United States Code, is
amended--
(1) by amending the section heading to read as
follows:
``Sec. 556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract'';
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''; and
(3) in the second sentence, by striking ``As used''
and all that follows through ``right,'' and inserting
``As used in this section, the term `contractual right'
includes a right set forth in a rule or bylaw of a
derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit
Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities
association, a securities clearing agency, a contract
market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered
under the Commodity Exchange Act, or a board of trade
(as defined in the Commodity Exchange Act) or in a
resolution of the governing board thereof and a
right,''.
(i) Termination or Acceleration of Repurchase Agreements.--
Section 559 of title 11, United States Code, is amended--
(1) by amending the section heading to read as
follows:
``Sec. 559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement'';
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''; and
(3) in the third sentence, by striking ``As used''
and all that follows through ``right,'' and inserting
``As used in this section, the term `contractual right'
includes a right set forth in a rule or bylaw of a
derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit
Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities
association, a securities clearing agency, a contract
market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered
under the Commodity Exchange Act, or a board of trade
(as defined in the Commodity Exchange Act) or in a
resolution of the governing board thereof and a
right,''.
(j) Liquidation, Termination, or Acceleration of Swap
Agreements.--Section 560 of title 11, United States Code, is
amended--
(1) by amending the section heading to read as
follows:
``Sec. 560. Contractual right to liquidate, terminate, or accelerate a
swap agreement'';
(2) in the first sentence, by striking ``termination
of a swap agreement'' and inserting ``liquidation,
termination, or acceleration of one or more swap
agreements'';
(3) by striking ``in connection with any swap
agreement'' and inserting ``in connection with the
termination, liquidation, or acceleration of one or
more swap agreements''; and
(4) in the second sentence, by striking ``As used''
and all that follows through ``right,'' and inserting
``As used in this section, the term `contractual right'
includes a right set forth in a rule or bylaw of a
derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit
Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities
association, a securities clearing agency, a contract
market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered
under the Commodity Exchange Act, or a board of trade
(as defined in the Commodity Exchange Act) or in a
resolution of the governing board thereof and a
right,''.
(k) Liquidation, Termination, Acceleration, or Offset Under a
Master Netting Agreement and Across Contracts.--
(1) In general.--Title 11, United States Code, is
amended by inserting after section 560 the following:
``Sec. 561. Contractual right to terminate, liquidate, accelerate, or
offset under a master netting agreement and across
contracts; proceedings under chapter 15
``(a) Subject to subsection (b), the exercise of any
contractual right, because of a condition of the kind specified
in section 365(e)(1), to cause the termination, liquidation, or
acceleration of or to offset or net termination values, payment
amounts, or other transfer obligations arising under or in
connection with one or more (or the termination, liquidation,
or acceleration of one or more)--
``(1) securities contracts, as defined in section
741(7);
``(2) commodity contracts, as defined in section
761(4);
``(3) forward contracts;
``(4) repurchase agreements;
``(5) swap agreements; or
``(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by operation
of any provision of this title or by any order of a court or
administrative agency in any proceeding under this title.
``(b)(1) A party may exercise a contractual right described
in subsection (a) to terminate, liquidate, or accelerate only
to the extent that such party could exercise such a right under
section 555, 556, 559, or 560 for each individual contract
covered by the master netting agreement in issue.
``(2) If a debtor is a commodity broker subject to subchapter
IV of chapter 7--
``(A) a party may not net or offset an obligation to
the debtor arising under, or in connection with, a
commodity contract traded on or subject to the rules of
a contract market designated under the Commodity
Exchange Act or a derivatives transaction execution
facility registered under the Commodity Exchange Act
against any claim arising under, or in connection with,
other instruments, contracts, or agreements listed in
subsection (a) except to the extent that the party has
positive net equity in the commodity accounts at the
debtor, as calculated under such subchapter; and
``(B) another commodity broker may not net or offset
an obligation to the debtor arising under, or in
connection with, a commodity contract entered into or
held on behalf of a customer of the debtor and traded
on or subject to the rules of a contract market
designated under the Commodity Exchange Act or a
derivatives transaction execution facility registered
under the Commodity Exchange Act against any claim
arising under, or in connection with, other
instruments, contracts, or agreements listed in
subsection (a).
``(3) No provision of subparagraph (A) or (B) of paragraph
(2) shall prohibit the offset of claims and obligations that
arise under--
``(A) a cross-margining agreement or similar
arrangement that has been approved by the Commodity
Futures Trading Commission or submitted to the
Commodity Futures Trading Commission under paragraph
(1) or (2) of section 5c(c) of the Commodity Exchange
Act and has not been abrogated or rendered ineffective
by the Commodity Futures Trading Commission; or
``(B) any other netting agreement between a clearing
organization (as defined in section 761) and another
entity that has been approved by the Commodity Futures
Trading Commission.
``(c) As used in this section, the term `contractual right'
includes a right set forth in a rule or bylaw of a derivatives
clearing organization (as defined in the Commodity Exchange
Act), a multilateral clearing organization (as defined in the
Federal Deposit Insurance Corporation Improvement Act of 1991),
a national securities exchange, a national securities
association, a securities clearing agency, a contract market
designated under the Commodity Exchange Act, a derivatives
transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity
Exchange Act) or in a resolution of the governing board
thereof, and a right, whether or not evidenced in writing,
arising under common law, under law merchant, or by reason of
normal business practice.
``(d) Any provisions of this title relating to securities
contracts, commodity contracts, forward contracts, repurchase
agreements, swap agreements, or master netting agreements shall
apply in a case under chapter 15, so that enforcement of
contractual provisions of such contracts and agreements in
accordance with their terms will not be stayed or otherwise
limited by operation of any provision of this title or by order
of a court in any case under this title, and to limit avoidance
powers to the same extent as in a proceeding under chapter 7 or
11 of this title (such enforcement not to be limited based on
the presence or absence of assets of the debtor in the United
States).''.
(2) Conforming amendment.--The table of sections for
chapter 5 of title 11, United States Code, is amended
by inserting after the item relating to section 560 the
following:
``561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts;
proceedings under chapter 15.''.
(l) Commodity Broker Liquidations.--Title 11, United States
Code, is amended by inserting after section 766 the following:
``Sec. 767. Commodity broker liquidation and forward contract
merchants, commodity brokers, stockbrokers,
financial institutions, financial participants,
securities clearing agencies, swap participants,
repo participants, and master netting agreement
participants
``Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, commodity
broker, stockbroker, financial institution, financial
participant, securities clearing agency, swap participant, repo
participant, or master netting agreement participant under this
title shall not affect the priority of any unsecured claim it
may have after the exercise of such rights.''.
(m) Stockbroker Liquidations.--Title 11, United States Code,
is amended by inserting after section 752 the following:
``Sec. 753. Stockbroker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial
institutions, financial participants, securities
clearing agencies, swap participants, repo
participants, and master netting agreement
participants
``Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, commodity
broker, stockbroker, financial institution, financial
participant, securities clearing agency, swap participant, repo
participant, or master netting agreement participant under this
title shall not affect the priority of any unsecured claim it
may have after the exercise of such rights.''.
(n) Setoff.--Section 553 of title 11, United States Code, is
amended--
(1) in subsection (a)(2)(B)(ii), by inserting before
the semicolon the following: ``(except for a setoff of
a kind described in section 362(b)(6), 362(b)(7),
362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561)'';
(2) in subsection (a)(3)(C), by inserting before the
period the following: ``(except for a setoff of a kind
described in section 362(b)(6), 362(b)(7), 362(b)(17),
362(b)(27), 555, 556, 559, 560, or 561)''; and
(3) in subsection (b)(1), by striking ``362(b)(14),''
and inserting ``362(b)(17), 362(b)(27), 555, 556, 559,
560, 561,''.
(o) Securities Contracts, Commodity Contracts, and Forward
Contracts.--Title 11, United States Code, is amended--
(1) in section 362(b)(6), by striking ``financial
institutions,'' each place such term appears and
inserting ``financial institution, financial
participant,'';
(2) in sections 362(b)(7) and 546(f), by inserting
``or financial participant'' after ``repo participant''
each place such term appears;
(3) in section 546(e), by inserting ``financial
participant,'' after ``financial institution,'';
(4) in section 548(d)(2)(B), by inserting ``financial
participant,'' after ``financial institution,'';
(5) in section 548(d)(2)(C), by inserting ``or
financial participant'' after ``repo participant'';
(6) in section 548(d)(2)(D), by inserting ``or
financial participant'' after ``swap participant'';
(7) in section 555--
(A) by inserting ``financial participant,''
after ``financial institution,''; and
(B) by striking the second sentence and
inserting the following: ``As used in this
section, the term `contractual right' includes
a right set forth in a rule or bylaw of a
derivatives clearing organization (as defined
in the 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. 808. RECORDKEEPING REQUIREMENTS.
Section 11(e)(8) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)) is amended by adding at the end the
following new subparagraph:
``(H) Recordkeeping requirements.--The
Corporation, in consultation with the
appropriate Federal banking agencies, may
prescribe regulations requiring more detailed
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).''.
SEC. 809. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT.
Section 13(e)(2) of the Federal Deposit Insurance Act (12
U.S.C. 1823(e)(2)) is amended to read as follows:
``(2) Exemptions from contemporaneous execution
requirement.--An agreement to provide for the lawful
collateralization of--
``(A) deposits of, or other credit extension
by, a Federal, State, or local governmental
entity, or of any depositor referred to in
section 11(a)(2), including an agreement to
provide collateral in lieu of a surety bond;
``(B) bankruptcy estate funds pursuant to
section 345(b)(2) of title 11, United States
Code;
``(C) extensions of credit, including any
overdraft, from a Federal reserve bank or
Federal home loan bank; or
``(D) one or more qualified financial
contracts, as defined in section 11(e)(8)(D),
shall not be deemed invalid pursuant to paragraph
(1)(B) solely because such agreement was not executed
contemporaneously with the acquisition of the
collateral or because of pledges, delivery, or
substitution of the collateral made in accordance with
such agreement.''.
SEC. 810. 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. 811. 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 IX--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN
SEC. 901. PERMANENT REENACTMENT OF CHAPTER 12.
(a) Reenactment.--
(1) In general.--Chapter 12 of title 11, United
States Code, as reenacted by section 149 of division C
of the Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999 (Public Law 105-277), is
hereby reenacted, and as here reenacted is amended by
this Act.
(2) Effective date.--Subsection (a) shall take effect
on the date of the enactment of this Act.
(b) Conforming Amendment.--Section 302 of the Bankruptcy
Judges, United States Trustees, and Family Farmer Bankruptcy
Act of 1986 (28 U.S.C. 581 note) is amended by striking
subsection (f).
SEC. 902. 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. 903. 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. 904. 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. 905. 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. 906. PROHIBITION OF RETROACTIVE ASSESSMENT OF DISPOSABLE INCOME.
(a) Confirmation of Plan.--Section 1225(b)(1) of title 11,
United States Code, is amended--
(1) in subparagraph (A) by striking ``or'' at the
end;
(2) in subparagraph (B) by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following:
``(C) the value of the property to be distributed
under the plan in the 3-year period, or such longer
period as the court may approve under section 1222(c),
beginning on the date that the first distribution is
due under the plan is not less than the debtor's
projected disposable income for such period.''.
(b) Modification of Plan.--Section 1229 of title 11, United
States Code, is amended by adding at the end the following:
``(d) A plan may not be modified under this section--
``(1) to increase the amount of any payment due
before the plan as modified becomes the plan;
``(2) by anyone except the debtor, based on an
increase in the debtor's disposable income, to increase
the amount of payments to unsecured creditors required
for a particular month so that the aggregate of such
payments exceeds the debtor's disposable income for
such month; or
``(3) in the last year of the plan by anyone except
the debtor, to require payments that would leave the
debtor with insufficient funds to carry on the farming
operation after the plan is completed.''.
SEC. 907. 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 X--HEALTH CARE AND EMPLOYEE BENEFITS
SEC. 1001. 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. 1002. 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. 1003. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING A HEALTH
CARE BUSINESS AND OTHER ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, as amended by
section 445, is amended by adding at the end the following:
``(8) the actual, necessary costs and expenses of
closing a health care business incurred by a trustee or
by a Federal agency (as defined in section 551(1) of
title 5) or a department or agency of a State or
political subdivision thereof, including any cost or
expense incurred--
``(A) in disposing of patient records in
accordance with section 351; or
``(B) in connection with transferring
patients from the health care business that is
in the process of being closed to another
health care business; and''.
SEC. 1004. 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. 1005. 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. 1006. 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 XI--TECHNICAL AMENDMENTS
SEC. 1101. DEFINITIONS.
Section 101 of title 11, United States Code, as hereinbefore
amended by this Act, is amended--
(1) by striking ``In this title--'' and inserting
``In this title the following definitions shall
apply:'';
(2) in each paragraph, by inserting ``The term''
after the paragraph designation;
(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) by inserting ``who is not a
family farmer'' after ``debtor'' the first place it
appears; and
(6) by striking paragraph (54) and inserting the
following:
``(54) The term `transfer' means--
``(A) the creation of a lien;
``(B) the retention of title as a security
interest;
``(C) the foreclosure of a debtor's equity of
redemption; or
``(D) each mode, direct or indirect, absolute
or conditional, voluntary or involuntary, of
disposing of or parting with--
``(i) property; or
``(ii) an interest in property;'';
(7) by indenting the left margin of paragraph (54A) 2
ems to the right; and
(8) in each of paragraphs (1) through (35), in each
of paragraphs (36), (37), (38A), (38B) and (39A), and
in each of paragraphs (40) through (55), by striking
the semicolon at the end and inserting a period.
SEC. 1102. 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. 1103. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is amended
by striking ``922'' and all that follows through ``or'', and
inserting ``922, 1201, or''.
SEC. 1104. 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. 1105. 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. 1106. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.
Section 328(a) of title 11, United States Code, is amended by
inserting ``on a fixed or percentage fee basis,'' after
``hourly basis,''.
SEC. 1107. 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. 1108. 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. 1109. 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. 1110. 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. 1111. PROTECTION AGAINST DISCRIMINATORY TREATMENT.
Section 525(c) of title 11, United States Code, is amended--
(1) in paragraph (1), by inserting ``student'' before
``grant'' the second place it appears; and
(2) in paragraph (2), by striking ``the program
operated under part B, D, or E of'' and inserting ``any
program operated under''.
SEC. 1112. 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. 1113. 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. 1114. 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. 1115. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended by
striking ``1009,''.
SEC. 1116. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, is amended by
inserting ``1123(d),'' after ``1123(b),''.
SEC. 1117. 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. 1118. 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. 1119. 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. 1120. 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. 1121. 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. 1122. AUTHORIZATION FOR ADDITIONAL BANKRUPTCY JUDGSHIPS.
The following judgeships positions shall be filled in the
manner prescribed in section 152(a)(1) of title 28, United
States Code, for the appointment of bankruptcy judges provided
for in section 152(a)(2) of such title:
(1) Two additional bankruptcy judgeships for the
southern district of New York.
(2) Four additional bankruptcy judgeships for the
district of Delaware.
(3) One additional bankruptcy judgeship for the
district of New Jersey.
(4) One additional bankruptcy judgeship for the
eastern district of Pennsylvania.
(5) Three additional bankruptcy judgeships for the
district of Maryland.
(6) One additional bankruptcy judgeship for the
eastern district of North Carolina.
(7) One additional bankruptcy judgeship for the
district of South Carolina.
(8) One additional bankruptcy judgeship for the
eastern district of Virginia.
(9) Two additional bankruptcy judgeships for the
eastern district of Michigan.
(10) Two additional bankruptcy judgeships for the
western district of Tennessee.
(11) One additional bankruptcy judgeship for the
eastern and western districts of Arkansas.
(12) Two additional bankruptcy judgeships for the
district of Nevada.
(13) One additional bankruptcy judgeship for the
district of Utah.
(14) Two additional bankruptcy judgeships for the
middle district of Florida.
(15) Two additional bankruptcy judgeships for the
southern district of Florida.
(16) Two additional bankruptcy judgeships for the
northern district of Georgia.
(17) One additional bankruptcy judgeship for the
southern district of Georgia.
SEC. 1123. TEMPORARY BANKRUPTCY JUDGESHIPS.
(a) Authorization for Additional Temporary Bankruptcy
Judgeships.--The following judgeship positions shall be filled
in the manner prescribed in section 152(a)(1) of title 28,
United States Code, for the appointment of bankruptcy judges
provided for in section 152(a)(2) of such title:
(1) One additional bankruptcy judgeship for the
district of Puerto Rico.
(2) One additional bankruptcy judgeship for the
northern district of New York.
(3) One additional bankruptcy judgeship for the
middle district of Pennsylvania.
(4) One additional bankruptcy judgeship for the
district of Maryland.
(5) One additional bankruptcy judgeship for the
northern district of Mississippi.
(6) One additional bankruptcy judgeship for the
southern district of Mississippi.
(7) One additional bankruptcy judgeship for the
southern district of Georgia.
(b) Vacancies.--
(1) In general.--The first vacancy occurring in the
office of bankruptcy judge in each of the judicial
districts set forth in subsection (a)--
(A) occurring 5 years or more after the
appointment date of the bankruptcy judge
appointed under subsection (a) to such office;
and
(B) resulting from the death, retirement,
resignation, or removal of a bankruptcy judge;
shall not be filled.
(2) Term expiration.--In the case of a vacancy
resulting from the expiration of the term of a
bankruptcy judge not described in paragraph (1), that
judge shall be eligible for reappointment as a
bankruptcy judge in that district.
(c) Extension of Existing Temporary Bankruptcy Judgeships.--
(1) In general.--The temporary bankruptcy judgeships
authorized for the northern district of Alabama and the
eastern district of Tennessee under paragraphs (1) 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 or more after the date of
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 bankruptcy judgeships referred to in this
subsection.
SEC. 1124. TRANSFER OF BANKRUPTCY JUDGESHIP SHARED BY THE MIDDLE
DISTRICT OF GEORGIA AND THE SOUTHERN DISTRICT OF
GEORGIA.
The bankruptcy judgeship presently shared by the southern
district of Georgia and the middle district of Georgia shall be
converted to a bankruptcy judgeship for the middle district of
Georgia.
SEC. 1125. CONVERSION OF EXISTING TEMPORARY BANKRUPTCY JUDGESHIPS.
(a) District of Delaware.--The temporary bankruptcy judgeship
authorized for the district of Delaware pursuant to section 3
of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note),
shall be converted to a permanent bankruptcy judgeship.
(b) District of Puerto Rico.--The temporary bankruptcy
judgeship authorized for the district of Puerto Rico pursuant
to section 3 of the Bankruptcy Judgeship Act of 1992 (28 U.S.C.
152 note), shall be converted to a permanent bankruptcy
judgeship.
SEC. 1126. TECHNICAL AMENDMENTS.
Section 152(a)(2) of title 28, United States Code, is
amended--
(1) in the item relating to the eastern and western
districts of Arkansas, by striking ``3'' and inserting
``4'';
(2) in the item relating to the district of Delaware,
by striking ``1'' and inserting ``6'';
(3) in the item relating to the middle district of
Florida, by striking ``8'' and inserting ``10'';
(4) in the item relating to the southern district of
Florida, by striking ``5'' and inserting ``7'';
(5) in the item relating to the northern district of
Georgia, by striking ``8'' and inserting ``10'';
(6) in the item relating to the middle district of
Georgia, by striking ``2'' and inserting ``3'';
(7) in the item relating to the southern district of
Georgia, by striking ``2'' and inserting ``3'';
(8) in the collective item relating to the middle and
southern districts of Georgia, by striking ``Middle and
Southern . . . . . . 1'';
(9) in the item relating to the district of Maryland,
by striking ``4'' and inserting ``7'';
(10) in the item relating to the eastern district of
Michigan, by striking ``4'' and inserting ``6'';
(11) in the item relating to the district of Nevada,
by striking ``3'' and inserting 5'';
(12) in the item relating to the district of New
Jersey, by striking ``8'' and inserting ``9'';
(13) in the item relating to the southern district of
New York, by striking ``9'' and inserting ``11'';
(14) in the item relating to the eastern district of
North Carolina, by striking ``2'' and inserting ``3'';
(15) in the item relating to the eastern district of
Pennsylvania, by striking ``5'' and inserting ``6'';
(16) in the item relating to the district of Puerto
Rico, by striking ``2 and inserting ``3'';
(17) in the item relating to the district of South
Carolina, by striking ``2'' and inserting ``3'';
(18) in the item relating to the western district of
Tennessee, by striking ``4'' and inserting ``6'';
(19) in the item relating to the district of Utah, by
striking ``3'' and inserting ``4''; and
(20) in the item relating to the eastern district of
Virginia, by striking ``5'' and inserting ``6''.
SEC. 1126. 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. 1126. 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. 1127. 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. 1128. 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. 1127. 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.
(d) The prohibition against the granting of a discharge in
subsection (a) and the prohibition against the confirmation of
a plan of reorganization in subsection (b) shall not apply if
the debtor is unable to provide such tax documents due to
circumstance beyond the debtor s control including the failure
of the taxing authority to provide such documents.
SEC. 1128. 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. 1129. TRUSTEES.
(a) Suspension and Termination of Panel Trustees and Standing
Trustees.--Section 586(d) of title 28, United States Code, is
amended--
(1) by inserting ``(1)'' after ``(d)''; and
(2) by adding at the end the following:
``(2) A trustee whose appointment under subsection (a)(1) or
under subsection (b) is terminated or who ceases to be assigned
to cases filed under title 11, United States Code, may obtain
judicial review of the final agency decision by commencing an
action in the district court of the United States for the
district for which the panel to which the trustee is appointed
under subsection (a)(1), or in the district court of the United
States for the district in which the trustee is appointed under
subsection (b) resides, after first exhausting all available
administrative remedies, which if the trustee so elects, shall
also include an administrative hearing on the record. Unless
the trustee elects to have an administrative hearing on the
record, the trustee shall be deemed to have exhausted all
administrative remedies for purposes of this paragraph if the
agency fails to make a final agency decision within 90 days
after the trustee requests administrative remedies. The
Attorney General shall prescribe procedures to implement this
paragraph. The decision of the agency shall be affirmed by the
district court unless it is unreasonable and without cause
based on the administrative record before the agency.''.
(b) Expenses of Standing Trustees.--Section 586(e) of title
28, United States Code, is amended by adding at the end the
following:
``(3) After first exhausting all available administrative
remedies, an individual appointed under subsection (b) may
obtain judicial review of final agency action to deny a claim
of actual, necessary expenses under this subsection by
commencing an action in the district court of the United States
for the district where the individual resides. The decision of
the agency shall be affirmed by the district court unless it is
unreasonable and without cause based upon the administrative
record before the agency.
``(4) The Attorney General shall prescribe procedures to
implement this subsection.''.
SEC. 1131. 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. 1133. 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. 1134. 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 not apply with
respect to cases commenced under title 11 of the United States
Code before such date.
SEC. 1135. 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) Amendments to the Truth in Lending Act.--
(1) Enhanced disclosure of repayment terms.--
(A) In general.--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 a clear and conspicuous manner,
repayment information that would apply to the
outstanding balance of the consumer under the credit
plan, including--
``(i) the required minimum monthly payment on
that balance, represented as both a dollar
figure and a percentage of that balance;
``(ii) the number of months (rounded to the
nearest month) that it would take to pay the
entire amount of that current balance if the
consumer pays only the required minimum monthly
payments and if no further advances are made;
``(iii) the total cost to the consumer,
including interest and principal payments, of
paying that balance in full if the consumer
pays only the required minimum monthly payments
and if no further advances are made; and
``(iv) the following statement: `If your
current rate is a temporary introductory rate,
your total costs may be higher.'.
``(B) In making the disclosures under subparagraph
(A) the creditor shall apply the annual interest rate
that applies to that balance with respect to the
current billing cycle for that consumer in effect on
the date on which the disclosure is made.''.
(B) Publication of model forms.--Not later
than 180 days after the date of enactment of
this Act, the Board of Governors of the Federal
Reserve System shall publish model disclosure
forms in accordance with section 195 of the
Truth in Lending Act for the purpose of
compliance with section 127(b)(11) of the Truth
in Lending Act, as added by this paragraph.
(C) Civil liability.--Section 130(a) of the
Truth in Lending Act (15 U.S.C. 1640(a)) is
amended, in the undesignated paragraph
following paragraph (4), by striking the second
sentence and inserting the following: ``In
connection with the disclosures referred to in
subsections (a) and (b) of section 1637 of this
title, a creditor shall have a liability
determined under paragraph (2) only for failing
to comply with the requirements of section
1635, 1637(a), or of paragraph (4), (5), (6),
(7), (8), (9), (10), or (11) of section 1637(b)
or for failing to comply with disclosure
requirements under State law for any term or
item that the Board has determined to be
substantially the same in meaning under section
1610(a)(2) as any of the terms or items
referred to in section 1637(a), paragraph (4),
(5), (6), (7), (8), (9), (10), or (11) of
section 1637(b) of this title.''.
(2) Disclosures in connection with solicitations.--
(A) In general.--Section 127(c)(1)(B) of the
Truth in Lending Act (15 U.S.C. 1637(c)(1)(B))
is amended by adding the following:
``(iv) Credit worksheet.--An easily
understandable credit worksheet
designed to aid consumers in
determining their ability to assume
more debt, including consideration of
the personal expenses of the consumer
and a simple formula for the consumer
to determine whether the assumption of
additional debt is advisable.
``(v) Basis of preapproval.--In any
case in which the application or
solicitation states that the consumer
has been preapproved for an account
under an open end consumer credit plan,
the following statement must appear in
a clear and conspicuous manner: `Your
preapproval for this credit card does
not mean that we have reviewed your
individual financial circumstances. You
should review your own budget before
accepting this offer of credit.'.
``(vi) Availability of credit
report.--That the consumer is entitled
to a copy of his or her credit report
in accordance with the Fair Credit
Reporting Act.''.
(B) Publication of model forms.--Not later
than 180 days after the date of enactment of
this Act, the Board of Governors of the Federal
Reserve System shall publish model disclosure
forms in accordance with section 195 of the
Truth in Lending Act for the purpose of
compliance with section 127(c)(1)(B) of the
Truth in Lending Act, as amended by this
paragraph.
(b) Effective Date.--The provisions of this section 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. 1302. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A
DWELLING.
(a) Open End Credit Extensions.--
(1) Credit applications.--Section 127A(a)(13) of the
Truth in Lending Act (15 U.S.C. 1637a(a)(13)) is
amended--
(A) by striking ``consultation of tax
adviser.--A statement that the'' and inserting
the following: ``tax deductibility.--A
statement that--
``(A) the''; and
(B) by striking the period at the end and
inserting the following: ``; and
``(B) in any case in which the extension of
credit exceeds the fair market value (as
defined under the Internal Revenue Code of
1986) of the dwelling, the interest on the
portion of the credit extension that is greater
than the fair market value of the dwelling is
not tax deductible for Federal income tax
purposes.''.
(2) Credit advertisements.--Section 147(b) of the
Truth in Lending Act (15 U.S.C. 1665b(b)) is amended--
(A) by striking ``If any'' and inserting the
following:
``(1) In general.--If any''; and
(B) by adding at the end the following:
``(2) Credit in excess of fair market value.--Each
advertisement described in subsection (a) that relates
to an extension of credit that may exceed the fair
market value of the dwelling, and which advertisement
is disseminated in paper form to the public or through
the Internet, as opposed to by radio or television,
shall include a clear and conspicuous statement that--
``(A) the interest on the portion of the
credit extension that is greater than the fair
market value of the dwelling is not tax
deductible for Federal income tax purposes; and
``(B) the consumer should consult a tax
adviser for further information regarding the
deductibility of interest and charges.''.
(b) Non-Open End Credit Extensions.--
(1) Credit applications.--Section 128 of the Truth in
Lending Act (15 U.S.C. 1638) is amended--
(A) in subsection (a), by adding at the end
the following:
``(15) In the case of a consumer credit transaction
that is secured by the principal dwelling of the
consumer, in which the extension of credit may exceed
the fair market value of the dwelling, a clear and
conspicuous statement that--
``(A) the interest on the portion of the
credit extension that is greater than the fair
market value of the dwelling is not tax
deductible for Federal income tax purposes; and
``(B) the consumer should consult a tax
adviser for further information regarding the
deductibility of interest and charges.''; and
(B) in subsection (b), by adding at the end
the following:
``(3) In the case of a credit transaction described in
paragraph (15) of subsection (a), disclosures required by that
paragraph shall be made to the consumer at the time of
application for such extension of credit.''.
(2) Credit advertisements.--Section 144 of the Truth
in Lending Act (15 U.S.C. 1664) is amended by adding at
the end the following:
``(e) Each advertisement to which this section applies that
relates to a consumer credit transaction that is secured by the
principal dwelling of a consumer in which the extension of
credit may exceed the fair market value of the dwelling, and
which advertisement is disseminated in paper form to the public
or through the Internet, as opposed to by radio or television,
shall clearly and conspicuously state that--
``(1) the interest on the portion of the credit
extension that is greater than the fair market value of
the dwelling is not tax deductible for Federal income
tax purposes; and
``(2) the consumer should consult a tax adviser for
further information regarding the deductibility of
interest and charges.''.
(c) Regulatory Implementation.--
(1) In general.--The Board shall promulgate
regulations implementing the amendments made by this
section.
(2) Effective date.--Regulations issued under
paragraph (1) shall not take effect until the later
of--
(A) 12 months after the date of enactment of
this Act; or
(B) 12 months after the date of publication
of such final regulations by the Board.
SEC. 1303. DISCLOSURES RELATED TO ``INTRODUCTORY RATES''.
(a) Introductory Rate Disclosures.--Section 127(c) of the
Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding
at the end the following:
``(6) Additional notice concerning `introductory
rates'.--
``(A) In general.--Except as provided in
subparagraph (B), an application or
solicitation to open a credit card account and
all promotional materials accompanying such
application or solicitation for which a
disclosure is required under paragraph (1), and
that offers a temporary annual percentage rate
of interest, shall--
``(i) use the term `introductory' in
immediate proximity to each listing of
the temporary annual percentage rate
applicable to such account, which term
shall appear clearly and conspicuously;
``(ii) if the annual percentage rate
of interest that will apply after the
end of the temporary rate period will
be a fixed rate, state in a clear and
conspicuous manner in a prominent
location closely proximate to the first
listing of the temporary annual
percentage rate (other than a listing
of the temporary annual percentage rate
in the tabular format described in
section 122(c)), the time period in
which the introductory period will end
and the annual percentage rate that
will apply after the end of the
introductory period; and
``(iii) if the annual percentage rate
that will apply after the end of the
temporary rate period will vary in
accordance with an index, state in a
clear and conspicuous manner in a
prominent location closely proximate to
the first listing of the temporary
annual percentage rate (other than a
listing in the tabular format
prescribed by section 122(c)), the time
period in which the introductory period
will end and the rate that will apply
after that, based on an annual
percentage rate that was in effect
within 60 days before the date of
mailing the application or
solicitation.
``(B) Exception.--Clauses (ii) and (iii) of
subparagraph (A) do not apply with respect to
any listing of a temporary annual percentage
rate on an envelope or other enclosure in which
an application or solicitation to open a credit
card account is mailed.
``(C) Conditions for introductory rates.--An
application or solicitation to open a credit
card account for which a disclosure is required
under paragraph (1), and that offers a
temporary annual percentage rate of interest
shall, if that rate of interest is revocable
under any circumstance or upon any event,
clearly and conspicuously disclose, in a
prominent manner on or with such application or
solicitation--
``(i) a general description of the
circumstances that may result in the
revocation of the temporary annual
percentage rate; and
``(ii) if the annual percentage rate
that will apply upon the revocation of
the temporary annual percentage rate--
``(I) will be a fixed rate,
the annual percentage rate that
will apply upon the revocation
of the temporary annual
percentage rate; or
``(II) will vary in
accordance with an index, the
rate that will apply after the
temporary rate, based on an
annual percentage rate that was
in effect within 60 days before
the date of mailing the
application or solicitation.
``(D) Definitions.--In this paragraph--
``(i) the terms `temporary annual
percentage rate of interest' and
`temporary annual percentage rate' mean
any rate of interest applicable to a
credit card account for an introductory
period of less than 1 year, if that
rate is less than an annual percentage
rate that was in effect within 60 days
before the date of mailing the
application or solicitation; and
``(ii) the term `introductory period'
means the maximum time period for which
the temporary annual percentage rate
may be applicable.
``(E) Relation to other disclosure
requirements.--Nothing in this paragraph may be
construed to supersede subsection (a) of
section 122, or any disclosure required by
paragraph (1) or any other provision of this
subsection.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate
regulations implementing the requirements of section
127(c)(6) of the Truth in Lending Act, as added by this
section.
(2) Effective date.--Section 127(c)(6) of the Truth
in Lending Act, as added by this section, and
regulations issued under paragraph (1) of this
subsection shall not take effect until the later of--
(A) 12 months after the date of enactment of
this Act; or
(B) 12 months after the date of publication
of such final regulations by the Board.
SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.
(a) Internet-Based Solicitations.--Section 127(c) of the
Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding
at the end the following:
``(7) Internet-based solicitations.--
``(A) In general.--In any solicitation to
open a credit card account for any person under
an open end consumer credit plan using the
Internet or other interactive computer service,
the person making the solicitation shall
clearly and conspicuously disclose--
``(i) the information described in
subparagraphs (A) and (B) of paragraph
(1); and
``(ii) the information described in
paragraph (6).
``(B) Form of disclosure.--The disclosures
required by subparagraph (A) shall be--
``(i) readily accessible to consumers
in close proximity to the solicitation
to open a credit card account; and
``(ii) updated regularly to reflect
the current policies, terms, and fee
amounts applicable to the credit card
account.
``(C) Definitions.--For purposes of this
paragraph--
``(i) the term `Internet' means the
international computer network of both
Federal and non-Federal interoperable
packet switched data networks; and
``(ii) the term `interactive computer
service' means any information service,
system, or access software provider
that provides or enables computer
access by multiple users to a computer
server, including specifically a
service or system that provides access
to the Internet and such systems
operated or services offered by
libraries or educational
institutions.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate
regulations implementing the requirements of section
127(c)(7) of the Truth in Lending Act, as added by this
section.
(2) Effective date.--The amendment made by subsection
(a) and the regulations issued under paragraph (1) of
this subsection shall not take effect until the later
of--
(A) 12 months after the date of enactment of
this Act; or
(B) 12 months after the date of publication
of such final regulations by the Board.
SEC. 1305. DISCLOSURES RELATED TO LATE PAYMENT DEADLINES AND PENALTIES.
(a) Disclosures Related to Late Payment Deadlines and
Penalties.--Section 127(b) of the Truth in Lending Act (15
U.S.C. 1637(b)) is amended by adding at the end the following:
``(12) If a late payment fee is to be imposed due to
the failure of the obligor to make payment on or before
a required payment due date, the following shall be
stated clearly and conspicuously on the billing
statement:
``(A) The date on which that payment is due
or, if different, the earliest date on which a
late payment fee may be charged.
``(B) The amount of the late payment fee to
be imposed if payment is made after such
date.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate
regulations implementing the requirements of section
127(b)(12) of the Truth in Lending Act, as added by
this section.
(2) Effective date.--The amendment made by subsection
(a) and regulations issued under paragraph (1) of this
subsection shall not take effect until the later of--
(A) 12 months after the date of enactment of
this Act; or
(B) 12 months after the date of publication
of such final regulations by the Board.
SEC. 1306. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE
CHARGES.
(a) Prohibition on Certain Actions for Failure To Incur
Finance Charges.--Section 127 of the Truth in Lending Act (15
U.S.C. 1637) is amended by adding at the end the following:
``(h) Prohibition on Certain Actions for Failure To Incur
Finance Charges.--A creditor of an account under an open end
consumer credit plan may not terminate an account prior to its
expiration date solely because the consumer has not incurred
finance charges on the account. Nothing in this subsection
shall prohibit a creditor from terminating an account for
inactivity in 3 or more consecutive months.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate
regulations implementing the requirements of section
127(h) of the Truth in Lending Act, as added by this
section.
(2) Effective date.--The amendment made by subsection
(a) and regulations issued under paragraph (1) of this
subsection shall not take effect until the later of--
(A) 12 months after the date of enactment of
this Act; or
(B) 12 months after the date of publication
of such final regulations by the Board.
SEC. 1307. DUAL USE DEBIT CARD.
(a) Report.--The Board may conduct a study of, and present to
Congress a report containing its analysis of, consumer
protections under existing law to limit the liability of
consumers for unauthorized use of a debit card or similar
access device. Such report, if submitted, shall include
recommendations for legislative initiatives, if any, of the
Board, based on its findings.
(b) Considerations.--In preparing a report under subsection
(a), the Board may include--
(1) the extent to which section 909 of the Electronic
Fund Transfer Act (15 U.S.C. 1693g), as in effect at
the time of the report, and the implementing
regulations promulgated by the Board to carry out that
section provide adequate unauthorized use liability
protection for consumers;
(2) the extent to which any voluntary industry rules
have enhanced or may enhance the level of protection
afforded consumers in connection with such unauthorized
use liability; and
(3) whether amendments to the Electronic Fund
Transfer Act (15 U.S.C. 1693 et seq.), or revisions to
regulations promulgated by the Board to carry out that
Act, are necessary to further address adequate
protection for consumers concerning unauthorized use
liability.
SEC. 1308. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO DEPENDENT
STUDENTS.
(a) Study.--
(1) In general.--The Board shall conduct a study
regarding the impact that the extension of credit
described in paragraph (2) has on the rate of cases
filed under title 11 of the United States Code.
(2) Extension of credit.--The extension of credit
described in this paragraph is the extension of credit
to individuals who are--
(A) claimed as dependents for purposes of the
Internal Revenue Code of 1986; and
(B) enrolled within 1 year of successfully
completing all required secondary education
requirements and on a full-time basis, in
postsecondary educational institutions.
(b) Report.--Not later than 1 year after the date of
enactment of this Act, the Board shall submit to the Senate and
the House of Representatives a report summarizing the results
of the study conducted under subsection (a).
SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS.
(a) Regulations.--Not later than 6 months after the date of
enactment of this Act, the Board, in consultation with the
other Federal banking agencies (as defined in section 3 of the
Federal Deposit Insurance Act), the National Credit Union
Administration Board, and the Federal Trade Commission, shall
promulgate regulations to provide guidance regarding the
meaning of the term ``clear and conspicuous'', as used in
subparagraphs (A), (B), and (C) of section 127(b)(11) and
clauses (ii) and (iii) of section 127(c)(6)(A) of the Truth in
Lending Act.
(b) Examples.--Regulations promulgated under subsection (a)
shall include examples of clear and conspicuous model
disclosures for the purposes of disclosures required by the
provisions of the Truth in Lending Act referred to in
subsection (a).
(c) Standards.--In promulgating regulations under this
section, the Board shall ensure that the clear and conspicuous
standard required for disclosures made under the provisions of
the Truth in Lending Act referred to in subsection (a) can be
implemented in a manner which results in disclosures which are
reasonably understandable and designed to call attention to the
nature and significance of the information in the notice.
SEC. 1310. ISSUANCE OF CREDIT CARDS TO UNDERAGE CONSUMERS.
Section 127(c) of the Truth in Lending Act (15 U.S.C.
1637(c)) is amended by inserting after paragraph (6) (as added
by section 1303 of this title) the following new paragraph:
``(7) Applications from underage consumers.--
``(A) Prohibition on issuance.--No credit
card may be issued to, or open end credit plan
established on behalf of, any consumer who has
not attained the age of 21, except in response
to a written request or application to the card
issuer that meets the requirements of
subparagraph (B).
``(B) Application requirements.--An
application to open a credit card account by a
consumer who has not reached the age of 21 as
of the date of submission of the application
shall require--
``(i) the signature of the parent or
guardian of the consumer indicating
joint liability for debts incurred by
the consumer in connection with the
account before the consumer has reached
the age of 21; or
``(ii) submission by the consumer of
financial information indicating an
independent means of repaying any
obligation arising from the proposed
extension of credit in connection with
the account.''.
TITLE XIV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 1401. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as otherwise provided in this
Act, this Act and the amendments made by this Act shall take
effect 180 days after the date of enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as otherwise provided in this
Act and paragraph (2), the amendments made by this Act
shall not apply with respect to cases commenced under
title 11, United States Code, before the effective date
of this Act.
(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.